The recent Court of Appeal judgment in the case of URS Corporation Ltd v BDW Trading Ltd [2023] EWCA Civ 772 covers a number of points which will be of interest to those dealing with claims between developers and their professional advisers regarding defective buildings, in particular the retrospective effect of the extended limitation period for claims under the Defective Premises Act.

Background

The case relates to two separate sites which were previously owned and developed by the developer, BDW Trading Limited.

Following the Grenfell Tower disaster in June 2017, BDW undertook investigations into the structure of a number of its developments. These investigations covered the two sites in question, even though BDW no longer owned either site at that point in time. BDW alleges that the review showed that, although the buildings had not suffered any physical damage, the structural design had been negligently performed and that the structures were dangerous. As a result of their findings, BDW incurred significant costs carrying out investigations and remedial works.

BDW commenced proceedings against URS, which it considers responsible for the structural design advice. The proceedings were issued in 2020, at which point they were limited to claims in negligence. The Court of Appeal presumed that this was because the parties accepted, at that point in time, that any claims in contract were statue-barred.

Decision

The recent judgment deals with a number of linked appeals, relating to a previous decision regarding preliminary issues and a decision to allow amendments to BDW’s case. It provides some helpful clarification on a number of issues which will be of widespread relevance. It is important to note that the proceedings remain ongoing, and the trial of the substantive issues has not yet taken place.

In summary of the main points of interest:

• The Court of Appeal held that the risk of harm which URS was obliged to guard against was not limited to harm caused to BDW’s proprietary interest. Instead, URS owed BDW a duty to protect it against the risk that the design of the building would contain structural defect which would have to be subsequently remedied.
• Assuming that the structural design was defective, and given that there was no physical damage to the buildings, BDW’s cause of action against URS (in the tort of negligence) arose, at the latest, when the individual buildings respectively were practically completed. The date on which BDW became aware of the alleged defects was not relevant to the calculation of the accrual date.
• Section 135 of the Building Safety Act 2022 (“BSA”) extends the limitation period for claims under the Defective Premises Act 1972 (“DPA”) and is retrospective in effect. As a result, The Court of Appeal permitted BDW to amend its proceedings to include a claim against URS pursuant to section 1(1) of the DPA. This was allowed even though the claim had been issued before the BSA came into force. It was noted that although s.135 BSA will not resurrect claims which had been settled or determined before the BSA came into force, there was no such carve out for claims which were the subject of ongoing litigation.
• Section 1(1)(a) of the DPA states that “a person taking on work for or in connection with the provision of a dwelling” owes a duty “if the dwelling is provided to the order of any person, to that person”. The duty is “to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed”. As an engineer, URS was a person taking on work for or in connection with the provision of a dwelling. That duty was owed to BDW, since the buildings were being provided “to the order” of BDW. BDW are, therefore, able to claim against URS under s1(1)(a) of the DPA. It has, of course, not yet been established whether that claim is made out on the facts- that will be a matter for trial.
• BDW have a legal right to make a claim against URS under the Civil Liability (Contribution) Act 1978. This was the case even though no third party had made a claim (or intimated a claim) against BDW.

It will now be interesting to see the result of the substantive trial under the DPA, assuming the parties don’t settle which would be a shame for those of us waiting for further judicial guidance on these issues.