URS Corporation LTD v BDW Trading Limited ' The Court Of Appeal Provides Clarity On Duties Under The Defective Premises Act 1972

• Published date: 02 August 2023
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Professional Negligence
• Law Firm: IBB Law
• Author: Ms Scarlett Doyle

There has been much uncertainty surrounding whether developers are owed duties under the Defective Premises Act 1972. A recent decision handed down by the Court of Appeal has provided some much-needed clarity.

Background

BDW Trading Limited, a developer, appointed URS Corporation Limited who are an engineering firm. URS were appointed to provide structural design services in respect of two residential developments. Practical completion occurred between early 2007 - 2008. Afterwards, BDW sold on the individual apartments.

It wasn't until 11 years later in 2019 that BDW discovered structural defects in the residential developments. BDW incurred costs in investigating the structural defects and then carrying out remedial works, on the understanding that they were liable to the occupiers for the defects under the Defective Premises Act.

In 2020, BDW commenced proceedings against URS for the alleged negligent structural design and sough to recover their losses for the remedial work and investigations BDW had undertaken in the year prior. URS argued that BDW should have raised a limitation defence or argued that the losses were too remote because BDW no longer owned the Developments at the time the defects were identified.

The claim against URS ultimately gave rise to several issues, which were first considered by the High Court and then the Court of Appeal.

High Court Determination

The High Court determined at a preliminary hearing that, save for some allowances, the duty of care owed by URS extended to the losses suffered by BDW and that in principle, BDWs losses were recoverable.

The High Court also did not consider that BDWs claim against URS was time barred and determined that BDWs cause of action accrued no later than the date of practical completion.

Permission to appeal

URS was granted permission to appeal on three grounds:

1. The losses claimed by BDW (i.e. costs of repair) were not within the scope of URS' duty of care. URS argued its duty of care protected BDW against a risk of harm to its proprietary interests, and the risk of loss incurred to third parties. URS' position was that BDW did not have a proprietary interest in the Developments at the time the defects were discovered and claims by third parties would have been statute-barred.
2. The damages claimed by BDW were not recoverable. Again URS argued that, at the time of discovery, BDW had no proprietary interests in the Developments and claims by third parties would have been statute-barred. In...