URS Corporation Limited v BDW Trading Limited is the first Court of Appeal decision relating to claims under the Defective Premises Act 1972 (“DPA”) since the Building Safety 2022 (“BSA”) was enacted. It confirmed that, amongst other issues, building designers do owe a duty of care to the developers they work with, as the developers themselves owe a duty to subsequent purchasers.
According to B P Collins’ property disputes team, this has particular importance following the implementation of the BSA, as the limitation period for claims under the DPA (the time limit within which any potential claimant has to bring a claim) has been extended from six to 30 years. The Court of Appeal’s decision confirmed that Section 135 of the BSA, which includes this extension, has a retrospective effect and so “… is to be treated as always having been in force”. This means that many more building projects are caught by the DPA and all parties involved in construction should be conscious of the projects they have worked on, going back 30 years.
Developers should carry out their own investigations
This case serves as a reminder that developers should carry out investigations, as the claimants in this case did, into their historic developments. It has been confirmed that, in the event that defective designs are discovered, developers will have a strong claim in the tort of professional negligence against the designers.
It was inconsequential that, by the time the defects were discovered, the developer no longer had any proprietary interest in the properties in question. The Court of Appeal held that the designer’s breach of their professional duty under the DPA came about because “the design of the buildings would contain structural defects which would have to be subsequently remedied”. The design in question was dangerous, requiring the apartment block to be evacuated, and required rectification works that cost millions. The Court found that as a result of that, “it was impossible to conclude that the losses were… outside the scope of URS’ [the designer] duty.”
The Court also made a ruling on the date on which the limitation period would start to run. It held that the cause of action arose, and thus the limitation period would begin, at latest on the date of practical completion of the buildings. Alternatively, the Court held that where there was no immediate damage, but rather a dangerous defect in the design, the cause of action would be complete when the “defective and dangerous structural design had been irrevocably incorporated into the buildings as built”. The date that the claimant becomes aware of the defect is irrelevant.
Designers have a duty to developers
As mentioned above, the Court also ruled on the application of section 1 of the DPA, which imposes a duty on those “taking on work for or in connection with the provision of a dwelling” that their work must be done in a “workmanlike or … professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed.” The Court held that this provision clearly applies to designers and that the duty is owed to developers, under the DPA, because the dwelling referred to above is “being provided to the order of any person, to that person”. The Court also confirmed, contrary to the arguments put forward by the designer in this case, that the duty in the DPA is not limited to being owed to individual purchasers and can be owed to commercial developers.
As can be seen, this case highlights that all parties involved in the provision of dwellings need to be mindful of the duties imposed by the DPA (as amended by the BSA). For developers, some reassurance can be found that they will not be held solely responsible for defective designs commissioned from third parties. For designers, it should act as a reminder that they are subject to the same duties as developers, and so should carry out reviews of their historic work, as many developers have done, to assist them in defending any potential future claims.