The Court of Appeal has delivered a ruling that clarifies if developers are owed duties under the Defective Premises Act 1972 (DPA).
The case URS Corporation Ltd v BDW Trading Ltd focused on the duties owed by professionals but also highlighted the fact that both contractors and sub-contractors also owe a similar duty.
The developer BDW appointed URS to provide structural designs for a residential development that was being developed by BDW. All of the units were sold subject to 200-year leases and BDW retained the freehold until its interest in the head lease was transferred at the end of 2008.
Following the Grenfell Tower disaster in 2017, BDW elected to take steps to ensure the Development was ‘safe’. A number of structural defects were identified which were considered to pose a risk to the residents and, as a result, BDW incurred, or would incur, considerable costs remediating those defects. BDW subsequently sought to recover those costs from URS and issued a claim in negligence in the Technology and Construction Court (the TCC) in 2019.
As a part of its defence, URS claimed that BDW did not have a proprietary interest in the Development and therefore had suffered no loss. The TCC rejected this argument and decided that BDW’s cause of action accrued no later than the date of practical completion (at the latest February 2008) and the losses were recoverable because BDW did hold a proprietary interest at that point in time.
Shortly after permission for URS to appeal was granted, the Building Safety Act 2022 (the BSA) came into force and Section 135 extended the limitation period for claims under the DPA.
The Court of Appeal dismissed URS’s final appeal and could find no fault with the judges’ approach from the first of what became three appeals. The comments in the ruling indicate developers are owed the duty under section 1 of the DPA which is significant.
With a large number of ongoing building safety claims, this decision is expected to be closely scrutinised by construction professionals and lawyers and could potentially initiate new claims or existing claims being amended in relation to the DPA.
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