The Time (limits) They Are A-Changin'

Of course, Bob Dylan wasn’t referring to limitation periods in his 1964 hit, but the title of the song very much reflects the position in the construction industry following on from the Building Safety Act ("BSA") and the changes made to the Defective Premises Act 1972 (the "DPA").

The Court of Appeal has now issued its first judgment considering s135 of the BSA which significantly extends the periods within which a claim can be made under the DPA, meaning that claims arising prior to 28 June 2022 can be brought within 30 years from the point at which the right of action accrued. The case also addressed when a contribution can be found due under the Civil Liability (Contribution) Act 1978 (the "CLCA").

In URS Corporation Ltd v BDW Trading Ltd 2023] EWCA Civ 772, the Court considered a number of issues arising out of defects in two developments, each consisting of a number of tower blocks, completed between 2007 and 2012. On these projects, BDW were the developer and URS provided consulting engineering services.

Duties under the DPA – who owes a duty to who?

Under s1(1) of the DPA, a "person taking on work for or in connection with the provision of a dwelling" owes a duty to ensure that "the work which he takes on is done in a workmanlike or, as the case may be, professional manner… [so that]… the dwelling will be fit for habitation when completed". Under s1(1)(a) that duty is owed to a person who instructs the creation of a dwelling. BDW therefore argued that it was owed duties under the DPA by URS.

URS argued that this was not the case as, under s1(4), BDW, as a party instructing these works in the course of business, owed duties under the DPA and could not therefore be a party to whom a duty was also owed. They also argued that the purpose of the DPA was to provide protection to individuals and not to protect corporate commercial developers.

The Court agreed with BDW. They confirmed that the wording of s1(1)(a) was clear and meant that duties were owed to BDW. There was nothing in the terms of the DPA which suggested that one party could not simultaneously owe and be owed duties. There was also nothing in the DPA which suggested that its protections should be limited to individuals.

How do rights under the DPA apply?

The thirty year time limit mentioned above was a significant issue in the current case, as BDW had brought their action before the changes made by the DPA came into effect. They were now seeking to amend their case to introduce arguments under the new legislation.

URS argued that BDW should not be able rely on the new provision to update their case. BDW obviously disagreed. The Court sided with BDW finding that, as the changes were intended to have a retrospective effect, the longer limitation periods were to be treated as always having been in effect. There were also no express words in the DPA which carved out on-going litigation from the effect of these provisions. This was in direct contrast to the situation where a case had been "finally determined" before the changes came into effect.

When can a claim be made under the CLCA?

The CLCA was designed to allow a party to recover sums from others who are liable for the same damage that the original party was liable for. In the present case, before any claims had been made against it, BDW took the decision to undertake the required remedial works. It then sought a contribution from URS, arguing that URS was also liable for these works. These works were carried out at a time when (i) BDW had no interest in the properties (having sold its freehold interest) and (ii) where it could have properly raised a limitation defence as the changes to the DPA had not yet come into effect.

URS made a number of arguments against the claim under the CLCA – chief amongst these being that before a claim under the CLCA could be made, a claim against BDW would need to have been made or, at least, intimated.

The Court disagreed. Their view was that the only requirement was that the two parties (BDW and URS) were liable in the same damage. There was nothing within the terms of the CLCA which set the restraints that URS were arguing for.

Conclusions

The outcome of this case will be a welcome one for commercial developers as it provides clear guidance from the Courts that they will be broadly supportive of claims against contractors, sub-contractors, designers, and others involved in the original construction of a defective project.

Will this decision lead to a flurry of further claims from commercial developers? The answer, my friend, is blowin' in the wind…

For further information on matters relating to the Building Safety Act please see our Building & Fire Safety Hub.