URS Corporation Ltd v BDW Trading Ltd – how construction professionals can mitigate risk

The Supreme Court’s decision in URS Corporation Ltd v BDW Trading Ltd is the latest in a series of judgments that underscores the increasing difficulty of defending building safety claims.

Increasingly, the courts are placing more emphasis on public interest and the moral imperative of addressing dangerous building defects. This is evident in how post-Grenfell legislation – notably the Building Safety Act 2022 – is being interpreted, signalling that parties involved in unsafe developments now face significantly greater legal exposure. Crucially, liability may even extend to those not directly involved in the original project, simply through corporate association.

The message is clear – these claims are not going away. The question is, how can parties best protect their position? We set out our recommendations for defendants, insurers and claimants below.

Defendants: take proactive steps

• Engage early and constructively
  Begin discussions with claimants at the earliest opportunity, particularly regarding proposed remedial works. If the claimant’s proposals seem excessive, raise this promptly. Proactively bring other potentially responsible parties to the table – whether or not they have been named in the claim – via contribution claims. Do not assume that claimants will bring in all responsible parties. Notably, the URS Corporation Ltd v BDW Trading Ltd judgment may widen the scope for seeking such contributions. Where logical, consider the benefits of co-defendant collaboration, rather than siloed defence strategies.
• Don’t delay
  Waiting for claimants to drive the process invites delays and escalating legal costs. Instead, consider initiating early without prejudice discussions and making Part 36 offers to safeguard your cost position.
• Prioritise cost-efficient resolution
  Focus on the potential for liability and be realistic about outcomes. Avoid assuming that another party will ultimately bear responsibility. Consider allocating resources toward achieving early settlements.
• Explore public funding options
  Check whether claimants have applied for funding through the Building Safety Fund or Cladding Safety Scheme. If not, they may need encouragement to do so, potentially easing the financial pressure on all parties.

Insurers: align early and set realistic reserves

Insurers ought to reflect on the legal trajectory and align their strategy with the insured and legal team accordingly. Consider the cumulative effect of related claims. Note the prospects of contribution claims and Building Liability Orders becoming more common and viable. In response, establish appropriate, conservative cost and claim reserves early on.

Claimants: build a strong, credible case

• Engage experts and cost your scheme
  Obtain expert input early to develop a robust and reasonably costed remedial scheme. Tender the work and demonstrate that you have sought competitive pricing.
• Engage defendants promptly
  Early engagement benefits all parties. Moving quickly helps contain costs and may encourage early settlements. Consider targeting multiple defendants to distribute liability more broadly and making early Part 36 offers to incentivise resolution.

Concluding remarks

The Supreme Court’s ruling closely aligns with the earlier Court of Appeal judgment but reinforces the courts’ firm stance: post-Grenfell legislation will be interpreted with its protective purpose in mind. Those involved in the construction of defective buildings – directly or by association – must reassess their litigation strategy with care and urgency. If you’d like to discuss how this ruling could affect your projects or need support mitigating related risks, please get in touch with the authors.