The preliminary issues
The discovery of the structural defects in the two developments led to BDW commencing proceedings in March 2020 for claims in negligence. It made no claims against URS for breach of contract, presumably because most potential claims would have been statute-barred.
The Technology & Construction Court (TCC) was asked to answer certain preliminary issues on the basis of assumed facts. The Honourable Mr Justice Fraser (Fraser J) gave judgment in October 2021.
By the time the structural defects came to light, BDW no longer owned the buildings in the two developments. BDW’s position was that it had liabilities to the occupants of the buildings, in respect of the defects, including under the contracts pursuant to which it had sold the individual units (as well as under the Defective Premises Act 1972 (DPA)). URS’s position was that, had any claims been made against BDW, BDW would potentially have had the benefit of limitation defences and BDW was not legally obliged to rectify defects in the way it did.
To help understand why BDW proceeded with the course of action it did, Fraser J quoted a passage from BDW’s skeleton argument concerning the preliminary issues:
"Nevertheless, and given the seriousness of the defects, BDW did not as a responsible developer consider that it could simply ignore the problem once it had come to light. Rather, it was compelled to act to ensure that the blocks were made safe. In doing so, it has incurred or will incur expenditure running to many millions of pounds, the recovery of which it now seeks from URS in these proceedings."
URS’ underlying position was that BDW’s losses were not recoverable in tort: any cause of action in tort accrued to BDW in 2019, when it discovered that the design was allegedly defective – and, by that point in time, BDW no longer had a proprietary interest in the buildings, had no obligation to rectify the defects, and had no liability to third parties because of limitation.
The judge decided that, save for some exceptions, the scope of URS’ duty of care extended to the alleged losses and those losses were, in principle, recoverable. He held that BDW’s cause of action accrued not later than the date of practical completion of each of the blocks stating:
"I therefore conclude that the cause of action accrued, with all of its necessary ingredients completed, not later than the date of practical completion of each of the blocks. This conclusion has the following benefits. It is consistent with, and continues, the approach of English law that knowledge is not required to complete a cause of action. It is therefore consistent with orthodoxy. It is also consistent with the other first instance decisions relied upon in argument".
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