Under section 1(1) of the DPA, a person taking on work for or in connection with the provision of a dwelling in England or Wales, whether as a new build, conversion or enlargement of a building, has a duty to carry out that work in a workmanlike or professional manner (as applicable), with proper materials, so that the dwelling will be fit for habitation when completed.
The duty is owed by that person to the party who has instructed them to carry out the work and to every person who acquires an interest (whether legal or equitable) in the dwelling.
If the duty is breached, the party to whom it is owed used to have six years from the date a right of action accrued to bring a claim against the party who had breached the duty.
That changed when section 135 of the Building Safety Act 2022 came into force. The party entitled to bring the claim now has 30 years from the date the right of action accrued to do so where the right of action accrued prior to 28 June 2022, and 15 years where the right of action accrued on or after that date. The 30 year limitation also applies where the time for bringing a claim would otherwise have expired during the 12 months from 28 June 2022.
Does the change apply only to new claims or does it include claims that were already under way before the change was made?
That point was argued before the Court of Appeal in URS Corporation Limited v BDW Trading Limited [2023] EWCA Civ 772.
BDW had employed URS as structural designer in connection with two developments of tower blocks containing apartments. Structural defects were found which led to a claim by BDW against URS. BDW commenced proceedings against URS before section 135 took effect and did not initially claim that URS owed a duty of care to it under section 1(1)DPA. BDW requested permission of the court to allow it to amend the proceedings to include such a claim, which would previously have been statute-barred.
Counsel for URS submitted that the retrospectivity of section 135 did not apply to parties already involved in ongoing proceedings and that as a matter of statutory interpretation it would not be correct for those parties to find that “the rules of the game had changed”.
The Court of Appeal disagreed, finding that the effect of the ordinary meaning of the words in section 135 is that “the longer limitation periods are to be treated as always having been in force” and that, accordingly, “there was never a time when those extended periods did not apply”. Further, whilst section 135 specifically excludes claims under section 1 DPA which have been finally determined or settled before that provision came into force, there is no specific exclusion of claims already under way. The Court of Appeal found that “the absence of any such reference, in circumstances where there is an exception for those in a different category, is …fatal to [a submission to the contrary]”. It was open to BDW to pursue a claim under section 1 DPA.
It remains to be seen whether URS’s submission can be resuscitated when this case goes to the Supreme Court in December 2024.
In the first matter to be referred to it relating to the Building Safety Act 2022, the Supreme Court will also be asked to decide on other points on which URS has appealed, briefly:
- Are developers owed a duty under section 1(1) DPA? URS argued that no such duty was owed and that the duties BDW owed to purchasers under section 1(4) DPA precluded BDW from being owed a duty. The Court of Appeal disagreed, holding that duties under the DPA can be owed to developers as well as individuals. Nothing in the DPA restricts a duty being owed to individuals only.
- Whether the costs of repair losses due to defective design are within the scope of URS’s duty of care. The Court of Appeal found they were on the basis that such duty was intended to protect the risk of economic loss that could be caused by a defective structure being built based upon a negligent design which would subsequently require rectification, noting that this is a standard duty imposed on a design consultant, not conflicting with any other contractual requirement or obligation imposed on them.
- How the provisions of the Civil Liability (Contribution) Act 1978 should be interpreted.
Unless the Supreme Court decides otherwise, claims under section 1 DPA that were previously statute-barred may come back to bite!
Client Alert 2024-110
