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‘Check your PI cover’ warning to architects after Supreme Court ruling
Developers have a ‘clearer path’ to pursue architects who design unsafe buildings following a recent Supreme Court ruling, legal experts have warned
The judgement, which interprets important elements of the Building Safety Act 2022and the Defective Premises Act 1972, heightens the need for practices to hold ‘comprehensive’ professional indemnityinsurance, according to top lawyers.
Earlier this monththe Supreme Court ruled that BDW, the main trading arm of Barratt Developments, was able to pursue damages from structural engineering company URS for alleged negligence in provision of design services for two residential schemes. This was despite BDW undertaking remedial works on the properties voluntarily more than three years ago and no longer owning the buildings.
Judges dismissed the engineering firm’s latest appeal against BDW’s right to claim for compensation on all four grounds.Advertisement
Nick Stockley, partner at law firm Mayo Wynne Baxter, said: ‘This ruling creates an easier route for builders to reclaim losses that they incur for the actions of design contractors.
‘It suggests that the time-out defence is no longer a fail-safe if the genuine blame rests with a design contractor. The ruling also takes away any voluntary-decision defence that either a design contractor or architect may try to raise.
‘It means that any design contractor needs to maintain insurance that extends to their work, irrespective of when the work was carried out.
‘An architect’s work should always be covered by professional indemnity insurance but that cover will need to be more extensive. An architect should review any existing insurance policy cover in order to check that that policy extends to all work carried out by the architect.’
The two projects at the centre of the BDW claim are Capital East in London and Freemens Meadow in Leicester. Advertisement
The housebuilder carried out voluntary remedial works at these properties in 2020 and 2021, despite no longer owning them, after defects were discovered that created a danger to occupants.
It claimed damages from URS but the engineering firm appealed, initially to the Court of Appeal then to the Supreme Court, arguing that a voluntary act could not lead to recoverable losses, and only claims brought by a property owner under the DPA were subject to an extended 30-year limitation period.
URS claimed that a third party could not be owed a duty under the DPA and added that a contribution for liability could only be made once a settlement was finalised.
However, the Supreme Court found in BDW’s favour, saying that URS’s interpretation of the law ‘would penalise responsible developers, such as such as BDW, who had been pro-active in investigating, identifying and remedying building safety defects’.
It said DPA would ‘better serve the policy of ensuring the safety of dwellings’ if it had a wider application, ruling that ‘BDW itself has rights under the DPA against a party primarily liable for the defects’.
It added that BDW had ‘acted responsibly’ and ‘in accordance with the government’s strong encouragement’ in carrying out remediation work at Capital East and Freemens Meadow, concluding: ‘Penalisation ofdevelopers would be contrary to the purpose of the legislation’.
Rob Horne, head of construction disputes for Osbourne Clarke, which represented BDW, said: ‘For residential developers there is now significantly more clarity over the full effect of the retrospective limitation period introduced by the BSA.
‘Ultimately, the aim of the BSA was to ensure that safety failures are properly addressed and that those responsible bear the costs. This case furthers that aim by ensuring that developers have a clearer path to recover funds from designers and constructors who designed and built unsafe buildings.’
Horne added: ‘The Supreme Court has commented that proactive developers who, in effect, do the right thing in effecting necessary safety works, should not be penalised by having rights of recovery barred.
‘Such developers are able to recover the remedial costs from those most responsible for the safety defects in question.’
‘This reading gives the Defective Premises Act far more teeth’
Julia Tobbell, partner at law firm Forsters, said the decision will be ‘a relief to proactive developers’ as, ‘although their decision to voluntarily take on repairs may be a factor in assessing reasonableness of mitigation, it does not bar them in principle from being able to recover from negligent contractors’.
She added: ‘The court also found that the duty to build homes properly under Section 1 of the PDA is not just for the benefit of the homeowner, but also the developer who procures the contractor to carry out the works.
‘The developer can both owe a dutyand be owed a duty; this reading gives the DPA far more teeth.’
2025-05-30
Will Ing
comment and share
#check #your #cover #warning #architects
‘Check your PI cover’ warning to architects after Supreme Court ruling
Developers have a ‘clearer path’ to pursue architects who design unsafe buildings following a recent Supreme Court ruling, legal experts have warned
The judgement, which interprets important elements of the Building Safety Act 2022and the Defective Premises Act 1972, heightens the need for practices to hold ‘comprehensive’ professional indemnityinsurance, according to top lawyers.
Earlier this monththe Supreme Court ruled that BDW, the main trading arm of Barratt Developments, was able to pursue damages from structural engineering company URS for alleged negligence in provision of design services for two residential schemes. This was despite BDW undertaking remedial works on the properties voluntarily more than three years ago and no longer owning the buildings.
Judges dismissed the engineering firm’s latest appeal against BDW’s right to claim for compensation on all four grounds.Advertisement
Nick Stockley, partner at law firm Mayo Wynne Baxter, said: ‘This ruling creates an easier route for builders to reclaim losses that they incur for the actions of design contractors.
‘It suggests that the time-out defence is no longer a fail-safe if the genuine blame rests with a design contractor. The ruling also takes away any voluntary-decision defence that either a design contractor or architect may try to raise.
‘It means that any design contractor needs to maintain insurance that extends to their work, irrespective of when the work was carried out.
‘An architect’s work should always be covered by professional indemnity insurance but that cover will need to be more extensive. An architect should review any existing insurance policy cover in order to check that that policy extends to all work carried out by the architect.’
The two projects at the centre of the BDW claim are Capital East in London and Freemens Meadow in Leicester. Advertisement
The housebuilder carried out voluntary remedial works at these properties in 2020 and 2021, despite no longer owning them, after defects were discovered that created a danger to occupants.
It claimed damages from URS but the engineering firm appealed, initially to the Court of Appeal then to the Supreme Court, arguing that a voluntary act could not lead to recoverable losses, and only claims brought by a property owner under the DPA were subject to an extended 30-year limitation period.
URS claimed that a third party could not be owed a duty under the DPA and added that a contribution for liability could only be made once a settlement was finalised.
However, the Supreme Court found in BDW’s favour, saying that URS’s interpretation of the law ‘would penalise responsible developers, such as such as BDW, who had been pro-active in investigating, identifying and remedying building safety defects’.
It said DPA would ‘better serve the policy of ensuring the safety of dwellings’ if it had a wider application, ruling that ‘BDW itself has rights under the DPA against a party primarily liable for the defects’.
It added that BDW had ‘acted responsibly’ and ‘in accordance with the government’s strong encouragement’ in carrying out remediation work at Capital East and Freemens Meadow, concluding: ‘Penalisation ofdevelopers would be contrary to the purpose of the legislation’.
Rob Horne, head of construction disputes for Osbourne Clarke, which represented BDW, said: ‘For residential developers there is now significantly more clarity over the full effect of the retrospective limitation period introduced by the BSA.
‘Ultimately, the aim of the BSA was to ensure that safety failures are properly addressed and that those responsible bear the costs. This case furthers that aim by ensuring that developers have a clearer path to recover funds from designers and constructors who designed and built unsafe buildings.’
Horne added: ‘The Supreme Court has commented that proactive developers who, in effect, do the right thing in effecting necessary safety works, should not be penalised by having rights of recovery barred.
‘Such developers are able to recover the remedial costs from those most responsible for the safety defects in question.’
‘This reading gives the Defective Premises Act far more teeth’
Julia Tobbell, partner at law firm Forsters, said the decision will be ‘a relief to proactive developers’ as, ‘although their decision to voluntarily take on repairs may be a factor in assessing reasonableness of mitigation, it does not bar them in principle from being able to recover from negligent contractors’.
She added: ‘The court also found that the duty to build homes properly under Section 1 of the PDA is not just for the benefit of the homeowner, but also the developer who procures the contractor to carry out the works.
‘The developer can both owe a dutyand be owed a duty; this reading gives the DPA far more teeth.’
2025-05-30
Will Ing
comment and share
#check #your #cover #warning #architects
