- with readers working within the Construction & Engineering industries
In 2025, there were many interesting and relevant court cases in the construction industry. In this article, we highlight some of the key commercial lessons that can be taken from them.
Topics include the interpretation of the Building Safety Act 2022, prescription periods, the incorporation of time-bar defences, and payment. Links to the case judgments are provided in the headlines below should you wish to read the full case details, and we also discuss these cases in more detail in our recent webinar, which you can access here.
URS Corporation v BDW Trading Limited
BDW brought a common law claim of negligence against a structural engineer, URS, in relation to building cladding defects. Prior to the introduction of section 135 of the Building Safety Act ("BSA"), BDW's claim would have been time barred. The BSA retrospectively extended the limitation period for accrued claims under the Defective Premises Act 1972 ("DPA") from 6 to 30 years. The Supreme Court granted permission to appeal but found in favour of BDW. The four key points from the judgement are:
- BDW suffered actionable and recoverable damage, despite the works having been carried out by URS on a voluntary basis, as there is no general legal principle barring recovery for voluntary works.
- The extended limitation period under section 135 of the BSA applies to both claims made under the DPA, and to related negligence and contribution claims.
- URS owed a duty of care to BDW. The court rejected that a developer cannot simultaneously owe and be owed a duty of care under the DPA.
- It was valid for BDW to seek a payment contribution from other parties, a claim to which arises once BDW paid compensation for damage, even without a prior judgment, settlement, or third-party claim.
This case strengthens the rights of developers to recover costs in relation to building defects. The new 30-year limitation period may cause an increase in the number of historic building safety claims.
Triathlon Homes LLP v Stratford Village Development Partnership & Others
Triathlon Homes sought a Remediation Contribution Order ("RCO") under section 124 of the BSA, from the original building developer after an investigation revealed significant fire safety defects in relation to both the design and construction of the external cladding to blocks of flats. The total cost of the remedial works was estimated to be around £25m.
The developer argued that an RCO would not be "just and equitable" as public funds were already being made available from the Building Safety Fund to cover the remediation costs. The court disagreed. The court acknowledged the existence of public funding but found that it ought to be a "last resort" and did not displace the requirement for the building developer to contribute to the costs of remedial works. The court also confirmed that the RCO could be retrospective, meaning that it could extend to costs incurred prior to the introduction of s124 of the BSA.
This case demonstrates that the availability of public funding does not displace a developer's obligation to cover remedial costs, and that developers can be held liable for costs incurred in relation to building safety defects prior to 28 June 2022.
Greater Glasgow Health Board v Multiplex Construction (Europe) Ltd and Others
The Scottish courts considered when the five-year prescriptive period begins for construction defect claims in Scotland, and limited when the saving provisions under section 6(4) of the Prescription and Limitation (Scotland) Act 1973 (the "1973 Act") can cure a time-bar claim.
The court found that prescription begins to run from practical completion. Greater Glasgow Health Board were unable to prove that the saving provisions of section 6(4) of the 1973 Act applied, as the court found none of the witnesses gave evidence that they were induced into error. The court drew a distinction between, "ignorance of a state of affairs" and "labouring under an error as to that state of affairs".
The decision makes clear that firstly, the prescriptive period begins to run from practical completion and secondly, for the purposes of the saving provisions, a party must go further than just showing it was unaware of an issue in order to demonstrate that it had been induced by error.
Legal & General v Halliday Fraser Munro
The Scottish courts considered whether collateral warranties automatically incorporate the prescriptive period contained in the underlying contract.
Legal & General purchased a multi-story office building in 2013 and in 2014, entered into a collateral warranty with Halliday Fraser Munro. The collateral warranty provided that in purchasing the block, Legal & General were relying on Halliday Fraser Munro's skill and judgement in the provision of architectural services as per the original appointment and that Halliday Fraser Munro warranted to use all reasonable skill and care in providing those services.
Legal & General discovered several defects in relation to the building and brought a clam against Halliday Fraser Munro. Halliday Fraser Munro argued that the collateral warranty allowed them to rely on the same prescriptive period that applied to their appointment, which would mean the claim was out of time. The court disagreed, as the collateral warranty did not include any terms that would restrict the prescriptive period to that of the original contract. In the absence of those terms, the court held that the collateral warranty was a standalone contract, which triggered a new prescriptive period from the date it was signed. The claim was found to be brought on time.
This case is a reminder that collateral warranties will not automatically incorporate the same prescriptive periods for making a claim as the original contract. Without express wording, prescription will run from the date the warranty is signed rather than practical completion.
Placefirst Construction Limited v CAR Construction (North East) Limited
The Technology and Construction Court ("TCC") declined to enforce an adjudicator's decision that a contractor failed to issue a valid payment or pay less notice under the Housing Grants, Construction and Regeneration Act 1996 (the "1996 Act"). The contractor's payment notice and pay less notice were both considered valid, despite being issued at the same time.
On 24 July 2024, CAR emailed its interim payment application to Placefirst. On 31 July 2024, Placefirst sent an email with two attachments: a letter purporting to be a pay less notice and an Excel workbook described as 'Valuation 30'. CAR argued that the pay less notice was invalid because it was served before the date it could validly have been served, as it preceded the issue of a notice determining the 'notified sum' under section 115(b) of the 1996 Act.
While CAR succeeded at adjudication, the TCC held that a 'notified sum' could validly be provided in a payee's application for payment. It is not the case that a payer must issue a payment notice and follow this with a pay less notice. The 'subcontract payment certificate', which purported to be a payment notice, was considered valid as it was intended to have separate effect from the pay less notice. The court acknowledged that although the content of a payment notice and a pay less notice are "precisely the same", one notice cannot perform the function of both.
This case makes clear that while one document cannot be issued as both a payment and pay less notice, the 1996 Act does not require a payer to issue a payment notice before issuing a pay less notice in circumstances where the payee's application for payment determines the "notified sum" to be paid at the relevant date.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
