Revisiting the DPA 1972: Insights from URS v BDW [2025] UKSC 21

This is the next instalment in Gatehouse’s analysis of the decision in URS Corporation Ltd v BDW Trading Ltd [2025] UKSC 21. In this article, we focus on the Supreme Court’s treatment of the Defective Premises Act 1972 (the “DPA”).

The Issues

The appeal raised two principal questions in relation to the DPA, which appear at first glance to be relatively simple. Lords Hamblen and Burrows summarised them as follows at [16]:

“Did URS owe a duty to BDW under section 1(1)(a) of the DPA and, if so, are BDW’s alleged losses of a type which are recoverable for breach of that duty?”

URS’s duty to BDW

The first question draws into focus the wording of section 1(1)(a) of the DPA, which describes the first of two categories of person to whom the duty under section 1(1) is owed, namely:

“if the dwelling is provided to the order of any person, to that person”

That is to be contrasted with section 1(1)(b), which provides that the duty is also owed to “every person who acquires an interest (whether legal or equitable) in the dwelling”.

On the other hand, section 1(4) of the DPA provides, in summary, that a person who, in the course of their business, arranges for another to take on work for or in connection with the provision of a dwelling will be treated as having taken on the relevant work and will therefore be treated as amongst those who owe a duty under section 1(1).

It was common ground that BDW had “arranged” for the relevant works to take place and therefore owed a duty to the residents of the building pursuant to section 1(1). The question was whether BDW could simultaneously be owed a duty because the works were completed “to its order”.

The Decision Below

The issue had not arisen directly at first instance. After the passing of the Building Safety Act 2022 and the extension of the applicable limitation period, BDW had sought permission to amend its Particulars of Claim to include a claim that URS had breached section 1(1) of the DPA. That application had been allowed by Adrian Williamson KC, sitting as a deputy judge of the High Court, despite URS’s protestations that it did not owe any such duty to BDW, on the basis that such points of law were to be determined at trial rather than summarily on an amendment application.

In the Court of Appeal, Coulson LJ decided that the deputy judge’s approach was correct as a matter of principle (see [153 – 154]) and it was therefore not necessary to address the substance of URS’s position, but he did so (albeit obiter) because the points had been fully argued.

URS had relied on two main arguments to support its case:

• As a matter of interpretation of the statute, and particularly in light of the Law Commission Report that preceded it, the DPA was intended to provide protection to the “lay purchasers” of defective properties rather than commercial developers such as BDW.
• BDW could not both owe and be owed a duty under section 1(1).

Coulson LJ had little hesitation in rejecting both limbs of URS’ case. He held that “the straightforward grammatical meaning of the words used in s.1(1)(a)” indicated that BDW could indeed be owed a duty, regardless of the other features of its role in the development. It was common ground that BDW had a contract with URS for the provision of structural engineering services and that work was self-evidently being provided “to the order” of BDW.

For reasons we address below, it is particularly notable that Coulson LJ robustly rejected URS’ reliance on the Law Commission’ report on the policy underlying the DPA. He doubted that the report was admissible at all in circumstances where the statute was itself free from ambiguity but found that its contents did not assist URS in any event: although the Law Commission had referred to providing protection to individual purchasers, it had not sought to limit the ambit of the DPA to those people and expressly referred to commercial developers on several occasions.

The Supreme Court

In the Supreme Court, URS abandoned its primary argument that section 1(1) applied generally only to “lay purchasers” and instead asserted that a proper interpretation of the DPA indicated that a person who owes a duty under section 1(4) (i.e. a developer) cannot be owed a duty under section 1(1)(a). URS placed substantial reliance on the background to the DPA and its broader context. First, as it had done in the Court of Appeal, it referred to the Law Commission’s report on the DPA, which was said to show that (at [136]):

“the purpose of the DPA was to address unfairness suffered by purchasers of new dwellings, not to protect developers who do not inhabit dwellings”

Second, URS pointed to the commercial realities of the parties’ positions:

“Developers would be owed contractual duties and duties in tort by those they engage, suffer no inequality of bargaining power and are well able to look after their own interests. There is no warrant in the background to the DPA or in its terms for treating developers as being in a privileged position with regard to all other contractors or to interfere with freedom of contract and party autonomy by prohibiting any exclusion or restriction of a duty owed to developers by other commercial parties”

The Supreme Court’s leading judgment on the issue was given by Lords Hamblen and Burrows and rejected URS’s case. Their Lordships dealt first with the wording of section 1(1) itself and noted that section 1(1)(b) made anyone “who acquires an interest … in the dwelling” a beneficiary of the duty. It followed that section 1(1)(a) must be directed at a different category of person, who they said would most obviously be the “first owner” of the dwelling who orders the relevant work.

However, their lordships noted that section 1(1)(a) is drafted in sufficiently broad terms to capture a person who “orders” the relevant work even if they have no interest in the property at all, although that would be an “unusual situation” (at [141]).

In rejecting URS’ argument that a person could not both be owed and owe a duty under section 1, the court placed significant reliance on the Law Commission’s report on the DPA and their Lordships said at [144] that it was:

“well established that Law Commission Reports may assist in identifying the purpose of (including the mischief addressed by) a statute and that the context thereby disclosed may assist in ascertaining the meaning of the statutory words”

The court noted that several passages of the Report indicated a “concern that “purchasers” as defined would not capture every person who might acquire a new dwelling from a builder”. Their lordships concluded that the purpose of the duty under section 1(1) was to protect the interests of both purchasers and any person who “has an interest in the dwelling other than by acquisition or purchase” (at [149]). Given the court’s observations at [141] about the breadth of section 1(1)(a), the reference to “interest” in [149] must extend beyond mere proprietary interests.

Their Lordships therefore concluded that (at [159]):

“…when the meaning of the words used in section 1(1)(a) is considered in the light of their context and the purpose of the statutory provision they should be interpreted as applying to any person, including a developer, to whose “order” a dwelling is being built. That person will ordinarily be its first owner…”

BDW’s Losses

URS’ second substantive objection to BDW’s claim under the DPA was that BDW had not suffered any actionable loss because it had sold the building by the time that the defects were discovered and rectified.

The Decision Below

In the Court of Appeal, that argument was largely defeated by Coulson LJ’s decision on the preceding point. Once it was accepted that BDW was both a subject and beneficiary of the obligations imposed by the DPA, the importance of its ownership of the building was greatly diminished: because of its ongoing duty to those acquiring interests in the property, BDW could continue to suffer a loss (in the form of liability to purchasers) long after it relinquished its proprietary interest, which it could seek to recover through its own claims under the DPA.

However, Coulson LJ noted that the argument was also contrary to the established law in respect of the losses recoverable under DPA, in which no requirement of property ownership had been established.

The Supreme Court

Lords Hamblen and Burrows dealt with the argument in a similar manner, both in reasoning and brevity. They accepted BDW’s case that (at [161]):

“once it is accepted that the wording of section 1(1)(a) contemplates claims by developers against contractors, it follows that the premise of URS’s argument cannot be right: the DPA does contemplate losses of the kind incurred by BDW, namely losses incurred by a developer in remedying defects caused by its contractor’s breach of duty”

Lord Leggatt also agreed with Coulson LJ’s reasoning below. He said at [207] that the duty under section 1(1)(a) is clearly owed to “a person to whose order the dwelling is provided whether or not that person acquires an interest in the dwelling” and it would therefore be inconsistent for the losses recoverable under the act to depend on the existence of a proprietary interest. It was “naturally to be expected” that losses arising from a person’s own liabilities under section 1(1)(b) were within the scope of the DPA.

Further Considerations

The Supreme Court’s decision on the DPA is clear and contains few surprises; a developer can be owed duties under the DPA, and can do so even if they themselves owe duties to others. However, in our view, it gives rise to a number of wider considerations for litigators and leaves plenty of unanswered questions for future resolution. For example (and there really are plenty more):

First, in contrast with the decision of the Court of Appeal, the Supreme Court’s analysis is conspicuously purposive. Despite every judge who considered URS’ case concluding that it was clearly inconsistent with the plain wording of the DPA, the Supreme Court also provided extensive reasoning dedicated to the Law Commission Report and policy underpinning the Act. For example, we note the comment at [153] that “…the purpose of the DPA is better served if the DPA duty is widely, rather than narrowly, owed…”. That reasoning accords with the Supreme Court’s general emphasis on the broader legislative and commercial context following the fire at Grenfell Tower in 2017 (see for example [78 – 84]).

Although it might be said that the questions of statutory interpretation that reached the Supreme Court were capable of resolution on a strictly literal basis, there is little reason to suspect that the same could be said for the questions facing judges in future cases. Indeed, as Lord Leggatt noted at [201], the DPA has been “subject of trenchant criticism” because of the “longwinded, ugly and obscure” nature of its drafting. The Supreme Court’s decision provides at least a tacit indication of the role that “the purpose of the DPA” may play in the resolution of such obscurities arising in future cases.

Second, the Supreme Court’s judgment illuminates a presently unanswered question concerning the meaning of the DPA, namely what specifically is required by the “ordering” and “arranging” tests of sections 1(1)(a) and 1(4). Although it is now clear that those sections are not mutually exclusive — a person can be owed a duty under the former and owe a duty under the latter – the judgment does not fully resolve what role each section requires a person to have played before a duty is imposed, or whether they would be approached in the same manner.

At [139] Lords Hamblen and Burrows define a person who “orders” a dwelling as “those for whose benefit the dwelling is being erected, converted or enlarged” before commenting at [141] that the words are broad enough to cover a person who does not own the land or the building constructed upon it.

On the other hand, Lord Leggatt said at [197] that “commercial developers” are captured by section 1(4) “when they arrange for the provision of a dwelling in the course of their business”. Lords Hamblen and Burrows also noted at [130] that the Law Commission’s rationale for extending the duty under section 1(4) included a recognition that “a purchaser makes no distinction in the reliance they place upon sound workmanship between acquiring from a builder or from a developer who has employed that builder”.

The Supreme Court’s judgment therefore appears to suggest that both sections are to be interpreted broadly but future judgments will be required for further clarity on their particular requirements and any tensions between them. As matters stand, there is no definitive answer to whether a person can “arrange” for work to take place but not “order” it, or indeed vice versa.

Third,  what is the scope and effect of section 6(3)? The Court of Appeal at [185] to [187] had rejected a submission that the existence of section 6(3) – which renders terms in an agreement void if they purport to, or have the effect of, excluding or restricting the operation of the DPA – meant that BDW could not be owed a duty under the DPA. URS had argued that if a duty was owed to BDW by a professional under the DPA, section 6(3) would cut across any contractual limitation in that professional contract. In rejecting that argument, Coulson LJ had commented, enigmatically; “I do not think that s.6(3) has the draconian effect for which Ms Parkin argued”.  However, because he had other reasons for rejecting the submission, he did not explain exactly what draconian effect he had in mind or what alternative, less draconian effect, he thought would result from s.6(3). The point was not appealed to the Supreme Court.

Fourth, the case was concerned with the operation of s.1(1)(a). We now know that, under that limb, having an existing proprietary interest at the time the cost was incurred or the claim was brought was not a prerequisite and that such questions would need to be answered through the prism of causation. In part, this was explained by contrasting that section with the alternative limb of s.1(1)(b), which is linked to acquiring a proprietary interest. Does the same principle apply when establishing a duty under s.1(1)(b), such that a party acquiring an interest will retain those rights even if it subsequently no longer has that interest? Also, at what point must a party acquire the interest? The Supreme Court focused on the paradigm situation of a ‘first owner’ being owed duties under s.1(1)(a) and subsequent purchasers being owed duties under 1(1)(b), but where does that a first owner who did not “order” the works, and when must the interest be acquired for the purposes of section 1(1)(b)?

In short, the narrow (but important) points resolved by the Supreme Court will have significant impact on the courts’ approach to the DPA, but there remain a range of further points that require resolution before the full scope and effect of the DPA is understood with any degree of certainty.

Article by David Pliener KC and George Eyre