BDW v Aecom: extending limitation

The Building Safety Act 2022 has caused a great deal of discussion since its implementation in 2022. However, it is s.135, in particular, that has caused much of the industry to revisit historical claims.

This is due to s.135’s introduction of new limitation periods in respect of claims, including the extension of the limitation period under the Defective Premises Act 1972 (DPA). This extends from six years to 30 years for claims arising prior to 28 June 2022.

The recent decision in BDW Trading Ltd v URS Corporation Ltd (now part of Aecom) provides some clarity as to how the courts will approach new claims that benefit from these amendments.

The case concerned an application by BDW Trading Limited (BDW) to amend its original pleadings to add new claims under the new limitation periods introduced by the DPA and the Civil Liability (Contribution) Act 1978, as amended by the BSA. This article will focus on the introduction of new claims under the DPA.

The original case, heard in December 2021, concerned negligence claims relating to structural defects in a number of high-rise buildings against URS and others. URS was the structural designer for the construction of the high-rise buildings across a number of projects for BDW.

Although BDW no longer owned the buildings, it sought recovery of remediation costs and compensation for reputational damage. The court in that case refused the defendant’s application to strike out the claim, but granted permission to appeal the strike out to the Court of Appeal. The proceedings were then stayed by consent until BDW’s application to amend its pleadings.

The defendant opposed the inclusion of the new claims for a number of reasons. However, most interestingly the defendant argued that there was nothing in s.135(6) of the BSA stating that the section applies to claims which were finally determined before the section came into force on 28 June 2022.

It argued that URS’s appeal may succeed and retrospectively determine the case before 28 June 2022. The court commented that although s.135 raises questions in respect of interpretation, URS could still raise, at appeal, the defence that s.135 had no application to these proceedings and should be dismissed.

Permitting the amendments would not preclude URS from putting forward a limitation defence.

The court granted the application, because as a matter of principle, amendments should be allowed if they allow a party to plead its real case and it has some prospect of success to have an application granted, provided there is no undue prejudice to the opposing party.

There is a low threshold in respect of an applicant having to show some prospect of success, and for this to be satisfied the proposed amendments had to be reasonably arguable and not “fanciful”.

In respect of the DPA amendments, the court held that it was reasonably arguable that BDW could take advantage of the amended s.1 of the DPA to bring new claims. It commented that it “is sufficient to permit BDW to plead the proposed amendments. Whether those amendments succeed, in due course, will be a matter for trial”.

This case clearly shows the impact that the extended limitation periods introduced by the BSA are having upon claims, particularly those which have already been heard at first instance.

With the introduction of s.135 of the BSA, parties will want to revisit any potential claims it may now have which were previously out of time, whether there are already proceedings on foot or not.

Further, the commentary in respect of the ambiguous nature of s.135 of the BSA highlights the high probability that we will see further developments in this area in the future.

Stephanie Geesink is of counsel and Dominic Turner-Harriss is an associate at Watson Farley & Williams