When can a previously time barred claim under the Defective Premises Act be added to proceedings?

In ongoing proceedings by a developer of residential apartment blocks against a main contractor and the consultancies that prepared the structural drawings for the buildings, the developer has been granted leave to add new claims to its pleaded case based on the extended retrospective 30 year limitation period for claims under s1 of the Defective Premises Act 1972 (the DPA). This follows statutory amendments made by provisions of the Building Safety Act 2022 (the BSA) that took effect on 28 June 2022.

Here we review the building safety decision in BDW Trading Ltd v AECOM Infrastructure & Environment UK Ltd [2022]. The judgment remains extempore at present, with no transcript of the judgment available – this review therefore is based on reports of this decision by the of the Technology and Construction Court (the TCC).

Background

• BDW is a residential developer, commonly known as Barratt. The defendants in this case are civil engineering companies (here referred to collectively as Aecom for ease of reference).
• Many years ago, Barratt constructed 130 apartment blocks; Aecom provided the structural drawings for these buildings.
• During cladding remediation works to one of the blocks in 2019, the structural design was found to be defective. Barratt carried out further investigations and now alleges that 27 blocks will require structural remedial works.
• Proceedings were commenced by Barratt regarding this dispute in 2020 and remain ongoing. This hearing related to Barratt’s application to amend its pleadings following various provisions of the BSA taking effect in June 2022. The new claims Barratt wished to add related to s1(1) of the DPA and s1 of the Civil Liability (Contribution) Act 1978 (the CLA).

The New Claims

Defective Premises Act claim

Barratt’s contention is that on 28 June 2022, provisions of the BSA took effect meaning that the retrospective  time limit for claims under s1 of the DPA was extended from 6 years to 30 years. Barratt’s claim under the DPA was therefore no longer time barred.

Civil Liability (Contribution) Act claim

Barratt also argued that a claim for contribution could be added under s1 of the CLA as the defendants were liable in respect of the “same damage”.

TCC decision

The TCC granted Barratt’s application to amend its pleadings to add both of the new claims.  The key points are set out below.

• Barratt’s new claims under the DPA and the CLA were reasonably arguable.
• The proposed DPA amendments were not short or easy points.
• Aecom argued that any claim by Barratt under s1 of the DPA was barred under s1(4), but the TCC held that it was reasonably arguable that Barratt could make a claim under s1 of the DPA and that s1(4) of the DPA was intended to prevent a developer escaping liability by asserting it had arranged for others to carry out the work.
• The TCC noted that the CLA was difficult to interpret but it was reasonably arguable that s1(1) of the CLA did not here require a claim to have been made by the homeowners in order for that provision to be engaged (as had been contended by Aecom) ie liability in respect of the same damage would (arguably) suffice.
• It was noted by the TCC that the CLA point was of considerable public importance following the Grenfell tragedy.
• The TCC considered s135 of the BSA which also raised issues relating to its interpretation. Aecom’s position was that it should not be precluded in the future from arguing that the claim had been finally determined before s135 of the BSA came into force which would mean that arguably, it had limitation defences to both of the new claims. The basis for this contention lies in Aecom’s ongoing appeal against an earlier strike-out order in these proceedings. Barratt agreed that if Aecom is successful in that appeal, it is likely to be able to run this argument – this point was accepted by the TCC.

More claims inevitable

This TCC decision is not surprising in substance but is notable as it is the first decision of the TCC on this point i.e the revival of previously time barred claims following the amendments to the DPA limitation periods effected by the BSA.

Just under 6 months remain of the buffer period which provides that the retrospective limitation period for these revived claims will not expire until one year after the provisions came into force. More DPA claims against  contractors and construction professionals will undoubtedly follow as potential claimants become increasingly confident about re-opening and pursuing claims that were out of time prior to 28 June 2022.