Construction law at the turn of 2026: looking backwards and forwards

In the sphere of our construction law, URS vs BDW was the leading judgment of 2025. The case concerned a claim by developer BDW against its engineer, URS, for the cost of remedying design defects in 12 residential tower blocks. When remedial works were carried out, BDW had no proprietary interest in the tower blocks and any relevant third-party claims against BDW (there were none) would have been time-barred. However, BDW had seen a serious risk to the occupants and its reputation.

The Supreme Court held that there is no general rule preventing a claim in negligence for what URS said was a voluntarily incurred loss. Nevertheless, URS would still be entitled to argue, later in the litigation, that it had not caused the loss and that the loss had not been mitigated.

Among other important points, the court decided that BDW, while owing duties to homeowners under the Defective Premises Act 1972 (DPA), was also owed a duty by URS under the DPA.

While URS v BDW was helpful to claimants in defective dwelling cases, Wilson vs HB was a reminder of the limits of what may be claimed for a breach of the DPA. The Court of Appeal accepted that various damages claims should be struck out. Claimants should take note.

The same court was due this year to decide if adjudicators have jurisdiction over DPA-breach disputes. At the end of 2024 the Technology and Construction Court (TCC) held that they did (in BDW vs Ardmore). As the appeal was dismissed (after Ardmore entered administration), claimants can continue to refer DPA-breach disputes to adjudication in reliance on the TCC’s judgment.

Earlier in 2025 Ardmore opposed an application by BDW for an information order under the Building Safety Act 2022 (BSA). That is: an order requiring information to be given to a claimant to enable it to apply (or consider whether to apply) for a building liability order (BLO). It appears from the TCC’s reasoning, when refusing the information order, that such orders will be rare – and, if granted, will only require limited data to be provided by the original wrongdoer and not by its associates.

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In more positive news for claimants, the TCC said that a BLO may be given before the original wrongdoer’s liability is established, although to recover from its associates that liability must still be established. The TCC also indicated that that liability may be established by way of an adjudicator’s decision (and not just a judgment, arbitral award or settlement).

This followed the TCC issuing the first known BLO at the end of 2024 in 381 Southwark Park Road vs Click St Andrews. The judgment gave helpful pointers as to when the “just and equitable” requirement for a BLO will be met; for example, an associate’s lack of assets will not usually preclude a BLO being made against it.

There is also a “just and equitable” requirement for a remediation contribution order (RCO) under the BSA. In 2025, the Court of Appeal gave further useful guidance on what the phrase means (in Triathlon vs Stratford). It also concluded that RCOs can include costs incurred before the BSA came into force in June 2022. The Supreme Court is set to hear an appeal on that point in 2026.

In the meantime, the First Tier Tribunal has continued – and continues – to issue RCOs and also remediation orders. Time will tell if the issuing of the latter will diminish the historic unwillingness of the courts to order specific performance requiring certain construction work to be carried out.

While English courts remain unwilling to imply a duty of good faith in most contracts, 2025 saw a rare example of a court finding that an express duty of good faith was breached

While English courts remain unwilling to imply a duty of good faith in most contracts, 2025 saw a rare example of a court finding that an express duty of good faith was breached. Matière vs ABM concerned JV agreements between two companies which had the aim of them jointly winning HS2 subcontract work. The TCC held that Matière breached its express good-faith duties both when liaising with the main contractor about reducing ABM’s scope and then about excluding ABM entirely. But ABM’s damages claim, for its loss of a chance of winning work, failed because Matière’s breaches had not materially reduced that chance. Matière had acted at the behest of the main contractor and with its encouragement. In any case, other factors made non-existent the chance of the JV winning the work.

It was a different Jaevee that the TCC – in Jaevee vs Fincham – found had concluded a contract by way of WhatsApp messages. The essential terms had been agreed. An implied term fixed a reasonable time for the works while the Construction Act provided the rules by which the agreed price would be paid.

Those rules were considered in Placefirst vs CAR. The TCC decided that a payment notice was valid even though it had a negative total and did not say that it stated the sum the payer considered due at the due date. It also held that a pay less notice may be given before the deadline for a payment notice has passed. Many will welcome this practical approach.

Notices were also addressed in Disclosure and Barring Service vs Tata. The Court of Appeal confirmed that an “if-then” notification clause set out a condition precedent to the claims covered by it. Lord Justice Lewison said that a “sentence whose structure is ‘if-then’ is the paradigm of conditionality”. The court left open – for tardy claimants – the possibility of a late notice fulfilling the condition precedent.

Another phrase commonly used in construction contracts was considered by five of the UK’s most senior judges in Water & Sewerage Authority of Trinidad & Tobago vs Waterworks. They opined on the “reasonably incurred” costs that a contractor was entitled to when its employer terminated for convenience a FIDIC Yellow Book 1999. The contractor did not have to delay performing if it expected the contract to be terminated, but it still had to prove that its claimed costs were reasonable. The contractor failed to show that it reasonably incurred cancellation charges it had agreed with its suppliers and so was not entitled to them.

Similarly in Buckingham vs FCC, a claim to “costs directly incurred” failed. The Court of Appeal confirmed a definition that it said was “consistent with how “direct costs” are understood”. Claimants beware.

What does the year ahead hold for us? First, parts of the Planning and Infrastructure Act 2025 came into force in December and more are due to come into force in February. The act seeks to cut planning delays and costs for homes and critical infrastructure. This links with the government’s plan to achieve a clean power grid by 2030 and to make the UK a green superpower.

The aim of the building safety levy is to raise £3.4bn over 10 years to fund the remediation of unsafe dwellings

The cost to developers of building new homes in England will, though, from October 2026, include a new tax – subject to certain exceptions and thresholds. The aim of the building safety levy is to raise £3.4bn over 10 years to fund the remediation of unsafe dwellings. 

On a related note, on 31 December 2025, the consultation on the British Standards Institution’s PAS 9980 closed. PAS 9980 sets out, as its title indicates, a methodology for “Fire risk appraisal of external wall construction and cladding of existing blocks of flats”. It is not just comments on PAS 9980 which are being considered, but whether to enshrine it in law.

The remedying of defective dwellings, following the Grenfell Tower disaster, is set to remain front and centre in the UK’s construction legal system for the foreseeable future.

Rupert Choat KC is a barrister, arbitrator and mediator at Atkin Chambers