Liability, mitigation and communication: the big lessons for UK construction from 2025’s court rulings

Some were major headline makers, others may have slipped under the radar, but all will shape what happens to the industry to varying extents.

To wrap up the year, here’s a guide to the judgments which may prove the most interesting, and the most important.

‘Pay less’ notices

In Placefirst Construction Ltd v Car Construction (North East) Ltd, the High Court provided useful clarification around the timing of ‘pay less’ notices. In short: a pay less notice under the Housing Grants, Construction and Regeneration Act 1996 (1996 Act) can be served prior to any payment notice.

This might seem counter-intuitive, but properly analysed, the 1996 Act does not contain any prohibition on issuing the pay less notice ahead of any payment notice. For those thinking about starting a ‘smash and grab’ claim based on the apparent absence of a pay less notice, it is now necessary to review the entirety of the exchanges with the paying party to establish whether a pay less notice might have been served early in the relevant payment cycle. 

For those on the receiving end of a ‘smash and grab’, this case reinforces the point that an objective analysis will be applied when considering whether any document, or combination of documents, can operate as a valid payment notice or pay less notice as the case may be. 

To put it another way, even if your paperwork is sub-optimal, it might still be good enough.

Information and business liability orders

In BDW Trading Ltd v Ardmore Construction Ltd and others, the High Court was concerned with an information order application under section 132 of the Building Safety Act 2022 (BSA). Courts will likely have to wrestle with many more applications like this in the short-to-medium term, so it is interesting that this application was rejected.

Where a body corporate is liable under the Defective Premises Act 1972 or for a "building safety risk", section 130 of the BSA entitles the court to make a building liability order (BLO), extending liability to other bodies corporate "associated" with it. The term "associated" is broadly defined.

Section 132 of the BSA entitles someone considering applying for a BLO to request an information order, so they can establish whether companies are "associated" or not.

This judgment suggested that information orders could only be brought against the company with the liability, not its “associates”; might only be granted sparingly; and, where they are granted, the information to be disclosed might very well be limited.

Meanwhile the High Court in 381 Southwark Park Road RTM Company Ltd and others v Click St Andrews Ltd (In Liquidation) and another was the first to award a BLO under the BSA - information orders were granted too.

In contrast to the approach in BDW Trading Limited, information orders were made against multiple parties, including a third party suspected of receiving assets at an undervalue. A far-reaching order was granted including full details of the consideration given in respect of share ownership in a subsidiary, the personal benefits received by certain shareholders and full details of the subsidiary’s financial position. 

The BLO itself was made against the holding company for the insolvent Click St Andrews Ltd, despite an intermediate corporate layer between them, as the holding company owned all the shares in a subsidiary which in turn wholly owned Click St Andrews Ltd.

Taking the above two judgments together, it is clear that the law is still to settle on BLOs and information orders. For that reason alone, and for the time being at least, very careful consideration ought to be given to the need for and scope of such applications.

Terms and conditions

The interplay between the ‘front end’ terms and conditions of a building contract and the supporting documents including bespoke amendments, clarifications and technical specifications was considered by the High Court in John Sisk and Son Ltd v Capital & Centric (Rose) Ltd.

The underlying standard form contract was the JCT Design and Build Contract, 2016 edition. In the usual way, the standard form was subject to certain amendments and clarifications. On the face of it, the amendments made Sisk responsible for all risks in relation to the existing site - including existing structures and the risk of inaccurate information provided by Capital & Centric - but that was all subject to "item 2 of the clarifications" contained within the Employer's Requirements.

That item provided that, in respect of existing structures risk, "the Employer is to insure the Existing buildings/works … obtain warranty from Arup with regard to the suitability of the proposed works”.

On an objective analysis, it was held that the clarification could not mean anything other than that Capital & Centric had accepted the contractual risk associated with the suitability of the existing structures. It was a limited carve-out of the otherwise wide ambit of the ‘front end’ terms and conditions.

This is another reminder that supporting documents to building contracts should not be unthinkingly included without having been reviewed and aligned with the other component parts of the contract.

Mitigation 

When it comes to claims for damages, it is well settled that the ‘innocent party’ -the one bringing the claim - will be under a duty to mitigate its losses. The assumption is that such a duty would drive an innocent party to implement the cheapest available solution to rectify defective works, whatever that solution might be.  

The judgment in Southern Electricity Power Distribution PLC v OCU Modus Ltdconfirms that such an assumption is not necessarily the correct starting point. The High Court held that a substation owner’s decision to carry out a more expensive remedial scheme to address the contractor’s defective cable circuit work that did not require significant power outages, compared to a cheaper suitable scheme which did, was reasonable. 

While each case will turn on its own particular facts and circumstances, provided there is some objectively justifiable reason for selecting one remedial scheme over another, it will not always be necessary to procure and deploy the cheapest solution.

Defective premises

Meanwhile the Supreme Court’s judgment in URS Corporation Ltd v BDW Trading Ltd (Rev1) received more commentary than any other in 2025, but the key points can be summarised quite quickly:

• The Defective Premises Act 1972 (DPA) imposes a duty on a person taking on work for or in connection with the provision of a dwelling to see that the work which they take on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that the dwelling will be fit for habitation when completed. 
• The extended period for bringing claims provided for under the BSA applies to claims that are dependent on the DPA, not just those brought under the DPA(i.e.the 30-year limitation period applies to claims brought by homeowners against developers under section 1 of the DPA, and to “onward” claims for contribution or for negligence brought by developers against the supply chain (builder, architect or engineer) directly responsible for the underlying building safety defect(s).
• The duty under section 1(1)(a) of the DPA is owed to any person to whose “order” a dwelling is being built. That person will ordinarily be its first owner, but the first owner can include the original developer. A developer that acts as first owner will owe a DPA duty and will be owed a DPA duty.
• Even though BDW had not faced any claims from third parties, it elected to carry out remedial works to address defects. The Supreme Court was clear that BDW could bring a contribution claim against URS, to recover pure economic loss, under the Civil Liability (Contribution) Act 1978 (Contribution Act). According to the Supreme Court, it was sufficient that BDW had made a payment in kind (i.e.the cost of carrying out the remedial works), in compensation for the damage suffered by the homeowners, to entitle it to bring a claim against URS under section 1 of the Contribution Act. There did not need to be a judgment or settlement between BDW and any third party, and nor did any third party need to have ever asserted any claim against BDW, for BDW to be entitled to raise such a claim. The repair costs were incurred by BDW “because they were the obvious consequence of URS failing to perform its services with the professional skill and care required”.

Communication issues

As our methods of communication become more varied and easier to send, encompassing everything from email and text messages to chat services such as WhatsApp, it is prudent to remind those in business that the apparent informality of such exchanges does not dilute their contractual potency. 

In Jaevee Homes v Fincham, the High Court decided that the parties had entered a concluded contract by an exchange of WhatsApp messages. The essential terms had been agreed in those messages and would be supplemented – as required – by implied terms. 

The warning is this: think very carefully before committing anything to writing, in any format and on any platform.

Matters of timing

The issue of time bar - termed ‘limitation’ in England & Wales, and ‘prescription’ in Scotland - is one that the courts both north and south of the border regularly wrestle with. In the Scottish case of Legal and General Assurance (Pensions Management) Ltd v The Firm of Halliday Fraser Munro and others, the Court of Session found that the time bar periods applying to claims under a collateral warranty and claims under the original professional appointment agreement were not necessarily coterminous.  

In this instance, it was found that the time bar period for claims under the collateral warranty could not have begun until the warranty was granted, which fell a few years after the works had been completed. While this judgment is only persuasive in England & Wales, it is anticipated that the market throughout UK will want certainty and consistency around the time bar position under collateral warranties and original building contracts/professional appointments. 

To achieve that end, sophisticated drafting solutions will have to be found. In particular, the Court of Session expressed some doubt that drafting which simply provides for a warrantor to have “no greater liability” under the collateral warranty than under the original building contract or appointment would work to align the relevant time bars.

Enforcement

When it comes to enforcing adjudicators’ decisions, the approach of the courts has been clear for a number of years: only in exceptional circumstances will decisions not be enforced. Such circumstances were found to be present in the case of RNJM Ltd v Purpose Social Homes Ltd. 

Getting what is perceived to be the ‘right’ adjudicator for a dispute is a key aim for referring parties. While that is understandable, referring parties who misrepresent matters to secure the appointment of a particular adjudicator risk completely wasting their time. 

Here, the court refused to enforce an adjudicator's decision because the referring party had misrepresented the existence of a dispute with an adjudicator who had decided a previous adjudication between the parties, where it seems that the referring party did not want that earlier adjudicator appointed again. 

That misrepresentation meant that the appointment of another individual as adjudicator was immediately invalid with the adjudication being pointless. If you want to secure the ‘right’ adjudicator, it might be a better use of your time to explore agreement with the responding party.

As will be obvious from the above, to understand, manage and reduce the risks facing your business, it is essential that you keep on top of the practical implications of the judgments being issued by the courts. 

To help you with that, we’ll be back in 2026 with updates on all the key cases as they land.