EWJ August 62 2025 web - Journal - Page 42
had provided emergency services. These payments
were held to be unrecoverable. Unlike the three cases
above, here the parties had a contract, so the analysis
of loss being purely economic could not explain the
result. Instead, the Supreme Court in BDW v URS
analysed this case as a matter of remoteness, a fact-specific matter. The court said that this case could not
amount to authority for any general principle that
voluntary payments are not recoverable in law.
“As a matter of law, the possible absence in 2019 of an
obligation on the part of BDW to carry out such works is
irrelevant to BDW’s ability to recover those costs as damages.”
(at [53]).
Although not expressly stated in the Supreme Court,
it was this reasoning and this finding that underpinned URS’s appeal.
Is there a voluntariness principle?
The Supreme Court held that there is no general
principle that a party that suffered loss by it voluntary
acts was unable to recover for them
Consequently, the Supreme Court held that, since
there was no general principle that losses voluntarily
incurred fell outside of a professional’s scope of duty,
it was held that, in this case, BDW’s losses were not
outside of its scope of duty.
The court carefully considered the four cases that
URS submitted as evidencing the contrary. Three of
the cases were explicable by the bar on recovery for
pure economic loss:
The relevance of voluntariness – causation and
mitigation
Although the Supreme Court held that there was no
general principle of voluntariness, it noted there was
a strong argument that voluntariness would still be
relevant to a consideration of legal causation or
mitigation. Consequently, it is not irrelevant.
l Admiralty Comrs v SS Amerika [1917] AC 38
concerned a steamship which collided with a submarine, killing almost all on board. The Admiralty Commissioners made gratuitous payments to the families
of the deceased. It was held that the steamship’s owners were not liable for these payments. The Supreme
Court in BDW v URS explained this result through an
analysis of pure economic loss: the payments were
made following deaths, and in any event they were
not directly consequent on the damage to the submarine. Either way, the payments amounted to pure economic loss, for which there is no general duty. Further,
some of the discussion in the judgment relied on
language more obviously relevant to concepts of
mitigation or legal causation.
Indeed, before URS’s counsel had even got into the meat of his
submissions during the hearing of the Appeal, there was a discussion concerning whether the principle of voluntariness was
relevant to scope of duty or to remoteness or to causation or to
mitigation and what could or could not be argued on the appeal. This theme was returned to on a number of occasions
throughout the hearing, perhaps indicating the Supreme
Court’s position before its judgment had been issued.
Ultimately, the Supreme Court held that the more
obvious role for any principle of voluntariness is in
considering whether the chain of causation from
breach of duty to loss has been broken by the
claimant’s own voluntary conduct or whether, subsequent to the cause of action, the claimant had failed in
its so-called “duty” to mitigate its loss. This was a
factual enquiry which was outside of the scope of the
Appeal.
l Esso Petroleum Co Ltd v Hall Russell & Co Ltd (The Esso
Bernicia) [1989] AC 643 concerned an oil spill because
of damage to a tanker caused by defective tugs. Esso
paid compensation for oil pollution under a voluntary
scheme to which it belonged. But Esso could not recover for those payments from the tugs’ owners.
Again, the Supreme Court analysed the result
through the prism of pure economic loss: while the
payments to compensate for oil pollution may have
been because of a voluntary scheme, they were
certainly unrecoverable as pure economic loss.
Consequently, URS is not, yet, liable to BDW for the
losses claimed. It can still argue that the losses voluntarily incurred by BDW were not caused by URS’s
breach but, instead either there was a break in the
chain of causation or BDW failed to mitigate its losses
by incurring costs it need not have incurred.
l Hambro Life Assurance plc v White Young & Partners
(1987) 38 BLR 16, in which a fund chose to remediate some of its investment properties despite having
no legal responsibilty to do so. The court rejected the
fund’s claim against the local authority that had approved the plans for the defective properties and
whose building control officers had approved them.
This was on the basis that the Anns v Merton principle was still operative, and so the local authority owed
no duty of care to the fund (later overturned by Murphy v Brentwood). But in any event, this was pure
economic loss, and would be unrecoverable.
We consider such arguments are likely to be extremely
difficult for URS to maintain given the legal principles
applicable to such issues and the firm indications given
by the Supreme Court in this case that BDW did not,
in fact, act voluntarily. As to the legal principles, the
Supreme Court quoted the well known passage from
Lord MacMillan’s judgment in Banco de Portugal v
Waterlow & Sons Ltd [1932] AC 452 (at page 506):
The fourth case was slightly different:
“Where the sufferer from a breach of contract finds himself in
consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order
to extricate himself ought not to be weighed in nice scales at the
l In Anglian Water Services Ltd v Crabshaw Robbins &
Co Ltd [2001] BLR 173, the defendant contractors severed gas mains. Anglian paid householders whose
supply had been affected and local authorities who
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