EWJ August 62 2025 web - Journal - Page 43
URS relied on only four cases for the lynchpin of its
appeal, and the Supreme Court itself could only find
one reference to the principle in commentary from
2010, and even this stated voluntariness to be relevant
to causation.
instance of the party whose breach of contract has occasioned
the difficulty. It is often easy after an emergency has passed to
criticize the steps which have been taken to meet it, but such
criticism does not come well from those who have themselves
created the emergency. The law is satisfied if the party placed
in a difficult situation by reason of the breach of a duty owed
to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of
such measures merely because the party in breach can suggest
that other measures less burdensome to him might have been
taken.”
The lack of authority may be because it is unusual for
someone to “voluntarily” incur losses, but, even when
they arguably did, the outcome of those limited cases
is more readily explained by more developed law on
assumption of responsibility for pure economic loss or
by remoteness. In the tortious cases the court considered, there could be only one outcome following that
analysis: there was no general duty for pure economic
loss. The one case outside that analysis – Anglian
Waters – was explicable by remoteness, and this was a
matter of fact. Following BDW v URS, it is still open to
argue that, in a contractual relationship involving assumption of responsibility, voluntary payments should
not be recoverable by reason of remoteness, but it may
be a rare case which can establish remoteness as a
matter of fact.
The Supreme Court has endorsed that the position of
embarrassment of a claiming party and the difficulties
faced by that party are relevant considerations to the
reasonableness of the actions of the claiming party.
In relation to mitigation, the Supreme Court stated
that the enquiry is whether the claimant could have
avoided its loss by taking reasonable action or whether
expenses or other additional losses incurred, increasing its loss, were reasonably incurred. This was described as a fact-specific enquiry that would have to
await trial.
Although the court held that there is no general
principle that voluntary losses are outside a party’s
scope of duty, voluntariness is still relevant to an analysis of causation and mitigation. Even had the
Supreme Court not given its clear indication as to its
opinion on whether or not BDW acted voluntarily, the
argument appears difficult to run. URS’s primary contention throughout the various hearings was that
BDW’s primary motivation in carrying out the remedial works was to protect its reputation. However,
where, as here, there was a risk to the safety of the occupants of the properties which BDW remedied, that
seems a difficult argument to make out. This was not
BDW’s error, even if it could have been held legally liable. It was URS’s error. Further, BDW did not otherwise benefit from carrying out the remedial works;
it had no proprietary interest in the properties.
Despite having no need to consider this issue given its
findings on scope of duty and its recognition that a
further trial was required, the Supreme Court found
that three features of the assumed facts indicated that
BDW was not acting truly voluntarily in remediating
the defective buildings.
l First, the buildings were at risk of collapse, which
would cause serious injury or worse. In such a
circumstance BDW would not have a limitation
defence.
l Secondly, in most cases (and certainly here) a
limitation defence bars remedy; it does not extinguish
liability.
l Thirdly, even though reputational damage was not
recoverable as a head of loss, it was still relevant to
whether an action was truly voluntary. The general
public interest, including moral pressure, was relevant
to whether BDW can have acted truly voluntarily. We
return to this issue below.
However, if URS wishes to maintain this case (and it
will obviously have more information than we do as
to the decision-making process of BDW) then there
will have to be a trial of those issues to determine factual causation and whether BDW could have mitigated its loss. The Supreme Court’s strong indication
that BDW did not act voluntarily may mean such a
trial is unlikely.
If, as the court found, BDW was not acting truly
voluntarily, then it seems only likely that there will be
a trial on these issues if any of the assumed facts are
wrong. If (as they appear) they are accurate, the
Supreme Court has given a clear indication that it
does not consider BDW acted voluntarily. In these circumstances, an argument that there has been a break
in the chain of causation or that BDW failed to
mitigate its loss looks extremely difficult.
What will be interesting, if such a trial does take place, is how
mitigation is argued. Here, URS’s case will not be to identify
a cheaper alternative remedial scheme. It will, essentially, be
suggesting no remedial works should have been carried out at
all because BDW had no obligation to do so. Similarly to the
arguments on causation, given the indications from the
Supreme Court that BDW did not act voluntarily, we are
sceptical that such arguments will be successful.
Discussion
What strikes us is the dearth of law on the principal of
voluntariness. Whilst, on first blush, it appears attractive – why should a professional be taken to have assumed liability for losses which a claimant has chosen
to incur, rather than had any obligation to do so –
there was little authority to support this assertion.
EXPERT WITNESS JOURNAL
In other cases, however, a court may have to grapple
with the issue of the relevance of damage to reputation. Fraser J held that damage to BDW’s reputation
was not within URS’s scope of duty. However, damage
to BDW’s reputation is relevant to whether or not
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