Category: Insurance case law · Reviewed by Al Jabbar, Broker · Specialist Risks · Last reviewed June 2026
Court of Appeal decision holding that, in a standard builder-purchaser contract, the builder owes no concurrent duty of care in tort to the purchaser for pure economic loss arising from defects in the building.
Mr Robinson purchased a new house from PE Jones (Contractors) Ltd, a builder-developer, under a standard form contract for the sale of land with the building works to be completed by the seller. The contract incorporated the National House Building Council (“NHBC”) scheme, providing structural defect cover for a defined period, and contained express provisions limiting the contractual remedies available against the builder beyond the matters covered by the NHBC.
Some years after completion — well outside the contractual limitation period for breach of the building obligations — Mr Robinson discovered defects in the gas flues serving the property. He alleged that the flues had been installed in breach of the relevant building regulations, that the defect was potentially dangerous, and that he had a remedy against the builder.
Because the breach of contract claim was statute-barred, Mr Robinson sought to bring his claim in the tort of negligence. He argued that the builder owed him a concurrent duty of care in tort, parallel to the contract, on the Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 principle of assumption of responsibility. The losses claimed were the cost of remedying the defective flues — pure economic loss — rather than personal injury or damage to other property.
The builder applied to strike out the tort claim on the basis that, in a standard builder-purchaser contract, no such duty was owed and that the law as stated in Murphy v Brentwood DC [1991] 1 AC 398 precluded recovery of pure economic loss arising from defects in a building from the builder of that building in the absence of contract.
The principal issue was whether a builder, who has constructed a dwelling under a contract with the purchaser, owes the purchaser a concurrent duty of care in the tort of negligence in respect of defects in the building giving rise to pure economic loss. This required the Court of Appeal to consider the interaction between the Murphy v Brentwood principle (that pure economic loss caused by a defective building is not generally recoverable in tort) and the Henderson v Merrett principle (that a professional may owe a concurrent tortious duty where a relationship is characterised by assumption of responsibility).
A subsidiary issue was the extent to which the contractual structure — including the limitation periods, the NHBC cover and the express scope of the building obligations — was relevant to the question whether any tortious duty should be recognised.
The Court of Appeal unanimously upheld the strike-out of the tort claim. Jackson LJ, giving the leading judgment with which Stanley Burnton LJ and Maurice Kay LJ agreed, held that the ordinary builder-purchaser relationship does not give rise to the kind of assumption of responsibility that founds a Henderson v Merrett tortious duty for pure economic loss. The contractual relationship between vendor-builder and purchaser is essentially one of supply, with allocation of risk through the express contractual terms, statutory protections and any structural warranty scheme.
The court distinguished cases in which a professional — a surveyor, an architect, a structural engineer — has expressly accepted responsibility for the quality of advice or design provided to the client. There the professional relationship is characterised by reliance on expertise and a duty of care in tort runs in parallel with the contract. By contrast, a builder selling a house under a standard contract is providing a finished product, with the parties’ rights and remedies defined by the contract and by statute.
The court reaffirmed the orthodox position established by the House of Lords in Murphy v Brentwood DC, namely that pure economic loss caused by defects in a building is not generally recoverable in the tort of negligence outside specific categories, such as those falling within the Defective Premises Act 1972.
A builder who contracts with a purchaser to sell a newly constructed dwelling does not, in the absence of special circumstances indicating assumption of responsibility, owe the purchaser a concurrent duty of care in the tort of negligence in respect of pure economic loss caused by defects in the building. The contractual relationship is one of supply and the parties’ rights are defined by the contract, supplemented by statute (notably the Defective Premises Act 1972) and any applicable structural warranty scheme. The Henderson v Merrett principle of concurrent duties does not, of itself, extend to the standard builder-purchaser relationship.
Robinson v PE Jones is a landmark decision for the construction industry and for construction PI insurers because it confirms the absence of a parallel tortious route for recovery against builders for pure economic loss outside contract. From an underwriting perspective the case clarifies that, for traditional builders selling new homes, exposure to defect claims is principally contractual and arises through breach of contract, breach of the Defective Premises Act 1972, and through any structural warranty arrangement such as NHBC.
For PI insurers writing the design and consultancy side of construction risk — architects, structural engineers, civil and MEP consultants, project managers — Robinson reinforces the distinction between professional consultants (who are subject to concurrent tortious duties under Henderson v Merrett) and builders (who are not). This distinction matters when constructing policy schedules, defining “Insured Services” and aggregating losses across different roles on a project.
The case is also important to brokers placing latent defects cover, structural warranty cover and contractor PI. It supports the use of structural defect insurance as the principal vehicle for non-contractual purchaser protection and informs discussions about contractual liability extensions on contractor liability policies, including the value of express collateral warranties to onward purchasers and funders.
By Matt Bartlett, Director, on 2026-06-06. Next review: 2026-12-06.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-06. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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