The Building Safety Bill has now received Royal Assent so has officially become the Building Safety Act 2022, but this hugely important piece of legislation designed to "make provision about the safety of people in or about buildings and the standard of buildings" was still undergoing substantial and potentially important amendments in the final days of its passage through Westminster.
One such amendment on construction products and cladding in particular was introduced in February for England and Wales and proposed to extend to Scotland as recently as March. It will retrospectively introduce new duties of care and causes of action where none may have existed previously, and will also amend the Scottish law of Prescription and the English law of limitation (i.e. the time limits for raising actions) to prevent those newly created claims, or potentially others which have already been extinguished, from being time barred.
Although these new liabilities are primarily aimed at those manufacturing and marketing construction products, the wording may be sufficiently wide to risk a party seeking to include both professionals specifying products and contractors installing them in certain circumstances.
Construction product liability
The amended Act, which was was signed into law on 28 April, now includes a clause to create a new liability relating to construction products installed on residential buildings which result in the dwelling being unfit for habitation.
When it comes into force, the liability will be imposed on any person who fails to comply with a 'construction product requirement', which includes requirements under existing and proposed regulations stipulating conditions for the marketing and technical specifications of construction products.
Importantly, the Act also creates a new cause of action, allowing anyone with a right or interest in the dwelling (for example its current owners) to bring a claim against the party in breach. This would drive straight through the legal doctrine of privity of contract and/or the requirement for a common law duty of care to exist between parties in order for a claim to be pursued. This usually applies to allow parties to allocate risk and liability in construction operations and provides certainty to insurers providing cover, in particular that on a "claims made" basis.
If the changes are enacted, they will have a significant impact on parties throughout the construction chain and their insurers.
Notably, and particularly so given some of the evidence heard by the Grenfell Tower Inquiry, liability is also imposed on "any person who markets or supplies a construction product [and] makes a misleading statement in relation to it".
Possible unintended consequences for Scotland?
Until the final round of amendments, very little of the Building Safety Bill had any proposed application in Scotland. The notable exceptions to this were provisions relative to the Architects Registration Board, the new homes ombudsman scheme and the powers conferred on the UK Government to make regulations governing the supply and marketing of construction products.
The final amendments, which have now been signed into law and it would appear were not scrutinised by the Scottish Parliament, will make far reaching changes to a number of areas of Scottish civil law in relation to construction products and, in particular, cladding.
The new liability appears to be targeted at manufacturers who might be accused of making false or misleading statements about the suitability of their products for a particular purpose (e.g. claims about a cladding panel's combustibility). However, one could see a situation where a design professional or contractor is also argued to have made a 'misleading statement' by specifying a particular product for a particular purpose.
This is less of an issue in England & Wales where the Defective Premises Act 1972 already provides for such liability between home owners and those involved in designing and building new homes. However, in Scotland, where the Defective Premises Act does not apply, this argument could be raised and, at the very least, is a possibility which deserved rigorous parliamentary scrutiny and industry consultation before being passed into law.
Time limits
In addition to this retrospective imposition of a new form of liability, the Act will retrospectively increase the time limits for claims to be pursued. This will be achieved by inserting new sections into the Limitation Act 1980 in England & Wales and its Scottish equivalent, the Prescription and Limitation (Scotland) Act 1973.
The new time limits will commence when the building is, or was, completed and run for 15 years for general construction products. This is increased to 30 years for cladding products on projects which completed before the Act comes into force.
Human rights concerns?
Retrospective imposition of duties or liabilities will naturally come with concern over procedural fairness and parties' rights under the European Convention on Human Rights. However, UK statutes are legally able to impose retrospective civil obligations even if they do breach Convention rights, unlike Acts of the Scottish Parliament. Indeed, the Building Safety Bill already proposes to do so in England and Wales by retrospectively increasing the limitation period under the Defective Premises Act 1972 from six to 30 years, allowing many more current owners of residential buildings with defective cladding to bring claims against the builders or designers of those dwellings.
Nevertheless, the drafters of this amendment were clearly concerned about this argument and included a clause stipulating that a court must dismiss any action that would previously have been time barred if necessary to avoid a breach of a defendant's ECHR rights. This appears to leave it open to the courts to decide if the legislation complies with human rights laws, which in itself could lead to litigation.
This clause would not affect application of the proposed clauses to future projects, so the significant changes outlined above would remain.
Significant change - increased litigation?
These additions to the Act were only put forward in February and March and it is not clear what, if any, consultation there was with stakeholders and their insurers, or indeed, consideration of the impact on devolved areas of Scots Law.
The UK Government is yet to confirm commencement dates for the various sections of the Act, but very significant change is around the corner and litigation, as parties seek out the limits of these novel provisions, is likely to follow.
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