Product Liability: looking ahead to 2021

In brief

• New Product Safety Regulations widen the scope of liability in respect of those who import products from anywhere outside of the United Kingdom (including from EU27 States);

• Potential claims and risks arising from fast-tracked Covid products;

• Post-Brexit supply chain disruption may have product liability implications; and

• Increased regulation of construction products under the Building Safety Bill.

New Product Safety Regulation

The (recently amended) Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019 (the Regulations) will apply if there is no Brexit deal. Their objective is to ensure that there is no reduction in product safety or consumer protection as a result of the United Kingdom's exit from the European Union.

The substantive law relating to product safety (under the Consumer Protection Act 1987) will continue to apply as before. However, amendments to legislation in the field of product safety are necessary in order to remove or amend references to EU legislation from UK legislation, and indeed revoke measures which will no longer be required.

In addition, certain changes have been made to the Consumer Protection Act 1987 which may (for example) increase the potential liability exposure of a UK based importer of goods; if that UK based importer brings into the UK from a Member State a 'defective' product, it could be held liable by a consumer (as opposed to just the manufacturer based in the relevant Member State).

The Regulations also create an independent regime in the UK for checking that products meet safety requirements, as well as a framework for UK marking, by which a manufacturer indicates that the product conforms with the requirements set out in the relevant enactment(s).

COVID and Brexit related product risks

The European Medicines Agency and the MHRA have recently eased rules during the COVID pandemic in order to (for example) facilitate the mass production of PPE and/or fast-track the approval process for vaccines.  As manufacturers have been under pressure to meet medical needs, it is possible that some could face allegations of breaching product safety regulations if any injuries result.

Current English law still adopts a 'holistic' approach to product safety/defect, so to the extent that benefits generally outweigh any risks in this scenario it is possible that no liability will attach. It may also be possible that the 'development risks' defence could be relied upon by manufacturers in light of the complex (and certainly in the early stages, misunderstood) nature of COVID. However, each matter would inevitably be considered on a case by case basis and the outcome shall depend on the product and alleged defect in question.

As 2021 approaches, a further consideration for product manufacturers and distributors is the potential impact of disruption to supply chains in a 'no deal' post-Brexit environment.  Where contractual requirements and deadlines force the use of alternative components and products, possibly in unfamiliar combinations or environments, we may see issues arising. Any alternative 'product sourcing' from less-regulated territories may also create risks as, depending on their nature, substituted products can run the risk of being of inferior quality and/or not meeting the relevant specification(s). 

Construction products

The current regulatory framework for construction products derives from EU law (the Construction Products Regulation 2011 (EU No 305/2011) and the Construction Products Regulations 2013 (SI 2013/1387)), with  Trading Standards being the UK's enforcement authority.

Once law, the draft Building Safety Bill will bring increased regulation of construction products placed on the UK market. The Bill, currently subject to the pre-legislative process, is designed to improve safety for, in particular, residential high-rise buildings. There will be powers to withdraw products from the market if they present a building safety risk, focussing on "safety critical products", with enforcement powers for the Secretary of State, including scope for the creation of civil penalties and criminal offences for breach of the new regulations.

Turning again to the potential impact of supply chain issues, depending on the precise point in time at which substituted construction products are identified as being inferior and/or 'defective', end users (such as homeowners), may have claims under consumer protection legislation.  As mentioned above, where the products have been imported from outside of the United Kingdom, the new Regulations dictate that an economic operator/UK distributor could now be liable under the Consumer Protection Act.

What this means for you

• Additional claims could be advanced against UK-based importers of products from Member States, who should therefore be aware of potential increased exposures and assess whether adequate product liability/recall insurance is in place;

• Any manufacturers of PPE/face masks, or equipment which protects against airborne viral particles, should be prepared for potential issues that could arise if any third party injury or losses are sustained;

• The pressure of COVID and post-Brexit supply chains may create increased product liability risk(s), potentially affecting all product lines using imported components; and 

• Manufacturers, importers and users of construction products, particularly on higher risk residential projects, will need to follow closely the progress of the Building Safety Bill.