Regulation

Regulation of construction products and materials

While the regulation of construction products and materials is of the utmost importance for fire safety reasons, there are also other requirements that need to be met including structural strength, toxicity, carbon and energy efficiency. The term 'construction products' is broad and can encompass all forms from the raw material itself, to a basic product, to a component and eventually a system. Similarly, regulation needs to cover the whole journey starting with product development through to product selection and specification, storage and handling, assembly and installation and finally, maintenance and operation. The task of reform is therefore complex.

Under the Building Regulations 2010, building work must be carried out with 'adequate and proper materials which … are appropriate for the circumstances in which they are used … and … used … so as adequately to perform the functions for which they are designed'.  Further statutory guidance is provided in the Approved Documents.  Individual products are regulated by the Construction Products Regulations (CPR) but these only cover products for which there is a designated standard – thought to be about one-third of all construction products in manufacture. 

Building Safety Act 2022

The linchpin to legislative reform of building safety has been the Building Safety Act (BSA) which was enacted on 28 April 2022. The purpose of the BSA was to put in place new and enhanced regulatory regimes for building safety and construction products, and to ensure residents have a stronger voice in the system. 

Schedule 11 of the BSA gives the government wide-ranging powers to make regulations concerning the marketing and supply of construction products in the UK including provisions relating to designated standards and technical assessments for construction products.  This secondary legislation is expected to extend coverage so that all construction products marketed in the UK fall under a regulatory regime. A new general safety requirement is introduced and a new classification of 'safety-critical products'. Enforcement powers are strengthened and the BSA paves the way for a new national regulator for construction products within the Office for Product Safety and Standards (OPSS) to be set up.

Part 5 of the BSA also imposes new liabilities on the manufacturers and suppliers of construction products and cladding products. The limitation periods for these new liabilities will be 15 years and for past defects in respect of cladding products where the right of action accrued prior to the commencement of the BSA, 30 years. In addition, the Secretary of State is given power to make regulations providing for costs contribution orders to be made against a defaulter who fails to comply with a construction product requirement. There is also power to block product manufacturers from the market using a business industry scheme. 

With vast sums being spent on remediation costs, it is expected that those paying out will be eyeing up any potential avenues for recovery and construction product manufacturers and suppliers can expect to be in the firing line for future claims. Indeed, as Giles Tagg, a construction and professional liability partner at DAC Beachcroft, notes: "Sections 148 and 149 of the BSA are specifically designed to facilitate claims against manufacturers based on new statutory grounds and it will be interesting to see how the judiciary gives voice to these provisions." 

Prior to the BSA coming into force, a timeline was published setting out how the government envisaged the reforms would be brought into force.  Many of those stages can now be ticked off but not all have been met. Additional powers for the regulation of construction products were to be introduced in the first 12 months, and new requirements for products to be safe and strengthened powers to be used by the national regulator of construction products were to be introduced between 12 to 18 months from Royal Assent, i.e. by the end of October 2023. This has not happened.

Where are we now?

In addition to the Hackitt Review which recommended that industry and the government must ensure construction products are properly tested, certified, labelled and marketed, we have also had the findings of the Grenfell Tower Inquiry. Sir Martin Moore-Bick concluded in his Phase1 Report (2019) that 'there was compelling evidence that the external walls of the building failed to comply with … the Building Regulations'. Construction products were implicated as a reason for the rapid spread of the fire whether that be because they were inappropriately selected, wrongly installed, failed to perform as they should have done or should not have been approved for use in the first place. This was an issue reviewed in Phase 2 of the Inquiry and the subject of recommendations in the GTI Report.

In April 2021 the government commissioned an independent review of the system for testing and certifying construction products. The detailed and comprehensive report produced by Paul Morrell OBE and Anneliese Day KC identifies gaps and weaknesses in the current system and makes wide-ranging recommendations.

The urgent need for improvements is clearly voiced by Dame Judith Hackitt in the Foreword to the Review when she states: 'We must move from a state where up to two-thirds of products are unregulated, there is a lack of clarity around purpose of testing, the fitness for purpose of current standards is questioned and there is no enforcement to implement a process that delivers quality and confidence'.

Despite the lapse of over a year since the report was published on 20 April 2023, there has yet to be a formal government response. There has of course been a change in government in the interim. "Although construction in the context of house-building targets and building on the 'grey belt' featured heavily in Labour's pre-election speeches, there was no mention of the Building Regulations or construction products. With the recent fire in Dagenham and the release of the Grenfell Report it is highly likely that the issues of Building Safety will come to the fore again," says Mark Roach, Head of Construction at DAC Beachcroft.

This view is corroborated by the Ministerial Statement made on 2 September 2024 which reiterated that construction products must be safe and that 'the system that oversees them remains inadequate'. It acknowledges the need for a system-wide reform of the construction products regulatory regime which will need to take into account the recommendations from the GTI Report. 

An industry response to some of the recommendations made in the Morrell and Day review has been published by the Construction Leadership Council (CLC). The CLC acknowledges that the report spells out in clear detail the complexity and the challenges that have developed in the products sector and considers that they have done the industry 'a great favour in producing a body of work that can be seen as a watershed moment for the future of the construction products sector'. The CLC highlight that the secondary legislation regarding products is urgently needed and, at a minimum, a timetable or plan for the roll-out should be published which would at least allow the industry to plan.

Construction product marking

A key area flagged by the CLC for urgent action is the CE/CA mark issue which the CLC states is currently 'affecting investment, costs, jobs, productivity and the health of the product sector'. There has been uncertainty on this point since Brexit.  Initially, the government decided to replace the European CE standard and move to a United Kingdom Conformity Assessed (UKCA) product marking system from 1 January 2022. In response to industry pressure, the government agreed to allow the CE marking to be used alongside the UKCA in products being sold in the UK up until 30 June 2025. In August 2023, the government announced that it was extending indefinitely the use of CE marking in products made in the UK. Although construction products were initially excluded, the Ministerial Statement on 2 September 2024 announced that the government will extend the period of recognition of CE marking for construction products. Having listened to the findings from the Morrell and Day review of the construction products testing regime, it is accepted that there is currently insufficient testing and certification capacity in the UK were CE recognition to end and that it  would negatively affect the supply of products that meet recognised standards. No end date is given for the extension but it is confirmed that any subsequent changes would be subject to a minimum two-year transitional period.

Whether the new government will make the use of the UKCA marking scheme mandatory remains to be seen.  The King's Speech delivered on 17 July 2024 announced a new Product Safety and Metrology Bill which will allow the UK to mirror or diverge from updated EU rules to encourage growth. The Product Regulation and Metrology Bill was duly published in September 2024. Stephen Turner, Legal Director and specialist in product safety issues at DAC Beachcroft, comments: "This Bill promises an updated product safety regime and addresses emerging risks. It is to be welcomed by insurers and the businesses they insure." However, it is not yet clear how, if at all, the Bill will impact the regulation of construction products.

Regulator

A way for the government to deal with the issues surrounding Building Regulations and construction products is via the Building Safety Regulator (BSR).  There may be some reluctance to add to the  BSR's workload given what has happened previously.  Key changes from the BSA were to be introduced in April 2024 and this was delayed by a number of months due to the lack of qualified individuals and problems with accreditations for Approved Inspectors.  Given these problems with the BSR, there may well be some reluctance for the BSR to be the regulator on yet further issues.

The government will also need to give consideration to the recommendation in the GTI Report that the construction industry should be regulated by a single independent body reporting to a single Secretary of State.

Building Regulations

Building Regulations need to change. "Historically there has been a problem with Building Standards and Regulations not being updated.   It has always been known that British Standards / Eurocodes are effectively best practice in the industry and have a general application.  However, if the use of AI continues and new and modern methods of construction and advances in materials are not kept abreast of by the regulators, there will always be a gap between best practice and Standards…", says Mark Roach.

On the horizon

We still do not know when the new construction product regulations will be published, and it is still unclear what form those regulations will take.  However, the government will need to act.  As we have set out above, the issues with Building Regulations and construction products were on the previous government's agenda and were to form part of its Building Safety Act programme to make future buildings safe.  The current government has also signified an intention to move the UK closer to the EU to solve some of the issues arising from Brexit.  Having said that, we consider that it is unlikely that the UK will follow the EU on construction products given the different regulatory regimes and the current crises concerning unsafe buildings.

In any event, we expect to see product manufacturers and suppliers targeted by both the government and others in the construction chain to contribute to the costs of putting right those buildings which have been adversely affected by the use of their products.  Even on the government's own statistics, around 1,400 buildings still have unsafe cladding that needs to be removed.  In that regard it is also worth noting that the government has stopped reporting on how much is left in the Building Safety Fund to help pay for these works, where there are no parties to step in and pay.  Simon Mathews, construction and professional liability partner at DAC Beachcroft, notes that: "As part of the wider economic situation and the balance the government is trying to strike with not raising taxes, it seems likely that in the relatively near future there will be a focus on recovering significant costs already paid by the Building Safety Fund.  This will encourage parties to consider claims against product manufacturers involved in the supply of unsafe products."

With major reform pending, building safety and cladding issues will take many years to resolve.