Part 5: Other provisions about safety standards, etc. Construction products Section 148: Liability relating to construction products Background
This is a new provision.
	There is evidence that the mis-selling of construction products and the supply of defective construction products have contributed to safety defects in buildings, particularly in multi-occupied residential buildings. When these defects come to light, their remediation can be costly.
	Currently, there is limited recourse against manufacturers of defective or inappropriately marketed construction products, or those in breach of construction product regulations. Often, the possibility of redress to recover costs from manufacturers is limited to a claim for breach of contract, where a contractual relationship exists. However, it will often be the case that there is no relevant contractual relationship in place; for example, the owner of a flat which has been affected by the installation of a defective construction product will not usually have a contractual relationship with the product manufacturer or seller, and so would be unable to use such a route to recover damages for remediation work that is needed.
	In England and Wales, the Defective Premises Act 1972 creates a right to claim compensation in the civil courts for defective work connected with the provision of a dwelling, where the work renders the dwelling not "fit for habitation". Section 134 of this Act expands the scope of the Defective Premises Act to work done to a dwelling beyond its initial completion. However, the duty under the Defective Premises Act only extends to persons taking on work in relation to the dwelling. The duty does not extend to the role that manufacturers or sellers of construction products might play in a building or dwelling being unfit for habitation on completion of the relevant works.
	The new cause of action created by this section will enable claims to be brought against construction product manufacturers and sellers for their role in dwellings being unfit for habitation on completion of the relevant works: if a construction product contributes to or causes a dwelling to be "unfit for habitation" on completion of the relevant works and an individual with a relevant interest incurs a loss as a consequence, then a civil claim can be brought through the courts to recover damages for that loss.
	Damages that can be recovered under this section can include personal injury, damage to property, for example caused by a fire; or economic loss, which could include the costs of remediation.
	This section will apply prospectively, meaning that it will apply to work completed after the commencement of this section, which is two months after Royal Assent (section 170(3)(e)). The limitation period for claims brought under this section is 15 years from when the cause of action accrues.
	The "fit for habitation" test is intended to be equivalent to the test used in the Defective Premises Act 1972 which applies to England and Wales. The Defective Premises Act does not extend to Scotland, but the phrase has a generally understood meaning, which could be used by the Courts in Scotland, together with using the principles in caselaw under the Defective Premises Act as guidance. The same principles could apply should the provisions be extended to Northern Ireland using the power at section 169(7).
Example
A construction product manufacturer makes a statement in marketing materials that a particular product is suitable for use in the construction of high-rise residential buildings. The statement is not true, and the performance of this product meant it was not suitable for such use.
The manufacturer sells this product directly to a contractor who is constructing a high-rise residential building. The contractor relies on the information in the marketing material that the product is suitable for the specific construction project and uses it in that construction project.
On completion of the works, the dwellings in the building are not fit for habitation and to make them fit for habitation costly remediation works would be required.
The leaseholders, who would have to pay for the remediation works, would be able to bring a claim for damages against the manufacturer under this cause of action.