The recently enacted Building Safety Act 2022 (the “Act”) makes large changes to the law in England and Wales in relation to construction projects, health and safety regulation and leaseholder rights. Whilst many aspects of the Act do not extend to Scotland, some do and their impact is likely to be significant. This Law-Now provides an overview of the Act’s impact on the Scottish legal landscape. For a more general overview of the Act please see our earlier Law-Nows here and here.
Construction product liability
The most notable impact of the Act in Scotland is the introduction of new rights of action in relation to construction products. These rights are contained in sections 148 and 149 of the Act and are given effect in Scotland by section 151. Both sections have been given lengthy prescription periods and section 149 also applies retrospectively, meaning that it imposes liability for past acts committed long before the Act was passed.
These sections impose liability to pay damages for personal injury, damage to property or economic loss where a number of conditions are satisfied (referred to as Conditions A to D). The conditions can be summarised as imposing liability on persons who:
fail to comply with certain statutory requirements for a construction product;
make a misleading statement in relation to a construction product; or
manufacture a product which is inherently defective,
in circumstances where the product in question is has been used in the construction of a relevant building and has caused the relevant building to be unfit for habitation. The term “unfit for habitation” comes from the Defective Premises Act 1972 and will be familiar to those operating in England and Wales where that Act applies, whereas the term is a new category under Scottish law.
Some of those liable will have no contractual link with the claiming party (for example a homeowner who claims against a manufacturer) and so these sections significantly extend the range of people who can bring claims in relation to the three failings listed in paragraphs (i) to (iii) above. The usual arguments, related to economic loss not being recoverable in such situations (i.e. in delict) will not assist as the Act specifically provides for this to be recovered.
The Act also amends the Prescription and Limitation (Scotland) Act 1973 (the “Prescription Act”), increasing the period of prescription so that:
any action relating to liability for construction products under section 148 can be brought up to 15 years after the date on which the right of action accrued, being either: (i) the construction of the building is completed, if the works relate to the construction itself or (ii) the completion of works, where these do not relate to the construction of the building;
any action relating to cladding products under section 149 can be brought (i) on a retrospective basis up to 30 years from the date on which the right of action accrued if this was before the commencement date of the Act and (ii) up to 15 years from the date on which the right of action accrued if this was on or after the commencement date of the Act.
These extended and retrospective prescription periods are of possibly greater significance in Scotland than in England, given the general negative prescriptive period in Scotland is 5 years. This compares with what is often a 12-year limitation period in England where a contract has been executed as a deed. The introduction of such a lengthy prescription period in Scotland is also notable for the fact that it comes amidst current reforms to the Prescription Act, some provisions of which are now in force with the remaining provisions coming into force in 2025 (for our Law-Now on these reforms please see here).
We will have to wait and see how these new rights of action impact the construction industry in Scotland. Will there be greater scrutiny of claims in marketing materials, for example? Businesses providing and installing construction products, particularly cladding products, will need to consider how to protect themselves moving forward, including considering quality control, paper trails of decisions on materials, checking performance of materials and how to handle supply chains. Although the biggest concern will be around backward-looking claims for long-completed buildings.
Other applicable provisions
There are other, less wide ranging, aspects of the Act which are applicable in Scotland. This includes the establishment of the new homes ombudsman scheme, which allows for a new forum for complaints against members of the scheme (which is open to all developers) by relevant persons, which will be investigated and determined by an independent ombudsman.
The Act also makes amendments to the Architects Act 1997, including setting out amendments to the Architects Registration Board particularly with regard to discipline, continuing professional development and appeal committees. In addition, amendments are made to the Health and Safety at Work etc Act 1974 This includes, but is not limited to, amendments to the definition and role of building safety regulator with regard to the Building Advisory Committee and the powers of the Executive. Both of these amendments extend to Scotland.
Finally, the Act confers powers on the UK Government to make regulations applicable to Scotland governing the supply and marketing of construction products. This will be highly relevant to the new rights of action under sections 148 and 149 discussed above.
In short, despite the limited attention given to the applicability of the Act in Scotland prior to it receiving Royal Assent, there are some wide ranging effects which reach north of the border. These extend both to liability and the applicable prescriptive periods with regard to construction products fitted or installed in Scotland.