Choppy waters ahead? The future of product safety post-Brexit

The UK has one of the strongest product safety systems in the world, underpinned by product safety legislation that regulates how safe products are supplied and sold, by placing legal obligations on those in the supply chain.

“From online marketplaces to connected devices, the way we buy products and the products themselves have gone through huge changes in the last few decades and the pace of change is increasing. It is essential regulation keeps pace with rapidly advancing technology and innovation, and evolving models of supply, to ensure people are protected and businesses are supported to invest and grow.”[1]

This body of law is extensive and complex but, more importantly, has recently been affected by our departure from the European Union. In this article, we consider the key changes, the implications for businesses and what the future holds for product safety regulation.

What are the relevant duties?

There are a whole raft of duties that cover product safety, including:

• Section 6 of the Health and Safety at Work etc Act 1974 (HSWA). This places a general health and safety obligation on anyone in the supply chain, so far as reasonably practicable, for when articles for use at work are being used, set, cleaned or maintained. This obligation includes providing information and instructions on safe use, including any subsequent revisions to that information, and testing/examination necessary to ensure compliance.
• Consumer Protection Act 1987 (CPA). This is in place to hold manufacturers accountable for producing unsafe goods. It allows consumers to claim compensation if the defective product has caused personal injury, damage to property or death.

• General Product Safety Regulations 2005 (GSPR). These Regulations provide the basis for ensuring the safety of consumer goods by setting requirements and providing a range of provisions to secure compliance and enforcement with the requirements.
• Product Safety and Metrology etc (Amendment etc.) (EU exit) Regulations 2019. These are discussed below.

What has changed post-Brexit?

The Product Safety and Metrology etc (Amendment etc.) (EU exit) Regulations 2019[2] came into force at the end of December 2020, amending an array of sectoral product safety laws as well as the CPA and GPSR.

The main changes are[3]:

• From January 2021, the UK will be classified as a non-EU country (a “third country”) and will no longer fall within the EU product compliance regime.
• Distributors importing products from the EU will become “importers” of products into the UK and will be held liable as “producers” for personal injury or property damage arising from any unsafe products that they supply in the UK.
• The definition of “producers” will change to cover UK manufacturers of products or “a person established in the UK that places a product from outside the UK on the market”.
• The current EU CE marking system will no longer apply in the UK. The UK Conformity Assessed (UKCA) marking system will be the new UK product marking used for those goods being placed on the UK market which previously required a CE mark.

A new marking system

The UKCA marking came into effect on 1 January 2021. However, to allow businesses time to adjust to the new requirements, they will still be able to use the CE marking until 1 January 2022 in most cases.

Businesses only need to use the new UKCA marking before 1 January 2022 if the product:

• is for the UK market;
• is covered by legislation which requires the UKCA marking;
• requires mandatory third-party conformity assessment; and
• a conformity assessment has been carried out by a UK conformity assessment body .

The UKCA will follow broadly the same principles as the current CE marking system, but with the safety and compliance standards, authorised representative/responsible person and notified body requirements all now being valid for the UK only.

Importantly, the UKCA mark will not be recognised in the EU, therefore any products which require CE marking and which are sold in both areas will need to comply with both marking regimes. Similarly, the CE marking is only valid in the UK for areas where UK and EU rules remain the same.

It should be noted that those businesses exclusively exporting products from the UK to the EU will only be required to use the CE marking and not the UKCA marking also.

What about existing stock?

The UKCA marking does not apply to existing stock, i.e. products manufactured and ready to place on the market before 1st January 2021. This means that the CE marking on products manufactured and ready to place on the market before 1st January 2021 will still be valid. 

The Government has clarified that CE marking will be accepted in the UK until 1 January 2022 for some products including those with a certificate of conformity from an EU-recognized notified body or pre-existing stock. If the item was fully manufactured, CE marked and ready to place on the market before 1 January 2021, there is no requirement to use the UKCA marking even if the certification was carried out by a UK-based body. These goods will only be able to be placed on the UK market until 31 December 2021[4], after which point the UKCA marking will need to be used. 

In all cases businesses must be ready to use the UKCA marking from 1^st January 2022 at the latest[5]. Products will be able to display both the UKCA mark and the CE logo unless and until the rules for those products diverge between the UK and EU. However, it would be prudent to look to use the UKCA marking as soon as possible, unless that business is purely exporting products to the EU and is not placing those items on the UK market.

What does this mean for businesses?

The above changes are set to have significant implications for manufacturers and distributors, with no real sense as yet of the future practical implications.

What we can say so far is that UK distributors, soon to be defined as importers or producers,  importing products from the EU will, effectively, take a step “up the chain” in terms of responsibilities and liabilities and will be responsible for ensuring that the producer (outside of the UK) has complied with its obligations.

Distributors will be required to display their name, address and a product reference on products supplied to the UK. The requirement to label or re-label products is likely to put additional demands on the resources of a business, both in terms of time and money. Newly defined importers and producers will also be responsible for ensuring that only safe products are placed on the UK market, and that the other producer obligations have been complied with.

With the UK now being classified as a “third country”, this is likely to have an impact on the status of the economic operators (i.e. which entity is deemed the "manufacturer", "importer" or "distributor") in a supply chain which involves the UK.  This is important because under both the EU regulatory regime and the new UK regulatory regime, each economic operator will have different regulatory obligations placed upon them depending on whether they are deemed to be the "manufacturer", "importer" or "distributor".  These responsibilities cannot be delegated to entities outside of the UK (including the EU).

As the “due diligence defence” is the primary defence available to any business which finds itself subject to enforcement action in this area, any business importing products into the UK or selling a product from outside the UK will need to review and consider enhancing its own due diligence processes to ensure it can demonstrate compliance and appropriate risk controls in the UK.

Prepare, prepare, prepare!

The above changes mean significant costs for businesses. An impact assessment[6] has calculated that between 10,000 and 17,000 UK manufacturers and up to 135,000 UK wholesalers and retailers will be impacted, with an estimated cost to business over a 10-year period of £25.7 million for conformity marking, £3.7 million for conformity assessment and £6.6 million for familiarisation—a total of around £36 million. We are likely to witness confusion in the marketplace – particularly for businesses operating in both the UK and the EU.

The changes will also result in increased responsibilities and liabilities, which means that businesses may be more susceptible to investigation by the UK enforcing authorities, and to criminal prosecution and liability, in relation to goods imported.

Prior to the changes discussed above, placing an unsafe product on the market was a criminal offence under the GPSR[7]. As the offence is one of strict liability, a company would commit an offence as soon as the unsafe product was placed on the market, regardless of whether the company knew the product was unsafe at that stage and regardless of any steps that the company may have taken after discovering the safety issue.  

Looking to the future, failure to ensure a product is correctly UKCA marked could result in an unlimited fine or imprisonment of up to 2 years. Enforcement action can also result in customs delays, product seizure, stop notices and enforced product recalls. As we enter unchartered territory outside membership of the EU, businesses are advised to familiarise themselves with the changes and check their product liability insurance, to ensure they can navigate potentially choppy waters ahead.

If you would like to discuss any aspect of this article further, please get in touch with a member of our team at sheregulatory@clydeco.com.