Non-Conforming Products – Building product safety is now everyone’s responsibility

Contract Administration

You might remember a few tragic incidents that took place over the last couple of years where particular cladding types on buildings resulted in catastrophic fires and fatalities?

Not surprisingly, those events caused a great deal of legal concern, and begged the question: who should be responsible for getting this right?

Previously, building laws placed heavy responsibility on installers and building licensees to ensure building products were safe and fit for purpose.

But there was a missing element to that framework: it failed to recognise the roles and responsibilities of other parties in the building product supply chain. After all, there are many participants in the installation of building products, including manufacturers, importers and suppliers all of whom have some role to play towards the safety of building products.

On 1 November 2017, new laws commenced in Queensland (through amendments to the Queensland Building and Construction Commission Act 1991 (Qld) (QBBC Act)) which placed obligations on all participants in the supply chain to ensure that building products are safe and fit for purpose.

The Queensland Building and Construction Commission (QBCC) is now empowered to investigate and respond to incidents of non-conforming building products.

At which point you’re probably asking: what’s a “non-conforming building product”?

These are building products which are not safe for their intended use, do not comply with relevant regulatory provisions or do not perform to the standard they are represented to perform. A product may be considered non-conforming if it does not meet the standards referenced in the National Construction Code for the intended use.

Do the New Laws Apply to You?

The new laws apply to each person in the “chain of responsibility” for a building product, including designers, manufacturers, importers, suppliers and installers.

Liability also extends to executive officers of companies. Executive officers must exercise due diligence to ensure the company complies with its duties under the new laws. If they fail to do so, executive officers may be personally liable for the same penalties for contravention.

What do you Have to Do?

Each person in the chain of responsibility for a building product has a duty:

  1. to ensure that the product is not a non-conforming building product;
  2. to ensure relevant information about the product (such as instructions for use) is provided with the design or product, as applicable;
  3. to not make false or misleading representations about a product’s compliance.

A failure to comply with these duties carries a maximum penalty of $126,150 (based on the current penalty units).

Each person in the chain of responsibility for a building product also has duties to notify the QBCC:

  1. if the person becomes aware, or reasonably suspects, that a building product is a non-conforming building product. That notice must be given within 2 days of becoming aware, or reasonably suspecting, the product’s non-conformance;
  2. if a notifiable incident occurs in relation to a non-conforming building product. That notice must be given as soon as practicable and within 2 days of becoming aware of the incident.
    Failure to give these notices may attract a penalty.

A Practical Example

Frame Co is building a commercial building in Cairns. For this build, they have found an innovative cladding product from South Korea which will provide superior insulation and charge people’s mobile phones automatically through the day.

The only licensed importer of the product into Australia is Clad Co, a company based in Brisbane.

Clad Co recommend that the installation be done by Bruce Smith Builders, who are experienced at installing this innovative product.

During the course of the installation, Frame Co notice during wet weather that some of the cladding appears to sag and be damaged by water on the external face.

Each of:

  1. Clad Co;
  2. Frame Co; and
  3. Bruce Smith Builders,

have obligations as people in the chain of responsibility for the install of the cladding. If the cladding is non-conforming to the relevant standards, each of them will have associated potential liabilities and duties.

Further though, because Frame Co noticed a potential issue, they might reasonably suspect that the cladding was non-conforming, and had a proactive duty to notify the QBCC. Prudence suggests that they might also put the installation on hold until they figured out what was going on for sure.

Impact on innovation

There’s a first time for everything.

However, if you’re involved in the installation of an innovative product, you’re not off the hook.

Ensure that you do your due diligence, because the fact that it’s someone else’s product doesn’t get you off the hook – if you’re somewhere in the chain of responsibility, then you need to be conscious of your obligations along the way.

What you Can Do

First, if you’re involved in the supply chain for products at all, you need to figure out if you’re caught by the non-conforming product provisions.

Next, if you are, or think you might be, then we suggest you take a look at the Code of practice developed by the Department of Housing and Public Works.

Finally, ensure that you’ve put good contract administration processes in place which allow you to identify and respond appropriately to questions of non-conforming building products as your projects unfold.

Not sure if you’re caught by this legislation? Get in touch and we’ll help you out.

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