New U.K. recall regulator for ‘white goods’

The Office for Product Safety and Standards (OPSS) was set up on 21 January as part of the government’s response to the Working Group on Product Recalls and Safety, which was established in late 2016 to examine and implement recommendations made by consumer rights champion Lynn Faulds Wood in her independent review into product recalls, published that February.

The OPSS will be a part of the Department for Business, Energy & Industrial Strategy (BEIS), and will have a budget of around £12 million (U.S.$16.7 million) per year “when fully operational.”

Other actions that the government has committed to pursue in response to the working group’s recommendations include working with the British Standards Institution to provide guidance on product recalls and corrective action and creating an expert panel to bring together trade associations, consumer groups and enforcement agencies to advise on product safety issues. The government has also said that it is researching ways to identify how to drive up the number of consumers registering appliances with manufacturers and is looking at how manufacturers and retailers can improve product marking and identification to aid faster recalls.

The need to set up the OPSS gained fresh impetus in the wake of the London Grenfell Tower fire last June, which killed 71 people and was caused by a faulty refrigerator. A number of other major fires have also been attributed to faults with electrical items: the London Fire Brigade says that nearly one fire a day in the capital involves white goods.

More widely, the government has been concerned about what it considers the “fragmented” nature of the U.K.’s product safety regime for some time, especially as various bodies play a role in providing advice or overseeing compliance. The government is also aware that there has been a heavy reliance on under-resourced local trading standards teams for enforcement of product safety law, and that there has been a lack of a systemic approach to recording and analysing incidents related to defective products in the United Kingdom.

Currently, product safety is the remit of local Trading Standards offices, working with—and financed by—local government, as opposed to central government. The introduction of the OPSS will not change that. Since 2008 manufacturers and local Trading Standards have been able to form “Primary Authority” partnerships, which enable a single local authority to become the point of contact between the regulatory system and the manufacturer—the idea being that problems can be resolved locally.

“If the new body can oversee faster recalls and improve the dissemination of important recall information, this will deliver a real boost for consumer confidence.”
Elaine Chan, Partner, Commercial Litigation Unit, Ward Hadaway

These partnerships, however, were formed when the financial crisis took hold and when successive conservative governments began slashing local government spending as part of their austerity drive.

According to Faulds Wood’s report, such cuts have crippled the effectiveness of Trading Standards offices, which are the main market surveillance authorities (MSAs) for consumer products in the United Kingdom. MSAs (or similar bodies) in other countries (such as the United States, Canada, and Australia) receive funding from central government—and industry pays towards the cost of recalls.

Faulds Wood’s report notes that some Trading Standards offices have seen staffing levels cut by 50 percent, and their budgets by 40 percent, with more cuts to come. Consequently, product safety has become a low priority for many local authorities. Another problem is that recall and notification systems set up by industry bodies often depend on voluntary collaboration as part of “best practice” rather than a legal necessity to do the right thing, so effective oversight—as well as consumer remedy—is lacking.

Just how well the OPSS will resolve some of these issues remains to be seen. The Office does not have any enforcement powers for a start. Its main aim is to help co-ordinate a national response to identify consumer risks and manage responses to large-scale product recalls and repairs by providing scientific and technical support to local authorities on product safety issues. As before, councils will still be in charge of investigating and prosecuting complaints around the safety of non-food items (such as white goods, electrical items, toys, clothes, and cosmetics)—the creation of the OPSS does not mean any changes to their present roles and responsibilities.

The OPSS is also not an umbrella organisation for overseeing all types of product recall: for example, it will not cover vehicles, medicines and medical devices, or workplace equipment, which are already covered by other agencies. It will also not cover construction products, which are currently subject to a separate review following the Grenfell fire and is being led by Dame Judith Hackitt, chair of U.K. manufacturing trade body EEF, and a former chair of the Health and Safety Executive, the U.K.’s safety watchdog.

Lawyers, safety campaigners, and industry experts are largely supportive of the government’s initiative. “Product safety is a key focus of both business and regulators and for that reason this renewed focus is to be welcomed,” says Dominic Watkins, partner at law firm DWF. “The introduction of the OPSS should be welcomed by consumers and businesses alike,” says Farzad Henareh, European vice president at Stericycle Expert Solutions, a consultancy that specialises in product recalls.

Whirlpool slammed over slow product recall

In mid-January, white goods manufacturer Whirlpool was heavily criticised by a committee of Members of Parliament (MPs) over its “woeful” handling of 5.3 million defective tumble dryers—of which more than one million of these potentially dangerous items are still in use in people’s homes.
Parliament’s Business, Energy, and Industrial Strategy (BEIS) committee also criticised the Government for being “painfully slow” in improving general safety standards. The Government has since announced the setting up of the OPSS.
The problem with the defective tumble dryers—sold under the Hotpoint, Creda, and Indesit brands and owned by Whirlpool—was first discovered in 2015 and led to at least 750 fires since 2004 when fluff touched the heating element. But there has been widespread criticism of the company’s handling of the issue in the two years since.
Rachel Reeves, who chairs the committee of MPs, said Whirlpool’s response was “woeful,” adding that the “delayed and dismissive response” to correcting these defects had been “inadequate.”
Whirlpool, however, has described its repair campaign as being “comparatively successful” given that its “voluntarily initiated tumble dryer modification campaign has been the largest corrective action undertaken in the industry in the U.K.,” and at a cost in excess of U.S. $250 million.
In a letter to Reeves dated 20 December 2017, Ian Moverley, the company’s U.K. brand & communications director, said that, as part of its recall and notification programme, it sent out letters to 3.6 million homes across the United Kingdom in November 2015 and 2.4 million reminder letters in September 2016. It also built up a network of 1,500 technicians to carry out safety modifications on products in customers’ homes, and assembled nearly 1,000 call centre staff to deal with queries.
A spokesman for the company said: “Whirlpool’s extensive ongoing tumble dryer modification campaign has achieved a resolution rate more than three times the industry average for a product recall.”
—Neil Hodge

Elaine Chan, partner in the commercial litigation unit at law firm Ward Hadaway, “broadly welcomes” the OPSS. “It suggests a more proactive approach is being taken to enforcing product safety standards,” she says. “If the new body can oversee faster recalls and improve the dissemination of important recall information, this will deliver a real boost for consumer confidence.”

Andrew Masterson, a specialist in product liability and recall issues at law firm Pinsent Masons, also largely welcomes the new body. “A central enforcement body with a remit to handle higher risk general products is an attractive concept, as for general products—including electrical goods—enforcement is spread across local authorities that generally lack the product safety experience and manpower to be pro-active.”

Masterson adds, however, that there are some simple steps that the government should already have put in place as part of OPSS’ remit. “The best way to locate consumers who have bought potentially dangerous products is to force retailers to register peoples’ details at the point of sale so that manufacturers can get in touch quickly if a recall is necessary. This should become a compliance requirement.”

Some experts have their doubts about the new body. Jonathan Compton, a partner at law firm DMH Stallard, says that “the jury is firmly out” on just how effective the OPSS will be. “OPSS jurisdiction excludes food products and is limited to consumer goods that do not have their own specific agencies. I suspect confusion may be the order of the day, at least initially.”

The real problem, says Compton, is the “tiny” annual budget. “I’m unsure what the actual powers of the office are and how and who will enforce them. You can have all the powers in the world, but if you have no police force on the ground to put them into effect, then the powers are toothless.”

Others share Compton’s doubts. The consumer watchdog, Which?, does not believe that the body is powerful enough to meet consumer expectations. Instead, it calls for the introduction of a wholly independent, arms-length body that is a centre of excellence on product safety, with real powers to protect consumers that takes a proactive approach to market surveillance.

“The government has finally accepted that the U.K.’s product safety system needs to be fixed, but this action falls short of the full overhaul it so desperately needs,” says Which? home products and services managing director Alex Neill in a statement. “Consumers need an independent national body [with] real powers to protect them and get dangerous products out of their homes. Failure to do so continues the risk of further tragic consequences.”