HSE to make cost recovery dispute process “fully independent”

The scheme, Fee for Intervention (FFI) was introduced in October 2012 to shift the cost of regulating workplace health and safety from the public purse to businesses which break the law and ensures the cost burden of HSE intervention is picked up by those companies and not taxpayers.

If an inspector identifies serious health and safety failings in the workplace about which they need to write to the dutyholder, then that dutyholder has to pay the costs of the HSE visit. If the inspector simply issues verbal advice there is no charge. If there is disagreement on HSE’s decision the dutyholder can dispute it.

Until now, disputes were considered by a panel which consisted of two members from HSE and one independent person. However, after reviewing the current process HSE will consult with relevant stakeholders with a view to making the process fully independent.

So this week I thought I would look again at FFI in light of the HSE’s proposals.

This week’s 2 recent HSE case look at:

• An employee was injured when the door’s roller barrel fell on him resulting in three cracked ribs and a damaged spleen, causing him to miss eight weeks of work.
• Philip Locke carried out work on a boiler in 2013 without being registered, faults were later found with the boiler.

As ever, if you have a subject that you would like us to cover one week, please contact us by phone 01458 253682, email or via our Facebook page or by Twitter.

HSE Costs Recovery: fees for intervention

The idea of HSE inspectors charging for ‘their services’ has caused consternation from many industry representatives. The government sees it as a cost saving scheme, but its effects have been considered by some, as a change in the way in which health and safety is policed in this country.

So how does it work?

Put simply, these Regulations place a duty on the HSE to recover costs where duty holders are found to be in material breach of health and safety law. If there has been a material breach that has resulted in the HSE having to formally request rectification in writing (e.g. by way of an enforcement notice, email or letter), the HSE will be able to recover all of the costs of that intervention up until the involvement of court time.

“Technical breaches” that do not elicit a written response by the HSE – such as the failure to display a health and safety poster – will not fall within the scope of the new Regulations.

The ideas behind this were twofold; One was that this would shift the costs associated with a breach of health and safety law from the taxpayer back to the duty holders.

The second was that the threat of costs recovery would act as an effective deterrent to those who would otherwise fail to meet their obligations.

Whilst most people agree that the HSE should be able to recover its costs and that the “Guilty Party” should be the one paying, Concerns have been raised including:

• The HSE potentially changing its priorities to maximise its income;
• The possible harm to the constructive relationship between the HSE and businesses;
• The definition of “material breach” and reliance on “inspector’s opinion” or judgement;
• The trigger for FFI being a letter dealing with a material breach;
• The financial impact on businesses, particularly SMEs; and
• The integrity and transparency of the disputes process.

So what constitutes a ‘Material Breach’?

A “material breach” will arise where a requirement to rectify a breach stimulates inspectors to commit themselves to paper, covering anything from a letter, email, visit report, notice or prosecution. This wide definition is an obvious cause of concern for many, because it creates an early trigger for fees to start accruing and worries about the risk of inconsistency in approach by inspectors from different areas and industries.

What is the Cost of any ‘Material Breach’?

The original fee that was proposed was ￡133 per hour but was actually introduced at ￡124 per hour which has since been increased to ￡129 per hour, of course Plus VAT

This is of particular concern to smaller enterprises, as it is proposed that the scheme will impose a legal duty on the HSE to recover costs, giving them very limited discretion over whether to apply the fee or not, whatever the resources of the organisation being inspected

In deed enquiries, have shown that that an inspection resulting in a letter will cost the duty holder approximately ￡750, an inspection resulting in an Enforcement Notice will lead to costs of approximately ￡1,500 and, in extreme cases, an investigation may impose fees on the duty holder that go into the tens of thousands of pounds. The HSE issue invoices to duty holders on a monthly basis as costs are incurred, with the expectation that payment will be made within 30 days. There is currently no option for duty holders to pay by instalments. If fees are not paid, the HSE will be under an obligation to take enforcement action.

Enforcement action will, as reported in previous newsletters, result in the courts issuing fines that are now based on your company’s turnover, so much higher than previously

Appeal process

Those who believe they have been unfairly charged under these Regulations have the opportunity to appeal against the fees.

The primary review will be undertaken by an HSE senior manager and only if the appeal remains unresolved will it continue to a second review. This will be heard by a panel, consisting of senior HSE staff alongside an external business representative. Where an appeal is upheld, it is proposed that the costs will be offset against any outstanding invoice or refunded in full.

Should the challenge prove unsuccessful, the HSE will recover their costs of this appeal from the duty holder. This again has caused disquiet, as it is likely to have the effect of deterring duty holders from disputing the recovery of fees.

However, after reviewing the current process HSE will consult with relevant stakeholders with a view to making the process fully independent

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