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A B C D E F G H I J K L M N O P R S T V W Y

HSE Fee for Intervention: What businesses need to know

HSE Fee for Intervention: What businesses need to know

Monday 10th December 2012

The Health and Safety Executive (HSE) has had its budget cut by 35% and in order to bridge that gap, the Government has imposed a legal duty for the HSE to recover its costs from non compliant businesses from October 2012. The charging scheme is called 'Fee for Intervention' (FFI) and is part of a package of Government measures intended to change the culture of health and safety. The powers given to HSE are intended to shift the cost of health and safety regulation from the public purse to businesses and organisations that break health and safety laws. All businesses, therefore, need to be aware of the changes.

What is FFI?

FFI is a costs recovery mechanism, which from 1 October 2012, has enabled the HSE to be able to recover its investigation and enforcement costs at an hourly rate of £124 from organisations that have duties under the Health and Safety at Work Act 1974 (known as “dutyholders”) when they have committed a “material breach” of health and safety law.

The HSE already charges for some of its work, particularly in high-risk sectors, but FFI extends this to a wider range of sectors.

FFI will be charged for all work that is needed to identify a material breach and all work to ensure that the breach is remedied up to the point where the investigation or enforcement action has been concluded or a prosecution started.

The HSE has calculated the following costs whenever a contravention is found:

  • Inspection resulting in an email or a letter: £750 
  • Inspection resulting in an a notice being issued: £1,500
  • To investigate an incident taking 4 days of a HSE Inspectors time £4,000
  • Full investigation – could be tens of thousands of pounds
  • For multiple contraventions, these charges are likely to be higher, particularly where more than one inspector or a specialist support is needed.

Despite these indicative costs, businesses still have no real certainty as the final FFI figure will only be quantified when the business receives the invoice from the HSE. There is no element of negotiation on the fee that will be charged, nor does there appear to be a cap.

Is there a limit on how much can be charged?

No. FFI charges can only be stopped by one of the two following things taking place:

  1. The contravention(s) being resolved by the time the HSE inspector conducts a follow-up inspection – the time for which you will also be charged for.
  2. When court proceedings are issued following a failure to comply with a HSE enforcement notice. You will still be liable for any billable time up until that point.

FFI does not take into account the size of the organisation nor its ability to pay (the payment term is 30 days from receipt of the invoice), which could have a disproportionate effect on SMEs. And, FFI charges are of course separate from any fines and associated legal costs associated with any charge brought to the business by the HSE.

Will my business be affected by FFI?

  • FFI will apply to all businesses inspected by HSE, except for self-employed people who do not put people at risk by their work.
  • FFI will only apply to HSE interventions taking place on and after 1 October 2012 and where a breach is found that is deemed by an inspector to be “material”.
  • There are various circumstances where FFI does not apply. For example, where a company is being prosecuted and the information has already been laid at court.
  • HSE will not charge FFI where another fee is already payable for some or all of that work (e.g. under COMAH). This will prevent “double-recovery” of fees.

What is a “material breach”?

A material breach is where an Inspector is "of the opinion that there is or has been a contravention of Health and Safety Law that requires him to issue a notice in writing to that effect", therefore a letter, an Improvement or Prohibition Notice or a prosecution

Although inspectors will be required to follow HSE guidance on the application of FFI, it does allow for much subjectivity in the process by relying on the “opinions” of HSE inspectors. There is a risk that businesses could be treated differently.

Relationship between dutyholders and HSE

Businesses may become more reluctant to ask the HSE for “informal” advice on compliance issues for fear of attracting an inspection/investigation which then leads to a FFI.  If a material breach is identified, then any interaction with the HSE is likely to cause tension because of the very real possibility that the inspector’s time will be charged back to the business. 

The HSE would argue that the quicker the response-time of the dutyholder, and the more co-operative they are, the lower the charge is likely to be, and, of course, compliant dutyholders will not incur any fees at all.

Complaints procedure

There are three stages; a "query", a “stage one” appeal and a “stage two” appeal. Not all appeal stages are free. If you query a bill i.e. want to know what it is for and how it has been calculated etc then this will be free. If you wish to progress to a “stage one” appeal this will be reviewed by a HSE senior manager but will be charged at the hourly rate at £124 per hour. If you wish to appeal that decision to a “stage two” appeal, this will two HSE staff and an independent representative but again will be charged at £124 per hour.

If this Appeal is unsuccessful you will have to pay the HSE's time spent in dealing with the dispute at the FFI hourly rate. If the dispute is upheld the HSE will refund any invoices or part invoices that have been paid.

Conclusion

FFI could result in significant costs for a business, and the HSE have already identified a number of difficulties with the scheme, particularly in relation to putting in place a consistent approach by HSE Inspectors on what amounts to a material breach. In reality, Inspectors will come under pressure to recover costs from non compliant organisations and this may trigger more investigations and identified material breaches.

Actions

The best way for businesses to prepare is to ensure their health and safety processes and procedures are water tight and that their employees are well informed about the HSE’s new approach.Managers must be made aware of the need to promptly report the circumstances of any visit by the HSE either by way of a routine inspection or as a consequence of an accident or incident. They must keep careful notes of the circumstances of such inspections in order to be able to be in a position to challenge any suggestion that there has been a material breach and to dispute any invoices received. Consideration should be given as to the training of managers to conduct such inspections and reporting systems should be developed and implemented.