Last week, on 1 October, the HSE’s Fee For Intervention scheme went live, entitling the HSE to recover their costs of carrying out investigations and basic enforcement activity from organisations deemed by the HSE to be in contravention of Health and Safety (H&S) legislation. At the same time, another less well publicised but in many respects more important change took place in the criminal costs landscape.

The position prior to 1 October, which had prevailed for a number of years despite a previous attempt by the then Lord Chancellor to undermine it, was that all individuals and organisations prosecuted for H&S offences (including corporate manslaughter, individual gross negligence manslaughter, and breaches of HSWA and H&S Regulations) would be entitled to recover their reasonable legal costs from Central Funds in the event they were successful in defending themselves at trial or the prosecution was abandoned for some other reason. In light of the evidentially complex nature of many H&S cases and what is at stake for defendants, defence costs in these cases can often be substantial. Although recovery would often be much reduced if defence lawyers were adjudged to have incurred too high a level of costs, the level of Kennedys H&S Team’s recoveries regularly exceeded 95 per cent.

As a result of the recent change, however:

  • Any organisation prosecuted for H&S offences after 1 October will be unable to recover any of its own legal costs, regardless of whether it mounts a successful defence.
  • Any individual prosecuted for H&S offences after 1 October will be unable to recover any of his/her own legal costs, unless the prosecution fails while still in the Magistrates’ Court or on appeal from the Magistrates’ Court to the Crown Court. Even in these relatively rare scenarios, the innocent individual’s costs recovery will be capped at Legal Aid rates (around £50 per hour).

The implications of this change are concerning and manifold.

For example, without the benefit of a comprehensive insurance programme relatively small or cash-poor organisations will now be faced with the "option" of either trying to find the funds to pay experienced defence lawyers from cash or capital, with no hope of recovering these costs, or simply admitting guilt, suffering the commercial and reputational impact of a criminal conviction and risking the imposition of increasingly hefty fines and prosecution costs.

For individuals the situation is equally if not more concerning. In circumstances where insurance cover for individuals is often only granted as part of a sophisticated insurance programme, and even then just for directors and other senior managers, many individuals prosecuted for H&S offences are likely to find themselves without the means to pay for experienced defence lawyers. Those who do have the means to pay will not be entitled to recover their costs if and when they are successful in defending themselves, and those few who qualify for full or partial Legal Aid will be compelled to use a Legal Aid law firm, none of whom are able to marshal the same level of H&S expertise and resource as firms with specialist teams like ours.

In order to protect our clients' interests to the fullest extent possible, and to seek to redress as far as we can a balance which has shifted unfairly against companies and individuals trying their best in tough times, our H&S Team will be exploring a number of options over the coming months. These will include:

  • Bolstering public interest arguments to dissuade certain prosecutions
  • Making more use of wasted costs applications against the authorities
  • Continuing to offer as efficient and affordable service as possible

For their part, organisations should review their insurance cover to make sure that adequate provision is made for defence costs; for the company, its management and other staff.

The Government’s "double whammy" of increasing HSE costs recovery from companies while at the same time barring the recovery of defence costs by those who are wrongly prosecuted for H&S offences, may come as a heavy blow to a number of organisations. As we have mentioned, we will be taking steps to try to mitigate the effect on our clients and clients themselves can explore ways of protecting themselves. However, the fact remains that with these changes a substantial proportion of the costs of misconceived or otherwise unmerited H&S investigations and prosecutions will shift from the public purse to the pockets of innocent organisations and individuals.