The Government have decided that the Health and Safety Executive are to be placed under a legal duty to make a cost recovery from duty holders who are found by them to be in material breach of health and safety law. Those operating in high risk industry such as the offshore industry are already subject to a cost recovery scheme and the change in the law will extend that considerably.
Who will this affect?
Health and safety law is enforced by HSE and in certain circumstances by Local Authority inspectors. The proposed cost recovery scheme envisages that only HSE will recover costs. The consultation seeks views on whether or not this should extend to Local Authorities so that might yet change. In practical terms this means that only those sectors inspected by HSE will have to pay for interactions with the enforcement authorities and those inspected by the Local Authorities will not. Local Authority inspectors are responsible for shops, offices, catering, hotels and similar providers of temporary accommodation, many leisure providers, beauticians and others as listed in the Health and Safety (Enforcing Authorities) Regulations 1998. Any industry not listed is likely to fall under the HSE responsibility.
What will it cost?
HSE time will only be charged to an organisation if they are found to be in material breach of health and safety law. Material breach means that the Inspector believes that there has been a sufficiently serious breach to justify an intervention such as a formal letter or enforcement notice. If the inspector finds no breach or a minor breach that does not justify an intervention then there will be no charge.
It is anticipated that the hourly rate for the inspector’s time will be in the region of £133. As a very broad estimate the consultation paper suggests that the cost of an inspection resulting in a formal letter may be £750. If that does not result in improvement such that an enforcement notice is served then that cost may increase to £1500. Should a full investigation take place then the cost is likely to run into thousands and in extreme cases tens of thousands.
In cases that are referred to the Crown Office and Procurator Fiscal Service to consider prosecution the costs stop at the point of referral although that is likely to provide little comfort given the implications of facing criminal charges.
When will an Inspector visit?
The government have tasked HSE with reducing the number of proactive inspections by one third. It is intended that they will achieve this by continuing with proactive inspections only in limited areas where there is perceived to be the highest risk. The current approach to proactive intervention will continue in the offshore industry as will the substantially more onerous cost regime. For other high risk industries such as construction, waste and recycling and high risk manufacturing proactive inspections will continue. For other industries the approach will be to inspect based upon better use of intelligence, or in other words using sources such as complaints and incident reports.
For the majority of organisations this means that there is no need to wait in fear for an unannounced visit from an inspector that could result in service enforcement action plus a substantial invoice.
What if I don’t agree with the invoice or the inspector’s opinion about the breach?
It is envisaged that invoices will be issued monthly during the course of an inspector’s involvement with an organisation and processes are to be put in place to allow the invoices to be queried. HSE do not plan to charge a fee for dealing with queries. Queries are likely to be restricted to questions about the make up of the invoice and whether the time charged is appropriate.
However, if the query cannot be resolved it becomes a dispute. A dispute, as opposed to a query, may also arise where it is not accepted that there has been a material breach or that the inspector’s intervention was necessary. The cost of dealing with the dispute will be charged for over and above the full cost of the invoice if the dispute is not upheld. If the dispute is successful then that time will not be charged for.
The consultation paper does not provide great detail about how the dispute process will work and it does not outline any appeal process. This may be an area that needs to be given greater consideration and is clearly going to be of great importance to organisations likely to be affected by cost recovery.
A point to keep in mind for the future is that if the intervention involves service of an Improvement or Prohibition Notice then in addition to disputing the invoice the duty holder has a right to appeal against the service of the notice to an Employment Tribunal. It is not yet clear how the two processes will operate along side each other.
The government have decided that HSE must make a cost recovery. That is a change that is going to come into force some time around April 2012. The detail of how that scheme is to operate is still under consideration and if you have views or concerns about this then you should make them known now. The consultation remains open until 14 October 2011 and further detail can be found here - http://www.hse.gov.uk/consult/condocs/cd235.htm