The FCA – Transformation to Assertive Supervision
The Health and Safety Executive (HSE) is currently consulting on changes to the way Fee for Intervention (FFI) disputes are dealt with. The HSE has decided that the time is right to move to a fully independent process for considering disputes in relation to FFI. It is also concerned to ensure that the process is accessible and proportionate.
A recent blog by our colleague Jonathan Grimes revealed the impact that the sentencing guidelines have had on increasing the fines imposed following convictions for health and safety offences. The FFI scheme is yet another cost consideration that operators need to be aware of before they find themselves falling foul of their health and safety obligations.
What is Fee for Intervention (FFI)?
FFI is a costs recovery scheme, under which the HSE can recover the costs of carrying out its regulatory functions from those found to be in material breach of health and safety law.
FFI was introduced in October 2012, after the Health and Safety (Fees) Regulations 2012 imposed a duty on the HSE to recover these costs. The aim is to transfer some of the cost of health and safety regulation from the public to businesses and organisations that break the law. It also incentivises businesses and organisations to prevent or act quickly to remedy any breaches.
The HSE can recover costs under the FFI scheme where an HSE inspector identifies a contravention of health and safety law and determines that the contravention is serious enough to require written notification to the business, or “dutyholder”, involved. A written notification can take the form of a notification of contravention, an improvement or prohibition notice or a prosecution.
Costs can be recovered for reasonable work undertaken by HSE to identify, investigate and oversee the remedy of the breach and to bring any enforcement action; from the start of the investigation or inspection to the point where the HSE’s work in relation to the breach has concluded or a prosecution is started. Subsequent prosecution costs will be recovered through the courts.
The total cost is calculated on a time spent basis at an hourly rate of £129 per hour. Where work is outsourced to the Health and Safety Laboratory (HSL) or third party consultants, the actual cost to the HSE of the service will be recovered.
Current procedure for FFI disputes
Dutyholders must first raise an initial query with the HSE. If they are not satisfied with the HSE’s response, the dispute is then dealt with by a Dispute Panel. The Panel is made up of two HSE senior managers from a different operational division to the one involved in the dispute and an independent person, drawn from a pool of industry and trade union representatives.
The Panel consider the HSE’s response to the initial query, the FFI invoice and the disputed breach and determine whether to confirm, vary or cancel the invoice. This is decided on the papers and there is no right for the duty holder to appear before the Panel.
If the FFI invoice is upheld, the HSE can recover the costs of dealing with the dispute at the FFI rate of £129 per hour.
The Panel’s decision is not binding on the dutyholder and the HSE will need to bring a civil action to compel payment. This gives the dutyholder the opportunity to contest the fees in court but doing so runs the risk of incurring additional costs.
Proposed changes to the FFI disputes procedure
The HSE is consulting on the following proposals:
HSE recognises that businesses need enough information to understand why fees have been incurred and be able to challenge them. The consultation document provides a list of information the HSE considers to be sufficient and where this was not contained in HSE correspondence, HSE will provide dutyholders with a written summary. HSE will also provide dutyholders with a copy of all documents that it intends to put before the panel.
Dutyholders will also be able to provide any other documents or evidence that they want the panel to consider. Disputes will still be determined on the papers, but the new disputes panel will be able to convene a meeting of the stakeholders to clarify points if necessary; although this will not constitute a “hearing”.
It is proposed that disputes are determined by a completely independent panel; comprised of a lawyer, who will act as chair, and two other members with practical experience of health and safety management. They have suggested including a lawyer as many disputes centre on whether there has been a material breach. The Panel will issue a written decision, which the HSE will accept unless it considers the recommendations to be clearly wrong. This is significant as there have long been concerns over the independence and impartiality of the FFI dispute procedure.
The HSE recognises that there is the potential for the costs of a dispute to exceed the contested fees. It invites views as to whether an alternative procedure is required to make the dispute process more accessible in these instances and what it should look like.
Responses must be provided to the HSE by 2 June 2017.
If you are a business or an operator who requires assistance with claims under the FFI scheme or understanding your legal obligations we have a team of Health and Safety lawyers at Kingsley Napley who would be happy to help you.
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