The Health and Safety Executive’s has a new consultation on its plans to recover costs when companies are in breach of H&S regs. Eversheds LLP proposes advice to prepare for and avoid incurring such costs imposed by HSE.
Government policy requires the Health and Safety Executive (HSE) to recover costs for ensuring compliance with health and safety law. To determine how to meet this requirement, HSE has opened a consultation on how to recover costs when intervention is required to rectify breaches of health and safety legislation.
The proposed regulations do not impose any new health and safety requirements on duty holders and duty holders that comply with the law will not be required to pay for HSE activity.
The current proposal places a legal duty on HSE to recover the cost of its intervention activity where there is a material breach of the law. This means that HSE would be obliged to impose a charge if a duty holder was materially breaching the law. Technical breaches, for example, not displaying the Health and Safety at Work Law poster would be exempt from the cost recovery proposition.
A breach is considered to be material if: regulatory intervention is required and the requirement to rectify the breach is made formally in writing. This would include where an Inspector issues a Prohibition Notice or an Improvement Notice but also where the Inspector writes to the duty holder requiring compliance.
The current proposals do not apply to Local Authority enforcement but this is something being considered in the consultation.
Costs incurred by employer
The consultation document proposes a blended hourly rate of £133 for all HSE staff involved in the intervention. The duty holder would pay for all time spent by HSE staff from identification of the material breach until compliance is secured or, if a decision to prosecute is taken, when an information is laid (and the recovery of further costs is sought through the courts).
Potential average costs for intervention are set out in the consultation document which suggests that for an inspection which results in a letter, the fee recovery will be approximately £750 and if it results in a notice, it will cost approximately £1,500.
For an investigation, it is estimated that the average costs HSE will recover will range from approximately £750 to several thousands of pounds, and in extreme cases, tens of thousands of pounds. Given that the industrial manufacturing sector is one which receives significant interest from the HSE, and one in which Eversheds regularly defend a number of clients, this consultation will be of specific interest to you, as your company is likely to be more heavily affected than, for example, an educational establishment.
Once it is deemed the costs are recoverable from the duty holder, HSE will send an invoice (on a monthly basis) and payment will be required within 30 days. The proposal is that queries will be resolved by HSE and the cost of resolving a query will not be charged back to the duty holder. Unresolved queries will be resolved under HSE’s disputes procedure and HSE proposes that duty holders will be charged for the time spent resolving the dispute. However, this cost will be refunded should the dispute be resolved in the duty holder’s favour.
The consultation is open until October 14, 2011 and the cost recovery arrangements proposed could come into force from as early as April 6, 2012.
Free webinar – add comments with no forms
As a leading UK Health and Safety Legal Practice, Eversheds has decided that the consultation is something we should comment upon. The feedback from some of our clients is that they would like to comment on the consultation but simply will not have time to prepare a formal written response. We therefore propose to host a free webinar on 31 August 2011 at 10.30 a.m. to get feedback from our clients on their views on the proposals.
The webinar will open with a 10-minute introduction from Eversheds explaining the consultation in more detail and then a guided discussion of the main areas of contention will explore the main issues. Any clients wanting to have their name acknowledged on our final response document will be able to do so. In this way, we hope to create a time efficient way for your voice to be heard in the consultation.
The main questions are:
Q1. If you do not agree with the proposals outlined in this consultation document for implementing the Government and HSE Board policy of cost recovery please offer reasons for your disagreement and suggest an alternative proposal for delivering cost recovery?
Q3. Do you agree with the extent of the regulatory activity for which HSE would recover its costs? If No on what regulatory activities should HSE recover costs?
Q4. Do you agree with the proposals for when these costs would be incurred? Y/N/ If No please explain the reason for your answer.
Q5. Do you agree with the model used for setting the hourly rates for cost recoverable work?
Q6. HSE will not use cost recovery to drive intervention approaches. Other than clearly stating this policy and the continued application of HSE’s Enforcement Management Model and Enforcement Policy Statement, how else do you think that HSE can reassure duty holders it will not use cost recovery to drive it’s intervention approaches?
Q7. Do you agree with the two level dispute process outlined in this consultation document?
Q11. Are there any costs or benefits not detailed in the impact assessment which HSE needs to consider? Y/N/ please provide any additional details.
Q12. The impact assessment details risks and uncertainties. Which of these are most likely to be realised?
Q16. Do you have any specific comments on cost recovery not covered by the questions above?
If you would like to join the webinar please email Paul so that that we can send you dial in details. Click here to view the consultation document.
Note: Eversheds also runs a Health and Safety Summer School, at Christ Church College, Oxford on September 20-12