Tuesday, 3 July 2012

October start for HSE cost-recovery confirmed

The HSE’s cost-recovery scheme, known as Fee for Intervention (FFI), will begin on 1 October, subject to Parliamentary approval, the regulator has announced.

As well as confirming the start date for the scheme, the HSE has also published initial guidance explaining how the scheme will work in practice, along with examples illustrating how it will be applied.

The scheme was originally expected to come into force in April but was postponed following the HSE’s decision to take more time to discuss certain “technical details” and carry out a test run. Announcing the date of the scheme’s launch (29 June), HSE programme director Gordon MacDonald stressed that law-abiding businesses will not pay a penny and that the Executive will only recover costs from duty-holders that are found to be in material breach of health and safety law. “We have worked with industry representatives in shaping the final form of the scheme, and the published guidance explains how the scheme will work and what businesses can do to comply with the law and avoid incurring a fee,” he explained.
“It is right that those who break the law should pay their fair share of the costs to put things right, and not the public purse. Firms who manage workplace risks properly will not pay.”   

Detailed advice on the scheme’s operation is now available in a newly published guidance document on the HSE’s website. The guidance includes a number of examples of material breaches but does not cover every scenario where FFI might apply. It also explains how the scheme will operate in accordance with the HSE’s existing Enforcement Management Model (EMM) and the Enforcement Policy Statement (EPS).
The process for handling queries and disputed invoices is also covered, although full guidance on these procedures will be published on the HSE website in advance of the Health and Safety (Fees) Regulations 2012 – under which FFI is being introduced – coming into effect.

The new guidance confirms that the fee payable by duty-holders found to be in material breach of the law is £124 per hour, except where work is contracted to the Health and Safety Laboratory, or a specialist third party, in which instances the actual cost to the HSE of the service will be recovered from the duty-holder. The fee includes all work that is needed to identify a material breach and all work to ensure that the breach is remedied.

FFI will apply when an inspector:
  • identifies a contravention of health and safety law;
  • is of the opinion that the contravention is serious enough to require written notification (i.e. it is a material breach); and
  • notifies the person contravening the law of their opinion, in writing, by a notification of contravention, Improvement or Prohibition Notice, or prosecution.
Invoices will generally be sent to duty-holders every two months, and payment is due to the HSE within 30 days of the date of the invoice.

With disputes, all initial inquiries will be treated as a query for which no fee is payable. However, if duty-holders are not satisfied with the response to their query, they can formally dispute the invoice by writing to the HSE and setting out the specific reasons why they do not believe the charge is valid. A fee is payable for handling disputes.

Existing arrangements for making an appeal against an Improvement or Prohibition Notice remain unchanged.
Steffan Groch, a partner at DWF solicitors, said FFI is of particular concern for smaller businesses. “Depending on experience and style, some inspectors may take longer than others to complete the investigation, which will undoubtedly lead to discrepancies across the board, meaning some businesses could pay much more than others,” he explained. “Apart from knowing that the hourly rate will be £124, businesses will have no way of knowing what the final bill will come to until the very end of the case. What’s more, there appears to be no room for discussion or negotiations until this stage either, as the first time that a business can raise an objection is when they receive the invoice for the investigation. Ultimately, it is smaller businesses that are going to suffer as a result of the FFI regulation.”

The initial ‘Guidance on the application of Fee for Intervention’ is available at www.hse.gov.uk/pubns/hse47.htm but a final version will be published prior to the start date of the scheme.

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