The Lorry Lawyer: DWF keeping you moving forward

Fees for intervention

Subject to parliamentary approval, from 1 October 2012 businesses will incur a new cost if the Health and Safety Executive (HSE) discovers that there has been a material breach of health and safety laws. Vikki Woodfine and Joanne Witheford at DWF look at what this regime will involve, how it will affect hauliers and how best to prepare for it.

Moving forward, if the HSE takes the decision to notify a business in writing that a material safety breach has occurred, the business will be charged for HSE’s time spent identifying and investigating the breach and assisting the dutyholder to put things right. The new scheme, which is called ‘fees for intervention’ (FFI), is one of the biggest changes to the health and safety landscape in recent years and all businesses should prepare in advance for how FFI might affect them.

FFI is triggered when, in the opinion of a HSE Inspector, there is or has been a material breach of health and safety law that requires the HSE to issue notice in writing of that opinion to the dutyholder. From this point, a business will become liable for the HSE’s costs until it has corrected the issues with the support of the HSE.

How does it affect you? “The need for Safe drivers, Safe site, Safe vehicles…”

The HSE’s guidance to the scheme sets out that “every year, a significant number of people are killed or suffer significant injuries from being run over or having vehicles overturned on them in poorly planned or managed transport systems in workplaces. The key to safe transport is ensuring safe drivers, safe site and safe vehicles”.

There should be little doubt that the transport sector will feel the effects of FFI when it comes into force. Additionally, while self-employed persons who put only themselves at risk with their work are exempted from the scheme, because a driver’s work inherently involves risk to other road users, it would be very unlikely that any self-employed drivers would be excused from FFI.

The following are examples of health and safety breaches that the HSE have warned are likely to trigger FFI:

  • Not ensuring a safe site, for example poorly defined traffic routes, obstruction of aisle ways or roadways, poor lighting, uneven surfaces and no separation of pedestrians from vehicles where this is reasonably practicable
  • Not providing safe vehicles, for example defective steering, brakes, mirrors, lights, and no reversing aids where required, and
  • Not ensuring safe drivers, for example fork-lift truck drivers who are neither trained nor competent.

From the moment FFI is triggered, every minute of time that the HSE spend on a matter becomes chargeable to a business at a rate of £124 per hour. The time that is chargeable will include anything from time spent visiting yards or checking vehicles, to time spent drafting letters, making phone calls or engaging experts to assist with investigations. What is more, if the HSE does engage a third party, for example an engineer to inspect vehicles or a tachograph analysis bureau to advise on drivers’ hours, the dutyholder will be charged the full extent of those third party’s fees, not limited to £124 p/h. These fees could run into thousands of pounds and yet business would have no control over the time or expenses incurred by the HSE and would only discover the extent of their liability once they receive the HSE’s invoice.

Commenting on the new guidelines, Vikki Woodfine, Senior Transport Solicitor at DWF, expressed concern about the potential impact of FFI on businesses in the transport sector. She said: “there seems to be no room for discussion with the HSE; the first time that a business can raise objection is after an invoice is raised. The relationships that have formed over the years between the HSE and businesses are likely to suffer damage as a result of FFI, ruining the efforts that have been put into forming those mutual bonds over the years. It would not be surprising if businesses were discouraged from contacting HSE for advice for fear that the result might be a costly intervention by the regulator.”

Estimations as to the likely costs that businesses may face are wide ranging. Some suggest that costs may start from £750 for a letter, increasing to £1500 where an enforcement notice is served. However, such rough estimates are unlikely to be much help to businesses, who will face the uncertainty of not knowing how much time the HSE has spent on their file until they receive the invoice. Let’s not forget that the HSE do not need to convict a business to issue a FFI invoice. They don’t even need to criminally charge a business to seek to recover investigation costs!

What can you do to prepare for FFI?

Businesses should be aware that there is the option of appeal if they find themselves issued with one of the HSE’s invoices. While there is no cap on the amount the HSE can charge, the fees payable by a business are subject to the caveat that all of the HSE’s costs/time should be reasonably incurred. Therefore, a dutyholder could lodge an appeal if believes that the HSE’s costs were unreasonable or disproportionate. A business might also decide to appeal on the basis that it does not believe that a material breach had been committed in the first place to have triggered FFI.

Many businesses may take the view that it is not worth the hassle of challenging the FFI invoice if the cost is relatively low. However, businesses should be aware of the repercussions of accepting and paying the invoice without question. The worrying possibility is that payment of these FFI costs could be used as evidence, either in a subsequent health and safety prosecution or in personal injury cases, that the business has accepted liability. Businesses should therefore think before paying the fees blindly and thought should be given in advance to the strategy a business will take if it is notified of its potential liability under FFI.

Businesses are advised to check the terms of their insurance policies and consider whether they would be required to tell their insurers if they receive a notice that FFI has been triggered. Additionally, businesses might want to seek insurance that covers any FFI costs to protect themselves from the uncertainty associated with them, or seek cover that includes the costs associated with challenging the invoices. You can clearly see the risk of accepting an FFI invoice and the effect that this could have on a business and insurer if a related personal injury compensation claim is received later.

Clearly, the best way to avoid FFI costs is to take steps to ensure that there are no breaches of health and safety laws in the first place, however, given the potential impact of FFI and the discretion afforded to HSE Inspectors in deciding whether a material breach has occurred, this may well be impossible as one would be looking for a council of perfection. Therefore, businesses are well are advised to prepare in advance for how they will respond if they do find themselves facing FFI costs.

For more information on Fee for Intervention, contact DWF’s Vikki Woodfine or Joanne Witheford.

© 2012-2013 DWF LLP