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November 1, 2013

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An inspector calls – fee for intervention

Copyright AlamyIt has been a year since the HSE introduced its Fee for Intervention (FFI) cost recovery scheme. Sally Roff and Jo Brook offer advice on how to avoid charges for a material breach in health and safety law. 

Introduced on 1 October 2012, the HSE’s Fee for Intervention (FFI) cost recovery regime has been the subject of much debate in the industry. 
Inspectors are charging £124 an hour for any time they spend investigating and resolving material breaches of health and safety law found during an inspection or following an accident.  
 
The charges are payable within 30 days of the invoice date. Organisations which are found to be compliant with health and safety legislation will not be charged.  
 
In the first six months of the FFI’s introduction, inspectors issued 5,766 invoices across a wide range of industries. The HSE’s six-month report records that in the second quarter, 60 per cent of HSE inspections resulted in an invoice. The number of invoices and amounts charged is rising quarter on quarter and organisations should therefore be prepared to face scrutiny. 
 
Research carried out by DAC Beachcroft has found that fewer than 50 per cent of those surveyed had heard of FFI prior to the inspector turning up on-site. 
 
Organisations must remember that, while those in senior positions may be aware of FFI, those who will be greeting inspectors will more often than not be site managers, factory foremen and others in site-based positions. So what can organisations do to minimise the likelihood that they will be charged under FFI for any work that the HSE does with them? 
 
Prevention
It may seem obvious but compliance is key. The majority of organisations that we surveyed and had been the subject of a HSE inspection are no longer looking to the HSE for advice and clarification. 
 
Focus should shift to planning to ensure compliance before the inspector arrives, especially before pre-warned visits. A review should be made of the significant hazards relevant to an organisation and consideration given as to whether appropriate measures have been identified and, crucially, implemented to minimise health and safety risks. 
 
It is important to check that paperwork is up-to-date, that evidence of checks and audits has been obtained and that there are documented regular reviews to ensure systems and procedures are fit for purpose.
 
Managing visits
The general feeling among those organisations we interviewed is that the dynamic around HSE visits has changed since the introduction of FFI. Respondents felt that HSE inspectors are quick to identify a material breach. At the same time, the advice they provided as a matter of routine in the past is less available. 
 
Organisations should have a process for dealing with visits from the HSE (planned or unplanned), with the focus being on keeping them short and maintaining control. 
 
First of all, it is crucial that security, reception or other key personnel know how to direct HSE inspectors if they arrive on-site. It is also important that an individual who has knowledge of safety management and an understanding of FFI escorts the inspector while on-site. This is an organisation’s opportunity not only to try and prevent any ‘material breaches’ being alleged by providing details of compliance but also to develop a relationship with the inspector to explain more about the business and its safety culture. 
 
The inspector should be directed immediately into a meeting room or site office and an initial short meeting held to understand the scope of the inspection.
 
During the inspector’s walk round, notes should be taken of the circumstances of the inspection, including timings and any discussions or findings. This will enable an organisation to challenge any suggestion of a material breach and/or to dispute any invoices received, should that be necessary. 
 
If the inspector raises a query, it is important that the organisation fully explains the safety measures in place to minimise risk or promises an explanation following the visit. 
 
The inspector will be considering not only whether there is a breach but also whether that breach is ‘material’ (i.e. serious enough to require written rather than verbal advice). Organisations will only be charged for material breaches so the focus should be on trying to reassure the inspector that quick remedial action will be taken or to explain the context of the suspected breach so that the inspector does not consider a written notice of contravention to be warranted.   Remember that anything said during the visit could be written in the inspector’s notebook and used as evidence if an organisation decides to appeal against the notice of contravention or enforcement notices. 
 
A short meeting should be held at the end of the visit with the inspector to clarify the findings from the visit and agree action points. These may include the escalation of the notice within the organisation.  
 
Dealing with a written notice
A process must be in place for written notices to be escalated to the relevant level of seniority and to be addressed as quickly as possible with minimum intervention from the HSE in order to minimise any charges. 
 
An initial query can be raised with the HSE as to whether or not a material breach has occurred, followed by a formal dispute if that query is unsuccessful. The procedure for this is detailed below. While the clock only starts ticking when raising a query once an invoice is received, consideration should be given to this approach as soon as an inspector sends a written notification of a material breach. 
 
From a strategic perspective, it may be worth contacting the inspector shortly after the inspection to arrange a further meeting (with appropriate personnel and information readily available) to discuss the alleged breach and understand how he or she may react to a query if raised. 
 
It may be worth sending the inspector a report prior to the meeting detailing the reasons behind the organisation’s view which may assist in keeping the meeting short as the inspector’s time is likely to be charged.
 
Carefully planned, this meeting may assist in persuading the inspector not to pursue the material breach once the organisation raises a query or, at the very least, can help build a relationship with the inspector for the future. 
 
The average FFI invoice for the first six months of the scheme was £464 and this relatively low figure has, we understand from interviews, led many organisations to consider that it is easier (and more cost effective) to pay the invoice rather than query whether or not there is a material breach. If the breach is obvious, this is the right approach and organisations should write to the HSE with an action plan and seek the inspector’s agreement to it. 
 
Consideration should also be given as to whether the changes need to be rolled out across an organisation’s sites as, if similar changes are not made elsewhere and there is an accident or another inspection, the organisation will be seen as having received prior warning of the breach and more serious enforcement action may be taken as a result.  
 
It is important to appreciate that paying an invoice could be used by the prosecution as evidence of acceptance of material breach in any future prosecution, making it harder to defend a subsequent prosecution. Particular care should be taken by organisations that tender for work when deciding whether or not to accept a material breach because it is likely that they will need to declare these on future applications for work. 
Dealing with an invoice
 
FFI invoices are sent out quarterly and should be scrutinised not only in relation to whether a material breach has occurred but also on the basis of the amount charged. The appeal process is the same for both.  
 
The first stage of the appeal process is to raise an informal query with the FFI team (contact details on the HSE’s website) within 21 days of the invoice date. The HSE will not charge for its time dealing with this initial query and will respond within 15 working days. 
 
If an organisation disagrees with the HSE’s response, a formal level one dispute can be raised within 10 days of receipt of the response to its query. This is reviewed by an HSE senior manager (independent of the matter) who will need to reply within 15 working days. A level two dispute can then be raised by an organisation within 10 working days of the level one response that will be reviewed by a panel of HSE staff and an independent representative. The HSE will charge for its time taken in dealing with level one and two disputes in the event that an organisation is unsuccessful.  
 
When considering whether to dispute the invoice amount, time entries should be checked to ensure that the HSE has not charged for time for training inspectors, travel or where more than one inspector attends a site (unless they are carrying out different functions). 
 
Of the 145 queries raised over the first six months, 36 per cent were resolved with the invoice amended, so there is a good chance that an organisation may be able to reduce the cost in this way. 
 
Maintaining a good relationship
Provided an organisation understands the change in the HSE’s remit as a result of FFI, it is much more beneficial to maintain a positive relationship with an inspector to try and minimise the impact of any breaches found. However, there is anecdotal evidence that FFI is causing tension. 
 
The HSE’s six-month report shows that 25 of the 32 reports of threatening/violent behaviour towards inspectors for the year 2012 were in the three months post-FFI, which may be an indicator of an increase in tension and frustration among industry about this scheme. The organisations we surveyed also expressed anger at the lack of advice received for the amount charged. 
 
There is also some evidence that inspectors have taken time to adapt to this new regime and the change in focus.  The HSE’s head of field operations, David Ashton, touched on the impact of the scheme on HSE staff when speaking to delegates at the 2013 IOSH conference on 26 February: “It has been difficult,” he said. “Some have said they didn’t join the HSE to be a revenue collector but I ask them to turn around and look at what is best for our customers, and that is an adequately-resourced regulator.”
 
Most of the organisations surveyed agreed with the principle of being charged for resolving breaches. However, there are still concerns about consistency of implementation and the lack of advice given to organisations when a material breach is found. 
 
The HSE’s 12-month review of the scheme, due to be published in January 2014, may provide it with the opportunity to look again at achieving the tricky balance between its requirement to self-fund with the importance of maintaining an advisory relationship with the organisations it regulates, to ensure that high standards of safety are maintained.
 
Sally Roff is a partner and head of, and Jo Brook is a solicitor in, the safety, health and environment team at international law firm DAC Beachcroft 

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