Fee For Intervention: Will judicial criticism sound the death knell?

Since 2012, the UK Health and Safety Executive ("HSE") has had the power to recoup its costs in investigating an organisation where the HSE inspectors identify a "material breach" of health and safety law. It is a system which has been subject to criticism, with the introduction of the Fee For Intervention ("FFI") scheme quickly recognised by many as carrying a risk that it could encourage HSE Inspectors to identify breaches during any and every visit to an organisation. In a recent decision, a Crown Court Judge has commented on this risk and called on the DWP consider the scheme's on-going operation as a result.

In that case, brought against Falcon Tower Cranes Services Ltd, the judge found that "any prosecutor – carefully considering the detailed but relatively straightforward evidence in this case – should have concluded that a prosecution should not have been commenced." As a result of that ruling, the judge made a finding against the HSE ordering them to repay the defence costs which amounted to £587,000. In addition, however, the judge made criticism of the FFI system indicating as follows:

"I was extremely surprised to learn of this process. Respectfully, it could give rise to, at the very least, an appearance of abuse, because it is a system which could be seen to encourage inspectors to look for extremely minor breaches, where there may be none, simply to cover the costs of any visit…. I would firmly encourage the DWP to reconsider whether this is an approach which is appropriate within a fair and impartial judicial system."

The test for identifying a material breach of health and safety legislation, notified by way of a Notice of Contravention letter, which triggers the application of the charges, remains a subjective one. Whilst the amount of a FFI invoice can in certain circumstances be challenged via an appeal process, there is no formal appeal process through which an organisation can challenge the Inspector's decision that a material breach exists.

Fee For Intervention is currently set at £183/hour – with the figure reviewed and adjusted annually. Invoices can accumulate quickly and, in more complex cases or where specialist inspectors are asked to assist in an investigation, FFI invoices can amount to tens of thousands of pounds. These sums are not routinely covered by insurance policies meaning that organisations must make payment themselves. The total income HSE receives from FFI will vary year to year, but estimated figures suggest that the HSE has recovered approximately £127 million through the FFI scheme since its introduction in 2012.

Other cost recovery powers have long existed for the 'high-risk' sectors to allow HSE to recover its costs. For COMAH activities, offshore energy and the renewables sectors the hourly rates charged range from £212 to £322 an hour.

It remains to be seen whether an appeal will be lodged by the HSE following the decision in this case or whether the DWP will take any action following HHJ Everett's comments. However, for those acting on behalf of organisations in relation to health and safety regulatory breaches, this case has raised some interesting questions on the future of FFI. We know that HSE is reworking how prosecution decisions are made in England and Wales, passing the decision making to legally qualified staff in the HSE's Legal Services Division rather than relying on the investigating Inspectors.

In Scotland, the HSE has never had prosecutorial powers, and the decision has always been taken by the Crown Office and Procurator Fiscal Service. For many years, the Scottish system has benefited from a specialist Health and Safety Investigation Unit – legally qualified specialists experienced in this type of case, to provide the independence and impartiality now in place south of the Border.

However, even in cases which do not result in prosecution, a Notice of Contravention letter, and the FFI invoices which follow can be of serious concern. For more information on how the Brodies Health and Safety team can assist in challenging HSE's position in relation to your business, please do not hesitate to contact Victoria Anderson or Clare Bone.