Notifying all businesses of changes to HSE sentencing

By Emma Drew

February 25, 2016

Notifying all businesses of changes to HSE sentencing

From February 2016 new sentencing guidelines for health and safety offences came into force which means from now on fines will be significantly higher than before and some larger companies can expect to pay fines in excess of £1 million.

The Health and Safety Executive (HSE) operates a Fee for Intervention (FFI) cost recovery scheme, which was initially introduced on 1st October 2012 to place more responsibility on businesses, organisations and duty holders to comply with health and safety laws. Before the new changes these investigations were funded by the taxpayer.

Businesses found liable of breaking Health and Safety laws face a fee for recovery of the HSE’s services, including inspection, investigation and taking enforcement action. In addition, custodial sentences could be imposed on the individual if their negligent actions have been found to have resulted in the injury or death of another employee.

The new guidelines will focus on the risk that has been created, rather than the actual damage caused and investigate whether the risk was deliberate or accidental. Fines will then be issued based on the company’s annual turnover.

Organisations who are compliant with the law, or where a breach is not material, will not be charged for a (FFI) for any work that HSE does with them. A material breach will be granted if a HSE inspector believes there has been a contravention of health and safety law that requires them to issue a notice in writing to the duty holder.

A breach includes:

  • Operating a business with poorly fitted machinery
  • Exposing employees to hazardous materials
  • Failing to apply current health and safety working practices which could endanger your staff
  • Not arranging for your staff to have the correct training

Who does it apply to?

Fee for Intervention applies to duty holders including, employers and self-employed business owners who put employees or members of the public at risk, and some individuals acting in a capacity other than as an employee, e.g. partners.

It also includes:

  • Public and limited companies
  • General, limited and limited liability partnerships; and
  • Crown and public bodies
  • Charities, voluntary organisations, sports governing bodies and clubs are not exempt.

How much would I need to pay if found liable?

Since its introduction the fee payable by duty holders found to be in material breach of the law is £124 per hour and any additional costs based on the amount of time it takes HSE to identify and conclude its regulatory action. The new sentencing guidelines have seen fees increase significantly with the average cost of an invoice issued under FFI being in excess of £700, with companies in the manufacturing sector being hit the hardest.

Invoicing and debt recovery functions are carried out centrally within HSE. Inspectors are not responsible for issuing invoices or for any follow-up actions relating to non-payment of invoices. Invoices will generally be sent to duty holders every two months, within 30 days working invoicing period.

How will this affect insurance policies?

Fines are uninsurable and your Public Liability policy will not cover you in the event you are found to be in breach of health and safety law. Insurers may need to review and amend their policy wordings to identify whether it includes prosecution costs for regulatory proceedings.

It is advisable you keep a copy of all of your health and safety practices and procedures as evidence of your company’s compliance should you face a prosecution by the HSE.

How can we help?

For more information on managing your risk more effectively or to review your current liability policy, please contact your usual Perkins Slade representative, alternatively contact us on 0121 698 8000 or email info@perkins-slade.com

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