The HSE Fee for Intervention (FFI) is the HSE’s cost recovery scheme introduced in October 2012. The HSE can seek recovery its costs for inspection/investigation from companies who are not compliant with health and safety laws.
Since the introduction, fees have increased by 40% with the average cost of an invoice issued under FFI being in excess of £700. Companies in the manufacturing sector attracting the highest bills.
The FFI was introduced because the HSE believes that any business breaking health and safety laws should be financially responsible for the HSE’s time in putting it right. They charge an hourly rate of £124 for their inspectors’ time. If your business is inspected by the HSE and found to be in material breach of health and safety laws you may end up paying an FFI. Examples of breaches include:
If the HSE fine you you will have 30 days to pay the fine and the costs are not recoverable under your insurance policy. There is only a limited “appeals” process and if you are unsuccessful, the appeal could increase overall costs significantly.
How can you avoid fines, penalties and improvement or prohibition notices?
If your business has a structured health and safety management plan it will help ensure you are compliant with health and safety laws and avoid fines, penalties etc.
A suitable health and safety plan for an SME business should include the following:
New sentencing guidelines come into effect in February 2016 to address the current lack of guidance available to judges and to promote a consistent approach for sentencing health and safety, food and corporate manslaughter offences. The aim is to ensure that sentences are proportional to the offence and in relation to other offences.
The new guidelines will provide a system for fines based on turnover of the companies leading to a dramatic increase in the level of fines.
The starting fines for health and safety offences which cause death or involve a high level of culpability will vary between £250,000 (for organisations with a turnover of less than £2 million) and £4 million for an organisation with a turnover in excess of £50 million with an upper limit of up to £10 million pounds for large companies with such a turnover.
Fines for an offence involving death by a company with a turnover in excess of £50 million is likely to be in the region of £10 million. This is more than ten times the average current fine for similar cases.
The guidelines also introduce changes for the sentencing of individuals likely to result in more custodial sentences being imposed. If an individual’s actions result in the death or serious harm to an employee and are found to have been negligent, the court must consider a custodial sentence.
The number of prosecutions made by the HSE has been steadily rising, with 258 cases in the construction industry in 2014-2015 alone. There has been a 94% conviction rate resulting in fines of almost £4 million. It is vital therefore that you keep detailed and accurate records of your health and safety practices and procedures to prove your compliance. This will ensure that you are not prosecuted by the HSE and also helps to ensure that your employees are provided with a safe working environment.
Luker Rowe can provide guidance on the preparation of your health and safety plan. Please speak to one of our Commercial Lines Team for further information or advice.
Based on the articles “HSE fee for intervention” and “HSE sentencing changes” by Aspen Insurance, December 2015.