Health And Safety Executive’s Fee For Intervention (FFI) Scheme

The Health and Safety Executive’s Cost Recovery Scheme (Fee for Intervention) came into effect on 1 October 2012, under regulations 23 to 25 of the Health and Safety (Fees) Regulations 2012. These Regulations put a duty on the Health and Safety Executive to recover its costs for carrying out its regulatory functions from those found to be in material breach of health and safety law. Guidance on the Application of Fee for Intervention (FFI) is available on the HSE website (HSE47).

The scheme has been introduced so that if businesses commit a material breach, in other words a contravention of health and safety law where a written notice would be issued to the duty holder by a Health and Safety Executive (HSE) inspector, then the business should pay for the time the HSE spend on putting matters right. The fee is based on the amount of time that the inspector has had to spend identifying the material breach, helping businesses to put it right, investigating and taking enforcement action. This has to be seen as a step in the right direction where those who break health and safety laws receive a financial penalty which will be proportionate to the seriousness of the breach reflected in the time spent by the HSE inspector.

A recent survey carried out by legal firm DAC Beachcroft when questioning more than 100 organisations across a range of industries, 50 per cent admitted they did not understand the meaning of a material breach. The survey also revealed that a lack of clarity over the term material breach which could lead to different interpretations depending on the individual inspector involved.

The scheme only applies to work carried out by HSE inspectors and not other enforcing authorities for example local authority environmental health officers. FFI will apply to all businesses inspected by the HSE including public and limited companies, general, limited and limited liability partnerships and Crown and public bodies with some exceptions.
The exceptions include self-employed people who do not put other people at risk by their work, businesses that are already paying fees to the HSE for work through other arrangements, licensable work with asbestos and businesses that work with certain biological agents.

When deciding whether a duty holder is in material breach of the law, HSE inspectors must apply the guidance and principles of the HSE’s existing enforcement decision making frameworks, the Enforcement Management Model (EMM) and the Enforcement Policy Statement (EPS).

The EMM principles are used by inspectors in making decisions about enforcement action. The underlying principle of the EMM is that enforcement action should be proportionate to the scale of health and safety risks identified and to the seriousness of the breach of law.

The cost of inspector time has been stated as £124.00 per hour and in the guidance on the application of FFI there is a description of the methodology used for calculating the amounts payable (Appendix 2 HSE 47).

The FFI scheme could potentially dramatically increase the costs to companies of a material breach and whilst the methodology has been set out as to how the amount is calculated until a material breach actually happens the precise figure is difficult to estimate. This could be a very significant amount to a business and puts a lot of responsibility on HSE inspectors to account, record and justify their time. The definition of a material breach requires clarification so that interpretation is standardised and applied in a consistent way otherwise there is a risk of weakening the relationship between the regulator and the duty holder.

Anne Mallory FIIRSM, Director of Mallory Health and Safety Consultants Ltd