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Keoghs Insight

We keep you up-to-date on emerging market issues and their impact on the insurance sector, through a variety of publications, events and our leading market initiatives.

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Richard Ollier

Richard Ollier

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T: 01204 672240

Health and Safety Executive FFI invoices – new panel, same challenges

Blogs||21/09/2017

Since October 2012 the Fee for Intervention Scheme (FFI) has imposed a statutory obligation on the Health and Safety Executive (HSE) to recover costs from those duty holders who are found to be in breach of health and safety law. Fees become payable under FFI once the HSE has served a written notice of contravention, following which the company in question will receive an invoice.  

If the company disagrees with this invoice they are entitled to dispute it. Controversially, when FFI was introduced, the procedure by which invoices were challenged was administered by the HSE itself. This consisted of a two stage process with initial queries handled by HSE’s FFI team and formal disputes dealt with by a panel comprised of HSE staff and one independent representative.     

The perceived lack of independence ultimately led to outsourcing group, OCS Group Limited, challenging the disputes process through judicial review proceedings following the company’s unsuccessful challenge of an invoice related to the management of hand-arm vibration syndrome. OCS alleged that HSE’s retrospective review procedure to decide whether a notice of contravention was legitimately issued, was not independent given it was carried out by the HSE’s own staff. Effectively it was argued that the HSE sat as prosecutor, judge and jury in the adjudication of a dispute against itself.   

New process

As a result of the OCS judicial review a new independent disputes procedure was introduced by the HSE on 1 September 2017.  Whilst initial queries will still be dealt with internally by the HSE’s FFI team, second stage disputes will be referred to an independent panel consisting of a lawyer acting as the chair and two members with practical experience of health and safety management.

In terms of timeframes, disputes should be raised no later than 21 days after the duty holder receives a response to their initial query from the FFI team. Within 21 days of the dispute being lodged the HSE are required to disclose all relevant information available to the inspector at the time they decided there had been a material breach. The duty holder then has another 21 days to provide written representations upon the disclosure provided.

Following these steps the panel then meets to consider the dispute, normally based on the content of the written information provided by the parties. It is, however, open to the panel to request additional written information and in exceptional circumstances they have the discretion to convene a meeting with the duty holder and HSE; although all parties have to be in agreement for this to proceed.  

The panel chair will record their decision in writing, including reasons for the conclusion reached, which is to be provided to the duty holder within a further 21 days. 

Why Dispute an FFI Invoice?

FFI is triggered when an HSE inspector issues a notice of contravention indicating that, in their opinion, the business in question is in breach of the law. Whilst the amount of the invoice may not be problematic for many organisations there are important considerations and potential ramifications to take into account before payment is made.

One consideration is whether paying the invoice without dispute will imply that the company shares the opinion of the inspector that they were in material breach of the law. This could potentially be used against the business as an admission in any future prosecution. Likewise it is possible that, when considering whether to prosecute, the HSE could rely on past FFI payments as evidence of a history of repeated non-compliance, regardless of the fact that the company neither admitted nor agreed with the previous invoices.  

It should also be noted that payment of an FFI invoice could be referred to in civil proceedings brought by an employee as evidence of an acceptance of negligence and/or poor health and safety. A business could also be required to disclose information regarding FFI invoices in tender submissions relating to past regulatory compliance. Whilst at present there is no public register of FFI payments, such information could be obtained through a freedom of information request and, once in the public domain, such information could be used adversely against the company.

How to respond to an Invoice?

Whilst payment of an FFI invoice alone may not be sufficient to convict a company, steps can be taken to limit the potential affect any invoice may have on future criminal proceedings. The new disputes procedure not only introduces an independent panel to adjudicate on disputes but helpfully allows for disputes to be suspended while there is an ongoing HSE investigation or appeal against an enforcement notice.  

An invoice can be disputed on the grounds that there has been no material breach and it will be interesting to see how prepared the new independent disputes panel is to rule against the HSE. Even in the event of a dispute not being upheld, the fact that it has been disputed in the first place is evidence that the opinion of the inspector is not accepted.

Alternatively a company can write to the HSE confirming that, whilst the FFI invoice will be paid, they do not accept the opinion of the inspector and the notification received will be treated as advice, with payment not constituting any form of admission on behalf of the organisation.  

Whilst navigating the disputes process, it is key to avoid an inadvertent admission which may place your business in a more difficult position, therefore we recommend seeking legal advice prior to entering into any correspondence with the HSE. On the other side of the coin, it is also important that you do not view an FFI invoice as an incontrovertible document; if you feel a decision is unjust, you have every right to appeal. However, only time will tell how the new panel react to such challenges.