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Regulators' moves increase certainty and transparency of health and safety rules

Out-Law Legal Update | 17 Mar 2017 | 10:05 am | 4 min. read

LEGAL UPDATE: The Health and Safety Executive (HSE)'s recent announcement that it intends to review the disputes resolution mechanism in its Fee for Intervention (FFI) scheme, coupled with the Sentencing Council's publication of its Definitive Guideline on Reduction in Sentence for a Guilty Plea, will be encouraging reading for health and safety professionals, heralding increased certainty and transparency in the enforcement process.

The FFI scheme came into effect on 1 October 2012 and was designed to shift some of the costs of regulating workplace health and safety from the taxpayer to those responsible for breaches. Those found to be in 'material breach' of health and safety laws are now liable for payment of HSE's related costs, including those incurred as a result of inspection, investigation and taking enforcement action. The duty holder can dispute any fees raised under the scheme.

The current disputes mechanism is overseen by two HSE members with one independent member and has faced increasing criticism for lacking independence. The HSE's agreement to consult on change follows an application for judicial review of the FFI dispute resolution mechanism, brought by facilities management firm OCS Group UK Ltd.

Few are challenged, however. One review carried out shortly after its inception revealed that only 3% of FFI invoices were queried of which only one third were subsequently amended (1% of the total invoices issued). The figures for disputed invoices were even lower: just three of over 14,000 invoices were referred to the disputes panel and only one was successfully challenged.

As part of its agreement to settle the application for judicial review with OCS Group UK Limited, HSE has agreed to put a new system in place by 1 September 2017. Under its proposals the first stage review process will be largely unchanged and will be dealt with by the relevant HSE inspector's line manager. That line manager will, however, have the option to discuss the matter with the duty holder before making a decision.

If the matter is escalated beyond the line manager it will be dealt with by an independent panel, chaired by a lawyer, with two members experienced in health and safety matters. The panel may convene a meeting with the inspector and duty holder as part of the process

Although businesses may see paying any FFI invoice as the most time and cost effective solution given the limited scope to challenge HSE's decisions on costs under the existing regime, this approach could be seen as an admission of guilt and have serious ramifications if the company was later subject to criminal prosecution - making the payment, rather than challenging it, could potentially be cited as evidence of poor health and safety performance.

With evidence of previous breach being an aggravating factor in sentencing under the Definitive Guideline for Sentencing in Health and Safety, Corporate Manslaughter and Food Safety and Food Hygiene offences, the consequences could run far beyond the amount in the FFI invoice.

Duty holders should be encouraged by the HSE's commitment to review but we will have to wait to see what the consultation generates and what change is brought about. Many hope that the opportunity will be taken to look not only at the dispute resolution mechanism in the scheme but at the whole scheme itself, particularly as it consistently fails to produce anticipated revenues and, for some, has built a wall of suspicion between the HSE and its stakeholders. At the very least an independent disputes process will go some way to addressing the negative perceptions around the HSE's integrity, start to rebuild the trust with duty holders and bring about a more fair, just and transparent 'check and balance' to the overall FFI process.

Sentencing Council introduces flexibility on guilty plea sentence reductions

Meanwhile, the Sentencing Council has published its Definitive Guideline on Reduction in Sentence for a Guilty Plea. The guideline, which will be applicable in England and Wales from 1 June 2017, aims to clarify the reduction in sentence available to a defendant who pleads guilty, with a larger reduction available the earlier the guilty plea is entered.

Intended to produce consistency of approach and transparency of operation, the Guideline sets out a sliding scale of available reductions linked to the point at which the guilty plea is entered, ranging from the maximum one third if the plea is entered before the "first stage of proceedings" decreasing to one quarter if entered thereafter but before trial and then to one tenth if entered on the first day of trial. A further reduction, even to zero, will be applicable if the guilty plea is given during the trial.

The "first stage in proceedings" will "normally be the first hearing at which a plea or indication of plea is sought and recorded by the court". On the face of it, this marks a considerable departure from the current rules and is of potentially significant concern for organisations accused of complex regulatory offences.

Under current rules the maximum reduction is available if a guilty plea is tendered at "the first reasonable opportunity". In serious regulatory matters this flexibility has been welcome as it allows the court when considering the degree of credit to apply to take into account the possible technical and expert evidence that often exists in those cases and that obtaining instructions from an organisation or corporate entity requires internal processes to be complied with. The obtaining of technical and expert opinions, which often take significant periods of time to obtain, are often necessary to inform the lawyer advising the defendant and for the provision of meaningful legal advice as to plea.  

The guideline seeks to address such concerns, however, by including various exceptions to the normal rules on the available reduction. Included amongst these is the situation where "the sentencing court is satisfied that there were particular circumstances which significantly reduced the defendant’s ability to understand what was alleged or otherwise made it unreasonable to expect the defendant to indicate a guilty plea sooner than was done, a reduction of one-third should still be made."

This acknowledgement that there may be circumstances where full reduction credit should be retained is to be welcomed. Question marks still remain, of course, over how the courts will interpret the exceptions, but in practice we anticipate it will make it easier for organisations to take proper advice, and be fully informed, before deciding if a guilty plea should be entered. Such considerations are especially important given the trend for greatly increased fines for regulatory offences, emphasised in recent sentencing guidelines for environmental and health and safety offences. Any limitation in the available reduction would have a significant impact on the level of fine eventually imposed.

Health and safety professionals will welcome these developments. In an environment of increasing pressure on limited resources, any attempt to ease the strain and make justice more transparent and consistent must be encouraged.

Kevin Bridges and Laura Page are health and safety experts at Pinsent Masons, the law firm behind Out-Law.com