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    NEW CHARGES PROPOSED FOR CDM 2007 NON-COMPLIANCE

    HSE cost recovery plans set to change the construction safety landscape

    Proposals have now been published for taking forward Government policy requiring HSE to impose charges on those found in breach of the CDM Regulations 2007 and other health and safety laws.

    The new arrangements are contained in the Consultation Document seeking views on the proposed systems. The consultation period ends on 14th October 2011.

    Charges for those in ‘material breach’ of law

    The new ‘Fee for Intervention’ will be invoiced where there is a ‘material breach’ of health and safety law. A material breach is one which, in the opinion of the inspector, requires them to make a formal intervention. HSE will recover all of the costs of that intervention.

    A formal intervention is where a requirement to rectify the breach is formally made in writing e.g. by enforcement notices, electronic mail or letter.

    Those who are in compliance with requirements will pay nothing nor will those in ‘technical’ breach of the law i.e. a breach which, in the opinion of the inspector, does not require them to make a formal intervention. The proposals also exclude:

    • inspections and incident investigations by Local Authorities;
    • self-employed, unless they expose other people to risks; and
    • breaches by employees.
    High five figure sums could be payable

    Costs will be recovered from the start of the intervention during which the material breach was identified up to and including the point where intervention in relation to that breach had been concluded.

    The costs will include all related follow-up interventions (e.g. site visits, phone calls), the provision of any specialist assistance, the costs of writing letters and reports plus the drafting and issuing of any enforcement notices.

    An averaged hourly fee for intervention rate will be charged (estimated at £133) for all HSE staff involved in the interventions. This excludes the Health and Safety Laboratory specialist services (HSL) for which actual cost will be charged. The estimated averaged costs recovered are:

    • Inspection with no action – no costs;
    • Inspection with letter – approx £750;
    • Inspection with enforcement notice – approx £1500;
    • Investigations – appox £750 to tens of thousands of pounds.

    The actual intervention costs will depend upon the particular circumstances and the complexity of the investigation required to follow all reasonable lines of enquiry

    No change in enforcement policy and procedures

    HSE has publicly available policies and practices setting out the principles that inspectors apply when deciding on the appropriate action to take in response to breaches of health and safety legislation. These will remain unchanged by the introduction of the cost recovery scheme.

    There will a queries and disputes resolution procedure aimed at resolving all queries or disputes “promptly, fairly and in a transparent way”. The costs of handling disputes will be charged where the dispute is not upheld.

    Clients, designers, CDM-Cs and contractors all at risk

    The CDM Regulations 2007 imposes duties on a range of organisations.

    When undertaking interventions e.g. inspections, investigations, enforcement or following up complaints, HSE will identify those CDM duty holders to whom fee for intervention applies and will seek to recover costs from them where they are in material breach of health and safety law.

    Comment

    These proposals represent a major departure from the current system under which HSE only recover costs in construction where legal proceedings are instituted. However, this is now the opportunity to influence the nature of the system imposed. Some immediate thoughts are:

    • HSE behaviour – there is no intention to change the behaviour of HSE Inspectors who should continue to exercise their discretion based on the facts and existing policies and procedures. However, in practice there is likely to be a complex interplay between the new charging system and the behaviour of HSE Inspectors, including some unanticipated consequences;
    • Exercise of discretion – the decision to charge will be based on the opinion of the Inspector that the breach is ‘material’ and that formal communication is ‘required’. HSE guidance to inspectors on the exercise of such discretion will come under close scrutiny, debate and ‘negotiation';
    • Diversion of resources – there is likely to be an impact on HSE/ Industry relationships and formal disputes may divert all parties from dealing with real safety issues. The time taken to recover costs from the recalcitrant end of the industry could be significant;
    • Costs imposed – the charges imposed on organisations may be substantial especially where the HSE intervention arises from a incident. There is no limit to costs or restriction based on the ability to pay;
    • Whistle blowing – complaints to HSE may rise, made by those who comply or those charged and concerned that others are ‘getting away with it’;
    • Project relationships – clients, designers and CDM-C’s will come under increasing scrutiny as contractors seek to point HSE further up the supply chain when matters go wrong on site;

    The test of the system will be whether or not it improves the levels of compliance, risk and personal harm that currently arise on UK construction projects.

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