A judicial review challenge over the disputes process of an HSE scheme has been dropped after agreement was reached between the applicant and the HSE. Since 1 October 2012, the HSE’s Fees for Intervention (“FFI”) scheme has enabled the HSE to charge for some of its health and safety enforcement activities. Companies who find themselves liable for these fees are able to challenge them via a ‘Queries and Disputes’ process. Recently, however, the way in which the HSE adjudicates on disputed FFI invoices has been subject to criticism. In September 2016 OCS Group UK Limited (“OCS”), a facilities management and maintenance organisation, began the process of bringing a judicial review claim against the HSE. It has now been announced that the parties have agreed to cease proceedings and the HSE is to consult on amendments to its disputes process.
The FFI scheme
The Health and Safety (Fees) Regulations 2012 provide that those who materially breach health and safety laws are liable for recovery of the HSE's related costs. A material breach is considered to be when, in the opinion of an HSE inspector, “you have broken a health and safety law and the inspector judges this is serious enough for them to notify you in writing” (as stated in HSE’s guidance: Fees for intervention: what you need to know). In those circumstances, the company will be served with a ‘notification of contravention’, the formal notice that triggers an FFI bill. A company in receipt of this HSE notification will be charged for the inspector’s time. In April 2016 this chargeable rate rose from £124 to £129 per hour. More information on the scheme can be found in our previous Law Now.
The ‘Queries and Disputes’ process
The FFI scheme contains a route for challenging FFI invoices. If a company wishes to dispute the amount charged or disagrees that there had been a material breach in the first instance, they may make a written 'query' to the HSE. This is considered and responded to by the relevant HSE inspector's line manager.
If the company is not satisfied with the response to the query and wishes to escalate the matter, then a 'dispute' can be raised in writing. The outcome of this stage is determined by a panel of two senior HSE managers (who, although HSE internal, are to be independent of the management chain responsible for the work that generated the invoice) and an independent representative drawn from a pool of industry and trade representatives. This panel determines whether the invoice should be upheld, varied or cancelled.
Criticism has been levied at the composition of the disputes panel which, it has been suggested, is such that the panel lacks impartiality. Whilst the existence of an independent third member is intended to act as a check on any perceived bias, this is said to be insufficient: the ultimate view of the panel must, by its make-up, be the view of the HSE.
Should the dispute be unsuccessful at this later stage, the time taken to adjudicate is charged at the £129 per hour rate. Furthermore, an amendment under the Health and Safety and Nuclear (Fees) Regulations 2016 means that HSE will also be able to recover its legal costs in relation to the dispute. In seeking to challenge a cost imposed upon them, parties may therefore end up only incurring greater costs still. Importantly, both the query and dispute stages are decided on paper. There is no right to an oral hearing and at no point can the billed entity or their representatives appear before the panel. Similarly, the dutyholder is not entitled to see any evidence on which the HSE inspector's opinion is based.
It is this setup which OCS sought to challenge by means of judicial review.
Source: ‘Guide to FFI Queries and Disputes V2’, Health and Safety Executive, FFI Team January 2014
The judicial review
OCS began the judicial review process after unsuccessfully querying an FFI bill. In August 2014, the HSE alleged that the company was in breach of Regulations 6(2) and 7(2) of the Control of Vibration at Work Regulations. The company was served with a notification of contravention over its management of Hand Arm Vibration Syndrome (“HAVS”) regarding the use of garden strimmers to cut grass at Heathrow airport. OCS denies that it was in material breach of the Regulations and argues that it had carried out all appropriate assessments for HAVS, including limiting the amount of time that workers were required to use the strimmers. Nevertheless, the company was billed with FFI invoices totalling £2,306.
OCS raised an initial query with the HSE. This was rejected by the HSE’s internal team. The company subsequently escalated the matter to a dispute, but this too was dismissed by the HSE’s disputes panel. The company then sought to challenge not merely the specific bill, but the fairness of the dispute process as a whole. Legal representatives for OCS argued that the disputes process enables the HSE to act as a ‘judge in its own cause’. They called for a “fair procedure and an independent means of resolving disputes”. OCS argued that, at a minimum, the HSE ought to put its allegations to the billed company and disclose evidence of supposed contraventions. OCS were granted permission to proceed with judicial review on 20 September 2016.
With the threat of a substantive judicial review hearing looming, the HSE has announced that it is to consult on proposals to make the FFI scheme “fully independent”. A recent press release (available here) outlines the HSE’s view that “following a recent application for a judicial review [the HSE] believes the time is right to move to a dispute process which is completely independent of HSE”. HSE has agreed to introduce a revised process for determining disputes on or before 1 September 2017. In light of these announcements, a consent order setting out the agreed position between the HSE and OCS was submitted to the court on 7 February.
If OCS had succeeded in its challenge, the existing disputes process may have been quashed and the HSE may have had to develop an amended system. In offering to consider an overhaul of the process, the HSE may well have avoided its day in court – but it has nonetheless been cajoled into taking action. Importantly, however, this is no guarantee that the new system will meet requisite levels of independence. Should the consultation fail to yield a process which is seen to be fair, it will be interesting to observe whether OCS resumes its challenge.
It is not yet known when the HSE will launch its consultation process, how long this will take, or whom it will specifically consult – aside from the rather general “relevant stakeholders”. An update will be provided when this information becomes available.