While it’s the few high profile health and safety at work incidents that grab the headlines, let’s take a look at the UK-wide incident map for 2014/151.

• 2,538 deaths due to past asbestos exposure.• 142 people killed in the workplace.• 76,000 injuries to employees at work reported under

RIDDOR regulations.• 611,000 injuries at work according to the Labour Force Survey.• 27.3 million workdays lost to illness and injury.• At a cost of £14.3 billion under current working conditions.

Two new sets of Health and Safety Executive regulations – one pending and one recent – could have a serious effect on both your bottom line and your reputation.

• New sentencing guidelines: these come into effect from February 2016 and tackle the current lack of comprehensive

guidance available to judges. Designed to promote a consistent approach to sentencing for health and safety, corporate manslaughter and food offences, they will be based on company turnover. The likely result will be a dramatic increase in the level of fines.

• Fee for intervention (FFI): FFI is the HSE’s cost recovery scheme introduced on 1st October 2012. If you are not compliant with health and safety laws, the HSE may seek to recover its costs for inspection/investigation directly from businesses. Since its introduction, scheme fees have increased by 40 per cent2 with the average cost of an invoice issued under FFI now running in excess of £700.3 Unsurprisingly its businesses in the manufacturing sector that are attracting the highest bills.

In this bulletin, we take a look at the steps you can take to reduce your health and safety risk exposures with regards to these two vital areas.

SHARPER TEETH FOR THE HSE: DON’T GET CAUGHT BY FEE FOR INTERVENTION OR TOUGHER OFFENCE SENTENCES…

1 Health & Safety Executive: Key Figures for Great Britain (2014/15).2-3 Health & Safety at Work, Average FFI invoice tops £700, by Chris Warburton, 23 September 2015.

SHARPER TEETH FOR THE HSE: DON’T GET CAUGHT BY FEE FOR INTERVENTION OR TOUGHER OFFENCE SENTENCES …

• Did the defendant fail to comply with advice from regulators, authorities or employees?

• Did the defendant fail to comply with industry standards? • How adequate was training, supervision or reporting

arrangements?• How widespread was non-compliance? • Was there more than one death or a high risk of further deaths,

or serious personal injury in addition to death?

Proportionality … The new regulations mean the court should ensure the suggested fine is proportionate to the defendant’s means. Plus courts will judge the impact of the fine on associated but innocent third parties – for instance employees or service users – and any other unjustifiable wider consequences. Fines will be set based on business size/turnover - whether micro, small, medium, large or corporate. The court will then identify a starting point and range for the appropriate level of fine, also taking into consideration aggravating and mitigating factors to make adjustments from that starting point. For the details, click here.

1. New HSE sentencing guidelines …In February 2016 the most fundamental change in health and safety law will take place in over 40 years when new sentencing guidelines are introduced. They will ramp up fines for health and safety offences by as much as ten times current levels - which in some cases could reach the £10m mark. It’s not just fines: the new regulations will encourage more custodial sentences for directors and managers.

The new guidelines:• Provide a codified system for fines based on the turnover of

companies, likely leading to dramatic increases in the level of fines.

• Apply to any company convicted of a health and safety offence and will be used universally by the courts when imposing fines on corporate entities and individuals in all health and safety, food safety and corporate manslaughter cases.

• The starting points for health and safety offences that cause death and involve a high level of culpability will vary between £250,000 (for micro and small organisations with a turnover of under £2 million) and £4 million (for a larger organisation with a turnover in excess of £50 million).

• For an offence involving death by a large firm with a turnover in excess of £50 million, the fine is likely to be somewhere in the region of £10 million - possibly higher. This is over ten times the average current fine for similar cases.

New sentencing criteria … How will courts assess a given incident? Assessment criteria for assessing businesses and individuals will consider harm and culpability factors to measure severity, asking the following questions …

• How foreseeable was serious injury? The more foreseeable, the more gravely the offence will be viewed.

Arthur J. Gallagher: our conclusions …Risk management within health & safety in the workplace never stands still. We say pay close attention to the sentencing criteria listed above and overlay those questions onto the way you assess risk and the processes you put in place to deal with it. Make sure you work with a broker that understands workplace safety in depth and that will ensure your health and safety risk management strategy - and the insurance products that underpin it - are robust and fit for purpose.

SHARPER TEETH FOR THE HSE: DON’T GET CAUGHT BY FEE FOR INTERVENTION OR TOUGHER OFFENCE SENTENCES …

2. Fee for Intervention (FFI) – the experience thus far …FFI was introduced because the HSE believes that any business breaking health and safety laws should be financially responsible for the time it takes HSE to ensure things are put right.

• It charges an hourly rate of £124 for an HSE inspectors’ time. However if further expert investigation is required this will be charged in addition (with no financial cap relating to these additional costs).

• FFI income for the HSE was £9.6 million in 2013/2014 against forecasts of £37 million4 – below predictions but still a significant sum.

How could I end up footing the HSE bill? It’s simple. The HSE inspects your workplace or is notified of a material breach of health and safety and it judges a breach is sufficiently serious:

• To inspect or write to you as a notification of contravention; an improvement or prohibition notice or a prosecution

• It will record the time it has spent identifying the breach, helping you put it right, investigating and taking enforcement action.

Examples of typical breaches of health and safety laws include:

• Removing or not fitting safety guards to dangerous moving parts of a machine.

• Allowing poor/dangerous working practices that risk the health and wellbeing of your people.

• Exposure to hazardous materials. • Not having suitable and sufficient health and safety instruction,

training and documentation. • Investigation following a Reporting of Injuries, Diseases and

Dangerous Occurrences Regulations notification – aka RIDDOR.

The HSE will issue an invoice for payment and you will have 30 days to pay the fine. These costs are not recoverable under your insurance policy. There is a limited appeals process and if unsuccessful, this could increase your overall costs significantly.

How do I avoid fines, penalties, improvement or prohibition notices?Having a structured health and safety management plan at the heart of your organisation will help ensure you are compliant with health and safety laws and be well placed to avoid fines and penalties for any breaches of health and safety legislation.

Storm Desmond has put flood damage high on peoples’ agendas. Arthur J. Gallagher: our health and safety risk advice …• Appoint a person responsible for health and safety. This can

be an internal, suitably experienced person or an external professional.

• Prepare a health and safety policy that meets current legal requirements and best practice, ensuring the policy is regularly reviewed so it adequately reflects the activities of your business.

• Regularly review risk assessments of all activities that may affect the health and safety of employees and visitors.

• Develop safe working practices where hazardous processes exist.

• Provide and record appropriate health and safety training for staff.

• Establish a system for recording and investigation of accidents and near misses.

• Carry out regular health and safety audits of the workplace, systems, procedures and documentation.

4 Health & Safety at Work, Fee for intervention generated £9.6 million in 2013/14, by Frances Winder, 13 June 2014.

SHARPER TEETH FOR THE HSE: DON’T GET CAUGHT BY FEE FOR INTERVENTION OR TOUGHER OFFENCE SENTENCES …

With FFI fees increasing by 40 per cent over a three year period (January 2013 the average fee was £513; in March 2014 it stood at £618), two things can safely be assumed: FFI is here to stay and future increases will continue to rise pro rata.

Therefore now is a good time to check your health and safety management plans to ensure you are not at risk. Come and talk to Arthur J. Gallagher. We understand health and safety risk management like few other brokers and we can help you minimise the threats to your business – whatever its size.

About Arthur J. GallagherFounded in 1927, Arthur J. Gallagher & Co. has become one of the largest, most successful insurance broking and risk management companies in the world. With extraordinary reach internationally, our parent group employs over 20,000 people and provides services in more than 140 countries. Outside the US we are known as Arthur J. Gallagher and wherever there is an issue of risk, we’re there for our clients. We are a business without barriers – working together to create solutions that drive value and competitive advantage for our clients. Our people, our depth of technical knowledge and our global reach will deliver unrivalled advice and coverage expertise.

Arthur J. Gallagher has an in house Risk Consultancy Service who can answer any queries you may have

T: 0800 612 2278 E: ukenquiries@ajg.comwww.ajginternational.com

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This bulletin is not intended to give legal or financial advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this bulletin we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained. You should not act upon (or should refrain from acting upon) information in this bulletin without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited accepts no liability for any inaccuracy, omission or mistake in this bulletin, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.

Arthur J. Gallagher Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55, Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909.

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