Failure to comply with an Enforcement Notice: the consequences

Friday, April 15, 2016

 Key Considerations

• Does your company know how to respond if you receive an Enforcement Notice?
• Are you aware of how to appeal the notice or to comply with it so you don’t breach the Notice and commit a criminal offence?

Introduction

 HSE and Council Inspectors often carry out unannounced visits that result in some form of enforcement. Occasionally, the inspector will issue an informal letter, but more and more frequently the HSE in particular, under the pressure of government financial targets to self finance, will issue a Notice of Contravention accompanied by an Enforcement Notice (Improvement or Prohibition Notice). 12,430 notices in total were issued by HSE and local authorities in 2014/15.

New Sentencing Regime

It is essential to appreciate the added importance of seeking legal advice if served with an Enforcement Notice (Improvement or a Prohibition Notice), especially in light of the new sentencing regime. To briefly summarize, February 2016 saw the implementation of the Sentencing Guidelines Council’s new sentencing regime for health and safety offences. The reality is that companies now face more substantial fines when prosecuted for health and safety breaches and directors and managers are more likely to be prosecuted alongside companies and be sentenced to a custodial sentence.

Consequences of Not Appealing an Enforcement Notice

If a company does not challenge a Notice then they are deemed to have accepted it and there are two key consequences:

i) it will be deemed an accepted "material breach" and the company will be liable for the HSE's Fees For Intervention which, depending on the nature and complexity of the breach, can result in invoices which the company has to pay, which can run into tens of thousands and not covered by insurance. (The hourly rate for an HSE Inspector's intervention following on from the duty holders material breach is £129 an hour.)

ii) Acceptance of a Notice can result in prosecution of the company, directors and managers as the acceptance is used as evidence of a breach of the company’s health and safety responsibilities.

HSE’s Public Register of Enforcement Notices

Under the old sentencing regime pre-February 2016, it was sometimes considered more commercially viable to accept the Enforcement Notice, take a pragmatic view and move on. However, this approach is arguably outdated since the implementation of the new sentencing guidelines.

The HSE has a public register of Enforcement Notices that it has served that have not been appealed which can be easily accessed by anyone. Notices appear on the database for a period of 5 years. After 5 years, notices served on organisations are removed from this database and placed in HSE’s Notice History Database where it will remain on its website. When prosecuting a company, it is now common for the HSE to seek to rely on previous notices as part of its case. The HSE refer to the Notices as evidence of ‘bad character’ and use them as evidence of the company’s propensity to commit health and safety breaches.

Practical considerations

If the deadline is imminent for appealing the Notice but a company is unsure about pursuing an appeal, then its position can be protected in the short term by lodging an appeal form and setting out briefly the grounds for appealing, which can always be amended at a later stage.

Also, a key consideration is that costs implications of an appeal for a company equally apply to the HSE/local authority. The lodging of an appeal can be a useful mechanism for opening up dialogue with the regulator which can often lead to further discussions between the company and regulator which may result in either the Notice being withdrawn or alternatively being modified, often with each party agreeing to pay their own costs.

Compliance with the Notice

If the material breach is accepted by the company, then it is essential to ensure that there is timely compliance with it. Failure to do so is a criminal offence which can and occasionally does result in a prison sentence. Recently, William Fry Fabrications Limited failed to thoroughly examine two cranes used by the company, despite receiving Prohibition and Improvement Notices in 2011. The company pleaded guilty at Westminster Magistrates Court to breaching Regulation 9(3)(a) Lifting Operations and Lifting Equipment Regulations 1998 and was fined £13,333 and ordered to pay costs.

Safety Smart Advice

i) Prevention

Regular periodic health and safety audits and the effective implementation of recommendations to improve compliance with the company's legal health and safety requirements will make the likelihood of an Enforcement Notice and subsequent prosecution less likely. Equally, if there is an accident which requires reporting under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013, then the likelihood of prosecution can be substantially reduced if the company has tight compliant systems and procedures in place to eliminate, manage and control risk in the business.

ii) Importance of Quick Response

It is essential that upon receipt of an Enforcement Notice under the new regime, companies seek immediate legal advice, as the deadline for appealing a Notice is 21 days. Then the dutyholder can consider whether it is possible to challenge the Notice on a factual or legal basis. Successfully challenging Notices can result in the HSE/local authority deciding not to pursue a matter which would otherwise result in Fees for Intervention for several thousand pounds or alternatively a prosecution, heavy fine and adverse publicity.

Conclusion

If a company is served with an Enforcement Notice, the consequences of accepting the alleged material breach can be serious. It can mark the start of a costly and drawn out downward spiral that leads to the prosecution of the company and its directors and managers. Therefore, it is essential to seek immediate legal advice to establish whether the Notice can be challenged.

Safety Smart’s legal team offer a free 30 minute telephone consultation for all Safety Smart clients if they require initial advice relating to strategy upon receipt of an Enforcement Notice.

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