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UK’s OSHA Adopts ‘Loser Pays’ Policy

Monday, July 16, 2012

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UK employers who flout health and safety laws will start subsidizing the cost of their own enforcement, in a novel “cost recovery scheme” that the government will launch this fall.

New “Fee for Intervention (FFI)” regulations will require the UK’s Health and Safety Executive to recover the cost of carrying out its regulatory functions from violators.

 Fall protection will be one area of enforcement in the UK’s new “loser pays” program.


Fall protection will be one area of enforcement in the UK’s new “loser pays” program. Employers who follow health and safety laws will pay no fees.

Law-abiding businesses will be free from costs and will not pay a fee, according to HSE, the British counterpart to the U.S. Occupational Safety and Health Administration.

The program begins Oct. 1, subject to Parliamentary approval.

$194 Per Hour

The regulations will allow HSE to charge £124 per hour (about $193.75 US) in 2012 and 2013 to companies “found to be in material breach of health and safety law.”

A “material breach” occurs when, in the opinion of the HSE inspector, there has been a health and safety violation serious enough to merit written notification.

“HSE and the government believe it is right that businesses and organizations that break health and safety laws should pay for HSE’s time in putting matters right, investigating and taking enforcement action,” the agency said. “Without FFI, this is paid for from the public purse.”

The new policy should encourage employers “to comply in the first place or put matters right quickly when they don’t,” HSE said. “It will also discourage those who undercut their competitors by not complying with the law and putting people at risk.”

Hazard Guidance

HSE has published new, detailed guidance on how the scheme will work. A free, 36-page, downloadable booklet offers examples illustrating how the policy will be applied to a wide variety of common hazards.

“We have worked with industry representatives in shaping the final form of the scheme, and the published guidance explains how the scheme will work and what businesses can do to comply with the law and avoid incurring a fee,” said Gordon MacDonald, HSE’s program director.

“It is right that those who break the law should pay their fair share of the costs to put things right—and not the public purse. Firms who manage workplace risks properly will not pay.”

Sample violation areas include:

Confined Space: Violations might include allowing employees to work in confined spaces without understanding the risks or taking precautions; failure to have rescue equipment or procedures ready; and failure to monitor air quality during confined-space work.

Falls from Heights: Violations may include lack of supervision of workers at heights; failure to provide or inspect fall protection systems; using ersatz work areas, instead of appropriate platforms; and use of defective or broken ladders.

LPG Hazards: Potential violations include lack of a corrosion prevention program for buried pipelines and leaving combustible materials around LPG tanks.

The actual penalties to be assessed involve a complex formula that evaluates circumstances, risk analysis, enforcement expectations, dutyholder and public health analysis, and other factors.

‘Lighter Touch Approach’

The cost recovery program was proposed in March 2011 by the Department for Work and Pensions as part of a broader reform of workplace health and safety rules.

The goal of the overall initiative is to provide a “lighter touch approach” to regulation, “concentrating efforts on higher-risk industries and on tackling serious breaches of the rules,” the agency said. “We will leave those organizations which pose a lesser risk and which do the right thing for their employees free of unwarranted scrutiny.”

The program also includes a crackdown on “rogue health and safety advisers”; far fewer health and safety inspections overall; and simplified health and safety regulations and laws, the agency said.

The cost recovery program is designed to shift the expense of enforcement away from taxpayers and law-abiding businesses, the government said.

The HSE Board recommended the program to ministers in December 2011 and says it has “completed a successful test run” of the scheme.

US: Taxpayer Pays

The United States has no similar mechanism in place. Employers fined by OSHA violations pay those penalties directly to the Treasury, said OSHA spokesman Jesse Lawder.

“OSHA gets no money from fines, and no part of its budget comes from penalties assessed,” Lawder said.


Tagged categories: Accidents; Confined space; Fall protection; Health and safety; OSHA

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