Crime and Regulatory roundup - July 2022
In this roundup, we consider recent developments in the health and safety space, including the increasing appetite of regulators to prosecute for risk and an update on the new Office for Environmental Protection. In light of the new Building Safety Act 2022, we also consider what this legislation means from a regulatory perspective.
Regulators’ appetite for prosecuting risk
Since the introduction of the sentencing guideline for health and safety offences in February 2016, fines involving cases where minor or no injuries have been sustained have continued to rise. We are seeing more and more examples of the Health and Safety Executive (HSE) prosecuting offenders based solely on the risk of injury, as opposed to cases that have resulted in injury.
One of the largest and most recent health and safety fines was handed to National Grid Gas plc when it was fined £4 million in addition to £91,805 in costs. The health and safety offences arose from its failure to make records available for hundreds of properties, resulting in routine safety inspections not taking place. This highlights that even if injuries do not result from such mistakes, organisations can still be subject to hefty fines.
ConocoPhillips and G4S Cash Solutions have also been fined £3 million and £1.8 million respectively even though there was no evidence of actual harm being sustained as a result of their health and safety failings. The fines were based on the assessment of the harm risked, a significant departure from the position pre-February 2016.
Organisations should therefore be alive to the fact that their assessment of and response to risk might still be subject to scrutiny even when there is no resulting accident or injury. As such, the importance of responding to near misses just as energetically as accidents should not be underestimated, as failing to do so can expose them to criminal and financial consequences as well as reputational damage.
Office for Environmental Protection (OEP)
The OEP is an entirely new regulator for the UK which has been tasked with holding the UK Government and public authorities to account in respect of their environmental duties and responsibilities. On 24 January 2022, the OEP was granted its existence in law by virtue of the Environment Act 2021.
On 23 June 2022, the OEP published its corporate plan outlining how its work “will contribute to improving the natural environment and environmental protection, including the protection of people from the effects of human activity on the environment”. On the same day, the OEP published its strategy and enforcement policy consultation report.
The OEP appears to be taking an active role with its announcement on 28 June 2022 that it is to carry out an investigation into the roles of Ofwat, the Environment Agency and the Defra Secretary of State in the regulation of combined sewer overflows in England. If failures are identified, the OEP states “our objective will be to improve regulation, leading to long term improvement in water quality.”
This is indeed an area to watch as developments unfold.
- The new watchdog: the Office for Environmental Protection
- The Environment Bill – post-Brexit Landscape for environmental regulation and enforcement
The UK Government has taken steps to improve the fire and structural building safety regime over the past few years. In short, the government is looking to strengthen the overall building safety regime in response to the tragic Grenfell Tower disaster and are doing so by amendments to existing legislation, in addition to the introduction of the Building Safety Act 2022.
The Fire Safety Act 2021
The Fire Safety Act 2021 amends the Regulatory Reform (Fire Safety) Order 2005 (the FSO) with the intention of improving fire safety in multi-occupancy domestic premises. The key changes are as follows:
- The Act provides clarification as to who is accountable for reducing the risk of fires.
- It provides that a ‘Responsible Person’ (as defined in the Act) such as the owner or manager of a multi-occupied residential building, must assess and mitigate the fire safety risk in relation to the structure and external walls of a building, and the entrance doors to individual flats and communal parts of the building.
- The fire risk assessment for the building must be updated to cover the above.
- Failure to comply with the Act could result in enforcement action being taken against the Responsible Person.
The Fire Safety Act 2021 is intended to complement the Building Safety Act 2022.
The Building Safety Act 2022
The Building Safety Act (the Act) came into force on 28 April 2022 and represents the UK Government’s efforts to introduce a strengthened regulatory regime for high-rise residential buildings (also termed as ‘higher-risk buildings’). The government is hoping that the Act will, in time, improve accountability, risk-management and assurance within the high-rise building industry.
It aims to do this by introducing the concept of duty holders in respect of the commissioning, design, construction and occupation and management of high-risk buildings. It represents a huge change for those involved at any stage of the life cycle of such a building.
The new regulators
The Building Safety Act 2022 also creates a new industry regulator known as the ‘Building Safety Regulator’. A new department of the Health and Safety Executive (HSE) will undertake that function and will have responsibility for oversight of the regulatory regime in respect of all ‘higher-risk buildings’. The regulator will:
- Implement a new, more stringent regulatory regime for high-risk residential buildings.
- Promote competence among industry professionals and regulators to raise standards in design, construction and the management of buildings.
- Oversee performance systems of all buildings, so that one regulator can provide guidance on building performance as well as building safety, ensuring that factors like countering climate change are factored into regulatory decisions.
In addition to the above, in January 2021, the Housing Secretary announced that the UK will establish a dedicated national construction products regulator within the Office for Product Safety and Standards to monitor the safety of different construction products. The move is part of the Ministry of Housing, Communities and Local Government’s wider work to address the culture within the construction industry.
This regulator will confront poor practice and provide vital market surveillance so that safety concerns can be spotted and dealt with earlier, including requiring the removal of unsafe construction products from the market and taking action against those who do not comply with the regulations.
As a consequence of these new regulators, it follows that additional regulatory enforcement will follow and therefore, regulatory claims in the construction sector are likely to rise over the coming years.
- The Building Safety Bill – factsheet
- Fire Safety Act 2021 and the “Responsible Person”
- The building and fire safety regulatory framework: new national construction products regulator