Norfolk based business AgChemAccess, an international agrochemicals supplier with a workforce of about 65 people, intends to sue the HSE for around £2m in lost business.
The HSE took enforcement action on 10 July, prohibiting the company from moving any of its UK stock, as the regulator believed there was a breach of safety regulations relating to the packaging of a shipment of the herbicide glyphosate.
Nick Gooch, managing director at AgChemAccess, slammed the HSE for being too heavy-handed by imposing a blanket ban on the movement of all its products stored in two warehouses, instead of focusing on the shipment issue in isolation.
Note: Prohibition notices should focus on imminent danger and also be localised to that danger
The company sought a judicial review in the High Court but before this could be heard the HSE agreed, on the 29 August, to lift the enforcement ban.
The company’s legal fees of around £200,000 will now be met by the taxpayer, but AgChemAccess is also seeking damages for contracts lost during the eight weeks of the ban. Ten employees also lost their jobs, as a direct result of the freeze in trading, according to the firm.
“They [HSE inspectors] were told that a small amount of this product had leaked,” he explained. “They didn’t stop and ask any questions – they just ploughed on.”
“This has been absolutely disastrous for us. We have got products left in store, which we can’t sell for another year, and if it had gone on another two or three weeks, we would have gone out of business.”
“Not only have we had to shed 10 jobs, but our UK and international reputation has suffered. We have long-standing customers who have gone elsewhere because we could not deliver to them. Potential new contracts have also been lost.”
Darren Bowen, a partner at Leathes Prior Solicitors, which represents AgChemAccess, said he was surprised by the actions of the HSE inspector in this matter. He remarked:
“The HSE has an important role to play in protecting the public interest but, as demonstrated in this case, this needs to be balanced against the rights of a business to undertake its legitimate trade. I believe it is fair to say that, on this occasion, the HSE got it very wrong.”
An HSE spokesperson confirmed that there is an ongoing investigation into the activities of AgChemAccess Ltd, as well as ongoing legal proceedings being brought by the company against the HSE. The spokesperson added that, on both matters, “it would be inappropriate to comment further” at this time.
With many businesses are currently preparing for the introduction of the HSE’s Fee for Intervention (FFI) scheme, set to come into operation in just a few days on October 1st, there remain concerns from employers and lawyers about the approach inspectors will take.
Paul Verrico, principal associate at Eversheds law firm, expressed concern that there could be more incidents of regulatory exorbitance once the FFI programme is up and running, commenting:
“One of the chief complaints made by AgChemAccess was the HSE’s complete failure to engage with the company’s concerns about disproportionate use of the HSE’s powers, which effectively meant the business could not trade.
“Next month, companies will also be ineligible for defence-costs orders, even when they successfully defend a regulatory case at court and are found not guilty. This can be seen as further weakening the accountability of regulators and has led to some commentators fearing that more prosecutions could be brought in situations where a conviction is less certain.”
However, our hope is that the AgChemAccess case will help to make inspectors more appreciative of commercial realities and mindful that their actions are necessary and proportionate.
If you would like more information and access to our White Paper on FFI and how it will affect your business please use the contact us link above to request a copy.