What’s the financial cost of not managing my asbestos properly?

It is natural that if you are a business owner or landlord, you will probably be anxious to do everything possible to minimise your ongoing costs in every conceivable area. However, as part of this, it will also be crucial for you to ensure certain “savings” do not turn out to be a false economy.

This brings us neatly onto the subject of managing asbestos on premises for which you are responsible. Asbestos is a naturally occurring but now-notorious substance that was once widely used in industries such as shipbuilding and construction. The importation and use of the lethal material was only finally banned in the UK in 1999.

As a result, the material is often still present in many properties up and down the UK dating from before the year 2000. This brings an associated need for those who are responsible for such properties to manage the risk any asbestos-containing materials (ACMs) on the site might pose to human health.

The statistics tell their own story about the risk asbestos can pose when it is not properly managed. More than 5,000 deaths arising from asbestos-related disease were recorded in Great Britain in 2020, including over 2,500 deaths from mesothelioma, and a similar number of deaths due to lung cancer linked to previous asbestos exposure.

Such figures ought to give even the most “hard-headed”, cost-conscious business owner or landlord reason to pause for thought. But even if the moral imperative to do everything possible to protect human health was not a sufficient motivator for such an individual or organisation, there is also the question of the various financial costs that can arise in relation to poorly managed asbestos.

Those costs can be considerable, and serve to further underline how crucial it is for someone with a “duty to manage” asbestos under the law, to do so. Let us, then, take a closer look at the specific costs you can expect to face if you do not manage asbestos safely and responsibly on your site.

Who is responsible for preventing your exposure to asbestos?

While a lot of disparaging comment is made these days about health and safety laws that some observers perceive as overly cautious or out of date, the fact remains that such laws exist for good reasons. Health and safety laws exist to help protect people, including those who may otherwise be at risk of coming into contact with – and subsequently breathing in or ingesting – asbestos.

The horrors of curtailed human lives and devastated families left behind should indicate strongly enough how critically important it is to follow health and safety rules in relation to asbestos that might be present in buildings like yours.

In the UK, someone with responsibility for non-domestic premises where asbestos might be present should be especially mindful of the Control of Asbestos Regulations 2012, or CAR 2012.

Regulation 4 of CAR 2012 sets out that a person or organisation that has clear responsibility for maintaining or repairing given non-domestic premises – such as through an explicit agreement like a tenancy agreement or contract – will have the “duty to manage” asbestos on that site.

This person – otherwise known as the “dutyholder” – will have a duty to manage any asbestos on the site, in order to protect anyone working in or using the premises from being exposed to the asbestos, and the associated health risks of such direct contact with the material.

If, then, you are the dutyholder for a particular premises or site under CAR 2012, you will be subject to certain obligations. Those obligations will include:

• Taking reasonable steps to determine whether there are ACMs in the given premises – and if so, the location, amount, and condition of those materials
• Presuming materials on the site contain asbestos, unless there is strong evidence that this is not the case
• Maintaining, and keeping up to date, a record of the location and condition of the ACMs on the site, or the materials that are presumed to contain asbestos
• Assessing the risk of anyone being exposed to asbestos fibres from the materials identified
• Putting together a plan that outlines in detail what will be done to manage the risk the materials present
• Taking the required steps to put the plan into action.

What are the penalties for not managing asbestos properly?

A dutyholder for a commercial property who fails to put in place a plan to deal with asbestos on their premises – as well as to put that plan into action – could be risking a fine of up to £20,000, or imprisonment for up to 12 months. Serious breaches of UK asbestos regulations could lead to an unlimited fine and/or imprisonment for as long as two years.

So, how have these theoretical punishments been applied in real life? One can easily type the term “asbestos” into Google News and quickly find references to stories about various breaches of UK asbestos law, with the associated fines that were handed down.

However, let’s zoom in on one example: the September 2022 case of a Poundland store in Ipswich, as we reported on here at Oracle Solutions. This case saw the variety store chain receiving a fine of £565,000, with the company accused of a culture of not caring about the asbestos in the one-time Woolworths building on the town’s Carr Street.

In this case, the court heard that yearly surveys were carried out by experts, with advice being given to restrict access to some areas of the premises until the asbestos had been removed or sealed. However, the prosecutor said that the retailer had failed to produce a plan to manage the problem.

In the event, the chain was hit with a £565,000 fine for failings in just one of its stores. If the same failings had been discovered across a wide range of the company’s outlets, this could have made for an extremely costly experience for the entire Poundland company.

As mentioned, in Poundland’s case, the fine was so heavy despite an asbestos survey having actually been carried out. This mirrors the problem that we see with so many organisations and individuals that approach us here at Oracle Solutions; they often wrongly believe that simply having an asbestos survey undertaken is enough to ensure their compliance with asbestos regulations.

Looking back at the specific circumstances of the Poundland Ipswich store, what was not done was a site-specific asbestos management plan, and an action plan off the back of this in order to manage the risk. For that store, these additional steps would have cost less than £1,000. The required mediation work after this would have cost less than £3,000, with an outcome of greatly reduced risk and the achievement of legal compliance.

As you can see, then, even putting aside concerns about possible risks to health, the fines that can arise due to breaches of UK asbestos regulations can quickly outstrip what it would have cost the given individual or organisation to achieve compliance in the first place.

What are the average fines and payout claims for asbestos exposure?

Various sources exist to provide answers to the question of what fines and payouts might be expected in the event of breaches of the UK’s asbestos rules.

An important factor to consider here is the compensation that may be paid out to not only someone who has been exposed to asbestos, but also potentially their family, who may face a significant financial burden in looking after a loved one following their diagnosis with asbestos-related disease.

It is difficult to sum up in a few sentences how high an asbestos compensation payout might be in any given case, as there are so many factors that can impact on this. Ultimately, each case will need to be decided on the facts.

However, to give a rough guide, an especially high payout – potentially exceeding £120,000 – might be expected in the case of a young claimant who is suffering from serious pain and impairment resulting from their asbestos-related condition. A slightly lower payout – of around £90,000 – may be typical for an older claimant who has been diagnosed with lung cancer and is suffering from severe impairment.

At the other end of the spectrum of potential claimants, might be someone who suffers from constant wheezing as a result of an asbestos-related condition, but no serious impairment. In such a case, a payout closer to around £30,000 might be typical.

Looking to some of the specific asbestos-related conditions that might attract claims, one of the diseases most strongly associated with past asbestos exposure is mesothelioma. This is a type of cancer affecting the lining that covers the outer surface of some of the body’s organs.

According to a Department for Work & Pensions (DWP) report published in 2014, the average civil compensation award for occupational mesothelioma cases ranged from £137,000 to £153,531, while the average legal costs ranged from £22,000 to £28,407. These estimates used as their basis a survey of 2,334 mesothelioma claims settled between 2007 and 2012.

With regard to fines, the total cost of fines imposed by the UK Health and Safety Executive (HSE) in relation to health and safety breaches was more than £26 million in 2020/21. The average fine, meanwhile, was £145,000.

What is an asbestos management plan and how could it have helped?

As we touched on earlier in this article, an asbestos management plan is a crucial component for ensuring compliance under CAR 2012, for dutyholders seeking to manage the risk ACMs might pose on a premises for which they are responsible.

If you are the dutyholder for a given site, you will be expected to prepare a plan that provides detailed information on how the risks arising from any ACMs on the site will be managed.

Your asbestos management plan should include the following:

• Who is responsible for managing the asbestos;
• The asbestos register you have just prepared;
• The plans for working on the asbestos materials on the premises;
• The schedule for monitoring the condition of the materials; and
• Letting people know about the decisions you make.

If such an asbestos management plan had been in place for the Poundland Ipswich building, this could have helped to ensure all relevant stakeholders were suitably informed about the asbestos risks on the premises, and the steps being taken to manage those risks. As a result, anyone liable to come across the materials in question would have been better able to minimise the chances of disturbing any asbestos, which can cause the dangerous release of asbestos fibres.

What should you do next to stay compliant with asbestos regulations?

Are you keen to ensure that you take every necessary step to achieve compliance with the current UK asbestos regulations, as someone who is seeking to manage ACMs on a site for which you are responsible? If so, you may understandably be unsure what your next steps should be.

Here at Oracle Solutions, our accredited asbestos consultants are on hand to advise, and we can provide competitively priced asbestos management services to help ensure you achieve – and maintain – compliance.

Simply call our team today, or send us an email, to learn more about our asbestos services and to receive a fast and free quote.