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    The HMRC Process For Identifying Furlough Fraud

    The Chancellor, Rishi Sunak has announced that the Furlough Scheme, which pays a percentage of an employee’s wages if they are unable to work because of a Covid-19 lockdown, will be extended until April 2021.

    According to The Guardian – “Against a backdrop of rising coronavirus cases and the return of tougher government restrictions that are expected to remain in place well into the New Year, the Treasury said it would continue to contribute 80% towards workers’ wages to give businesses and employees certainty.”

    However, despite the Furlough Scheme (officially called the Coronavirus Job Retention Scheme) being extended, a parallel project is underway to claw back money that employers should not have claimed during the first lockdown (March till May 2020).  Around £3.6 billion in furlough payments have been claimed in error throughout the year and it is estimated that £2 billion of this has been stolen by criminal gangs.  In August, a 90-day amnesty period for those who had collected excess payments was announced; however, this period has now expired.

    Several arrests have already been made in connection with furlough fraud.  The first, in July 2020 involved the fraudulent obtaining of almost £500,000.  A suspected multi-million-pound tax fraud and alleged money laundering offences were being investigated alongside the furlough fraud.  And in September 2020, an accountant and a company director were arrested following an HMRC investigation which unveiled fraud totalling £70,000.

    HMRC are following a process when investigating suspected furlough fraud.  Below is how you can protect yourself if your business comes under scrutiny.

    Steps HMRC are taking in identifying furlough fraud

    If you have received payments under the Furlough Scheme, HMRC may request information from you such as:

    • The names of employees’ who received furlough payments, the hours they worked, and how the furlough payments were calculated.
    • Evidence of the claims and payments made.
    • Details of any adjustments or corrections made to payments.

    To minimise stress, make sure you have this information readily to hand.

    If there are discrepancies or an employee informs the HMRC that furlough payments were made in error or they were asked to continue working whilst furloughed, the department may ask for further information.  Evidence may be required to show that furlough payments were necessary for the survival of the business and that your organisation complied with furlough rules.

    If HMRC makes contact you must seek legal advice immediately.  As mentioned above, much of the furlough fraud identified was orchestrated by criminal gangs.  You may discover that your business has inadvertently been caught up in a sophisticated fraud operation.  Without expert advice from a fraud lawyer, you could find yourself subject to a stressful investigation and even prosecuted for furlough fraud.

    How businesses have been inadvertently caught up in furlough fraud

    The speed in which the Furlough Scheme had to be implemented and the lack of checks around claimants made it inevitable that criminal gangs would take advantage of the system.  Furlough agents accounted for around half of claims under the Jobs Retention Scheme.  Details of these agents were likely to have been stolen, allowing fraudsters to claim large amounts under the guise of legitimate organisations.  For the first few months of the scheme, many businesses may have had their details hijacked and used to make fraudulent claims.

    A damaging fallout from this type of furlough fraud is that legitimate businesses who have unknowingly had large sums entering and exiting their company accounts may find themselves facing criminal charges.

    How to protect yourself against furlough or bounce back loan fraud

    To protect yourself from getting caught up in fraud committed against the government’s Coronavirus business support schemes you must invest time in conducting due diligence whenever you take on a new customer, supplier, investor, agent, distributor, or joint venture partner.  The level of due diligence required will depend on the risk posed by the party – a client you have had dealings with in the past is likely to require little more than the checking and recording of their identity.  However, an overseas prospect or investor who deals in large cash deposits will require far more scrutiny, preferably by a professional such as a lawyer or accountant.

    It is also essential to keep a watchful eye on your business bank accounts and investments.  Any suspicious activity should be reported via a Suspicious Activity Report (SARs).  Before doing so, it is wise to seek legal advice to ensure your best interests are protected throughout the reporting process.

    Tanveer Qureshi specialises in white-collar crime and regulatory investigations and prosecutions.  If you require legal representation, please contact Tanveer directly at tqureshi@4-5.co.uk or via his chambers, 4-5 Gray’s Inn Square. for more about Tanveer or to subscribe to his newsletters, please go to www.tqlegal.co.uk 

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      Tax Investigations and prosecutions – Post Covid – A TQ Legal Webinar

      TQ Legal is delighted to be part of this series of webinars beginning with:

      Tax Investigations and prosecutions – Post Covid

      This is a joint initiative between and The first in a series of seminars jointly presented by and .

      To hear about our upcoming webinars and get our regular TQ Legal Bulletin please sign up here.

      Tanveer Qureshi specialises in health and safety, food hygiene, and environmental law. If you require legal representation, please contact Tanveer directly at tqureshi@4-5.co.uk or via his chambers, 4-5 Gray’s Inn Square. for more about Tanveer or to subscribe to his newsletters, please go to www.tqlegal.co.uk.

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        Business Fraud: What Will Happen When the Tide Goes Out?

        Throughout economic history, financial prosperity has acted as the ultimate smokescreen for acts of business fraud. On the other side of the equation, however, once the financial tide ebbs, those same acts are left exposed for everyone to see. In the context of the COVID-19 pandemic, there is no lack of commentary suggesting that we (the world) may be heading for a deep recession, which may span 2021 and possibly beyond. If this does eventuate, what will this mean for those involved in financial fraud and other forms of white-collar crime?

        COVID-19 is pushing back the tide, and fast

        Warren Buffett once stated the oft-repeated words, “You only find out who is swimming naked when the tide goes out”. Unfortunately for many fraudsters, the COVID-19 pandemic is pushing back the tide at a rate rarely seen in modern economic times, if ever. While this rapid decline may also mean a speedy bounce-back is likely, the economic dip may be deep enough to reveal all. This will be accelerated as some global companies involved in systemic business and accounting fraud were already pushing their luck and had been partially exposed as a result. A recent Economist article outlines several examples of exactly this type of (thankfully rare) large-scale accounting fraud, including a number of Chinese companies such as Luckin Coffee and GSX which had vastly inflated their sales. They also cite other firms, such as WeWork who have just about remained on the side of the law by using Generally Accepted Accounting Principles (gaap) to make a loss in 2018 into a healthy profit.

        The COVID-19 pandemic will lift the veil on some fraudsters, but it will also drive new frauds, due in large part to desperation. It will be all too tempting for businesses struggling to survive to buy themselves some time by not being honest about the state of the books, applying for government bailout money when they do not qualify, furloughing staff who are still working, and other fraudulent practices. It may be that some will be tempted to take advantage of the situation in the belief that most business chicanery will be brushed under the rug and we will all start with a clean slate once things return to normal. But is this faulty logic?

        To predict the future we need to look at the past

        It is commonly believed that most bankers who were culpable for the 2008 financial crash evaded criminal prosecution. According to the Financial Times, 47 bankers were jailed for their role in the financial crisis. In the wash-up, serious acts of insider trading, accounting fraud, and other financial deceptions were discovered and pounced upon by the authorities. According to Channel 4, the LIBOR scandal saw at least five people sent to jail (one person was jailed for 11 years for conspiracy to defraud). It has to be said, however, that the UK took a softer stance than the US. US authorities went after those at the root cause of the financial crisis, especially in relation to mortgage mis-selling, and also those who misused government bailout money. On this latter issue, investigations by the US Special Inspector General for the Troubled Asset Relief Program (SIGTARP) into the alleged misuse of funds eventually led to 402 individuals facing criminal charges, including 97 bankers charged with fraud (including some Wall Street traders); 324 people being convicted, of whom 222 were sentenced to prison.

        Will there be a stronger appetite to bring corporate wrong-doers in the future?

        The extent to which any dishonest practices of companies and banks during the predicted financial crisis will be brought to justice will be, in part, determined by who is in power at the time. In order to investigate historical and often complex financial crimes, vast resources are required, and this requires a serious commitment by those at the top of government. With Brexit also on the horizon, it is reasonable to suggest that the government will not be robustly focused on bringing perpetrators of business fraud to justice, either during or after the immediate COVID-19 pandemic crisis, in the next twelve months. Their focus will almost certainly be elsewhere. This means it will fall to the existing oversight authorities to investigate financial crimes. The announcement by Chancellor, Rishi Sunak, in March of a £100m levy on companies to help combat money laundering, does suggest some renewed high-level commitment to tackling economic crime in the UK. The new levy is intended to be used for the implementation of new technology for law enforcement and also to hire financial investigators in line with the Economic Crime Plan unveiled by the National Crime Agency (NCA) in July 2019.

        Final words

        Whether there will be a new wave of financial crime as a result of the COVID-19 pandemic (and its economic impact) remains to be seen, however, some will undoubtedly use this as a smokescreen for financial wrongdoing, and others will be exposed for historical criminal behaviour. Brexit may also provide further cover, especially given the government will be entirely focused on planning and managing any fall-out which arises. This will leave the existing authorities to bring business criminals to justice. The extent to which they can and will depend largely on their capacity and resources to investigate in the wake of COVID-19 and Brexit. Only time will tell how successful they will be.

        Tanveer Qureshi specialises in health and safety, food hygiene, and environmental law. If you require legal representation, please contact Tanveer directly at tqureshi@4-5.co.uk or via his chambers, 4-5 Gray’s Inn Square. for more about Tanveer or to subscribe to his newsletters, please go to www.tqlegal.co.uk.

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          COVID-19: Are We Doing Enough to Protect the Health & Safety of Employees?

          Effective health and safety management has always involved a process of identifying risks and putting in place measures or mitigations to protect the safety of workers. COVID-19 is no different in this respect; all businesses, small or large, have to do what they reasonably can to control the spread of the virus. The challenge is that not only is it invisible, but the exact mechanisms behind how it spreads also are not entirely clear. This raises the key question for businesses who are looking to re-establish their operations; are we doing enough to protect workers, and are we at risk of inadvertently breaching health and safety law?

          Are businesses at risk of breaching H&S law due to COVID-19?

          All businesses are obliged to conform with the Health and Safety at Work etc. Act 1974 (HSWA) which states, ‘it shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees’. In practical terms, this means that equipment, systems, information, training, supervision, and instruction must be put in place so far as is reasonably practicable, to protect the health and safety at work of employees. It is, however, highly unlikely that HASW will be readily enforced where COVID-19 has spread within a workplace, especially given that PPE, handwashing, screening, and social distancing measures are no guarantee that the virus will not spread.

          Businesses also have a legal obligation to report significant health and safety events to the Health and Safety Executive (HSE). HSE has issued new COVID-19 specific guidance in relation to the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR), stating that reports must only be made when:

          • an unintended incident at work has led to someone’s possible or actual exposure to coronavirus. This must be reported as a dangerous occurrence.
          • a worker has been diagnosed as having COVID 19 and there is reasonable evidence that it was caused by exposure at work. This must be reported as a case of disease.
          • a worker dies as a result of occupational exposure to coronavirus.

          The key words above are ‘reasonable evidence’; how can an employer possibly know if COVID-19 was caused by workplace exposure, and not in another setting? It may only be realistically possible to infer workplace transmission where an employee is in known contact with the virus – e.g. front-line workers treating patients with COVID-19. Therefore, in the absence of a causal link for a diagnosis of COVID-19, as will be the case in most workplaces outside of healthcare, most businesses should not find themselves in breach of their reporting obligations to HSE.

          How should businesses approach COVID-19 health and safety?

          There is much that can be done to protect workers from the COVID-19 virus; extensive guidance has been published by the HSE, which recommends:

          • Identifying work activity or situations which might cause transmission of the virus, considering who could be at risk, deciding how likely it is that someone could be exposed, acting to remove the activity or situation, or if this isn’t possible, controlling the risk
          • Following sector-specific guidance
          • Reviewing where employees are located to reduce risk – including providing equipment (e.g. laptops) to facilitate home working
          • Reviewing how employees work together
          • Putting in place social distancing and hygiene measures in line with government guidance
          • Considering how the risk of exposure to COVID-19 can be reduced when commuting to and from work
          • Communicating with employees on how they can protect themselves
          • Designing work areas to mitigate risks, including using tape and signage to ensure two-metre distancing, reducing the number of staff in each area, cleaning of items touched and used by workers, overall workplace cleaning, and implementing protective screens
          • Controlling the movement of workers in the workplace (e.g. one-way movement and reducing the number of people allowed in lifts).
          • Controlling the use of common areas.
          • Ensuring good hygiene at all times
          • The use of personal protective equipment (PPE)
          • The provision of information and guidance on health and safety

          While COVID-19 poses a considerable health and safety challenge, every effort should be made to mitigate the impact on those workers who are most vulnerable. It is now clearly established that some individuals are proportionally more at risk from COVID-19, including, according to the NHS, those who:

          • have had an organ transplant
          • are having chemotherapy or antibody treatment for cancer, including immunotherapy
          • are having an intense course of radiotherapy (radical radiotherapy) for lung cancer
          • are having targeted cancer treatments that can affect the immune system (such as protein kinase inhibitors or PARP inhibitors)
          • have blood or bone marrow cancer (such as leukaemia, lymphoma or myeloma)
          • have had a bone marrow or stem cell transplant in the past six months, or are still taking an immunosuppressant medicine
          • have been told by a doctor they have a severe lung condition (such as cystic fibrosis, severe asthma or severe COPD)
          • have a condition that means they have a very high risk of getting infections (such as SCID or sickle cell)
          • are taking medicine that makes them much more likely to get infections (such as high doses of steroids)
          • have a serious heart condition and are pregnant

          It might be that those with the highest risk within your business will have to work at home, or where this is not possible due to the nature of the role, they should be offered jobs for which you can better prevent their risk of exposure to COVID-19.

          It is highly advisable to review the official government guidance on a daily basis to determine any new rules or changes in law which may relate to your business. And as a matter of standard practice, ensure that robust records (including clear contemporaneous notes) are kept in relation to your regular health and safety risk assessments. While these may never be needed, they will prove essential if your business is accused of a health and safety breach in the future.

          In conclusion

          All businesses have a duty to protect the health and safety of their workers. While it is unlikely that enforcement action by the HSE will be taken due to the spread of the virus in the workplace, every effort should be taken to protect staff, customers, and anyone else in contact with your business. Doing so will engender trust within your organisation, meaning that workers will continue to come to work in the knowledge that you are doing all you can to protect your team. Ultimately this is an unprecedented situation for modern day workplaces and businesses will be judged on how they step up to the health and safety mark.

          Tanveer Qureshi specialises in health and safety, food hygiene, and environmental law. If you require legal representation, please contact Tanveer directly at tqureshi@4-5.co.uk or via his chambers, 4-5 Gray’s Inn Square. For more about Tanveer or to subscribe to his newsletters, please go to www.tqlegal.co.uk.

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            Staying on the Right Side of the Law During the Coronavirus Pandemic

            At the time of writing (24th March 2020), the Coronavirus Bill 2019-21 has passed through the House of Commons and is due to enter the House of Lords today. If passed, it will introduce a sweeping new range of legal powers and measures. At the same time governments around the world, including that of the Isle of Man, have implemented similar laws in a desperate bid to curb and discourage behaviours which could exacerbate the spread of the killer virus. Businesses and individuals cannot afford to be complacent when it comes to Coronavirus.

            UK now on lockdown

            As most readers will be only too aware, the UK is effectively in full lockdown; a fact reaffirmed this morning when I received a text from the Government (sent to all citizens) telling me to stay at home. Last night, at 5 pm, the Government’s emergency Cobra committee implemented three new emergency Coronavirus spread prevention measures requiring:

            • People to stay at home, except for very limited purposes
            • Closing non-essential shops and community spaces
            • Stopping all gatherings of more than two people in public

            The police and other authorities will have powers to enforce the new measures through fines and forced dispersal of gatherings. Initially, the fines are expected to be £30 for any breach, but I expect the Government to increase these substantially if there continues to be widespread contravention of these new emergency laws.

            The new rules will be in place for a period of three weeks, and subject to how effective they are, they may be tightened or relaxed at that point.

            The Coronavirus Bill 2019 -21

            The Coronavirus Bill 2019-21 (the Bill) is essentially a temporary emergency toolkit which will allow the authorities to carry out actions which even only a couple of weeks ago would have felt wholly unnecessary and even draconian. We now know that such powers are going to be essential in saving as many lives as possible. The Bill introduces the following legal powers, among many others:

            New Coronavirus orders

            Magistrates courts will be able to impose Coronavirus quarantine orders on individuals if:

            • they are known to be infected or contaminated
            • the infection or contamination is one which presents or could present significant harm to human health,
            • there is a risk that the individual might infect or contaminate others, and
            • it is necessary to make the order in order to remove or reduce that risk.

            If it is believed items or premises pose a risk of passing Coronavirus on to individuals, orders can be issued to ensure that suitable action is taken, including seizing, disinfecting, destroying, or closure (in the case of property).

            Maintaining the UK food supply

            The new Bill will introduce stringent measures to make sure there is no interruption to the food supply. In order to enforce this, persons connected with the UK food supply chain will be required by law to divulge if there is a current or potential disruption. If such information is not relayed to the appropriate authority, or is misleading, a maximum fine of 1% of the company’s turnover may be levied.

            Other key measures introduced by the Bill include:

            • new powers to “restrict or prohibit events and gatherings during the pandemic in any place, vehicle, train, vessel or aircraft, any movable structure and any offshore installation and, where necessary, to close premises”
            • individuals who refuse to undergo a Coronavirus test may be fined £1,000
            • more video and audio links will be made available for criminal court proceedings – these measures are intended to avoid “adjournments and keeping business moving through the courts to help reduce delays in the administration of justice and alleviate the impact on families, victims, witnesses and defendants”.
            • new powers will enable authorities to detain potentially infectious persons for 48 hours

            The Bill spans 329 pages and as such brings in a substantial range of legal changes. While the situation is clearly urgent, authorities will need time to adapt to the new laws and to fully understand how they should be applied. In addition, it will be important that companies, employees, and members of the public understand their obligations under these new laws to ensure that they do not inadvertently find themselves in breach.

            Proposed statutory self-employment pay

            In a new development which, if successful, will bring welcome relief to over five million self-employed people across the UK, the House of Commons Public Bill Committee has now proposed a Statutory Self-Employment Pay amendment to the Coronavirus Bill.

            If accepted, “freelancers” and “self-employed people” should receive guaranteed earnings of:
            (a) 80% of their monthly net earnings, averaged over the last three years; or,
            (b) £2,917 per month
            whichever is the lower.

            The purpose of this amendment is to make the Government’ top up’ self-employed workers’ earnings to the lower of 80% of their net monthly earnings or £2,917 a month.

            Isle of Man – Man arrested for failing to self-isolate

            The Isle of Man government’s newly introduced Coronavirus emergency powers were tested this week. The new law requires all arrivals on the island to self-isolate for 14 days or face a fine of £10,000 or three months in prison. In this case, a 26-year old man, who had arrived on the island and had not self-isolated, was arrested after later handing himself to the police. The police decided not to prosecute the man.

            Adhering to health and safety now more important than ever

            In a recent radio phone-in show, I listened in horror as a man working for a large construction company informed the presenter that while his bosses were all safely working from home, he and his many colleagues were expected to carry on working on a building site with little in the way of protection from Coronavirus spread. He explained that not only had the one container of hand-sanitiser provided long been used up and not replaced, but his employer also insisted all staff still ‘clock-in’ using a fingerprint recognition device at a turn-style to enter the site – meaning that hundreds of workers are touching the same surface throughout the day. To make matters worse, the site has already seen two cases of COVID-19! Furthermore, many of the workers are self-employed and face having no income if they do not continue working in such dangerous conditions.

            It really cannot be overstated how imperative it is that health and safety laws are adhered to. Under the Personal Protective Equipment at Work Regulations 1992, all employers have a legal duty to provide suitable personal protective equipment to staff who may be “exposed to a risk to their health or safety while at work except where and to the extent that such risk has been adequately controlled by other means which are equally or more effective”. Knowingly exposing staff members to the risk of Coronavirus may lead to serious criminal prosecution including large fines or imprisonment. I would advise all businesses urgently to draw up a risk assessment to find and mitigate any Coronavirus related hazards.

            Final words

            We all have a part to play in protecting our health and that of our colleagues, family, friends, fellow citizens, and neighbours. The new powers to be introduced by the Government will need to be enforced with a rod of iron if they are to be taken seriously. It will, therefore, not be surprising to see those breaching Coronavirus related laws facing serious punishments in the coming weeks and months. You have been warned!

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              ATLAS Publishes Wind Guidance Note for Working at Height

              The latest 2019 statistics from the Health and Safety Executive (HSE) revealed that falls from heights remain the number one cause of workplace fatalities, increasing from 35 people in the previous reporting year to 40 people.   In a timely move, new working from height guidance by the Association of Technical Lightning & Access Specialists (ATLAS) was issued in July 2019, entitled, “Wind Guidance Note for Working at Height”.  ATLAS has considerable experience and expertise in this sector, having played a role in the provision of health and safety guidance to companies in the lightning protection and specialist access at height sectors since 1946.

              What is the purpose of the new ATLAS guidance?

              Regulation 4 of the Work at Height Regulations 2005 (WAHR 2005) imposes a legal duty on employers to make sure that work undertaken at height is properly planned, appropriately supervised, and practicably safe.  The ATLAS guidance was written to assist site staff, employers and clients further “understand the importance of taking wind effects into account in their everyday assessment of activities whilst working at height”, in accordance with the WAHR 2005.  Specifically, it aims to:

              • Improve the understanding of wind and its behaviour;
              • Provide an on-site point of work risk assessment, and;
              • Provide supporting information and tools for measuring wind and recording, including links to sources of further information.

              What does ATLAS guidance recommend?

              The guidance outlines a number of core concepts and considerations relating to the wind when working at height in the UK, including the following (note this is not an exhaustive list of the points made):

              • Wind gusts (rapid variations in wind speed) are higher inland and are typically 60% higher than the average (mean) wind speed; in cities, this can be up to 100% higher.
              • Northerly wind gusts are generally stronger than those from the south.
              • When assessing risks, local topological features (the changes in land surfaces such as hills, rivers, and valleys) and wind direction must be considered.
              • Account should always be taken of the effect of funnelling, whereby wind blowing between structures can cause wind in some parts of a site to accelerate, creating ‘windy corners’.
              • The lee side of buildings or structures (sheltered side) may provide protection when working from height.
              • The windchill effect should also be considered. It is important to consider the ‘feels like’ temperature on windy days, as this can cause human body temperatures to lower to dangerous levels.  When assessing this risk, it will be necessary to bear in mind the wind direction (i.e. northerly wind, especially in winter, creates lower ‘feels like’ temperature compared to the actual air temperature).
              • Site weather conditions should always be formally recorded in the site diary.

              The guidance refers to the wind code BS EN 1991-1-4:2005+A1:2010 which specifically deals with how to measure the impact of natural winds on loaded areas of buildings under construction.  The code which is intended for use by construction site managers, architects and building contractors, and those studying architecture and construction explains how the wind changes with height.  A wind speed of 10m/sec at 10m of height (classified as wind force 5 – a fresh breeze) could be 11.4m/sec at 50m and 12m/sec at 100m (both classified as wind force 6 – a strong breeze).  So while wind at ground level may be considered safe to work at height, it may not be the higher the worker goes (the HSE recommend not working on a roof if the wind is in excess of force 5 or 23 mph).

              What does the guidance recommend in respect of high wind speeds?

              The guidance makes it clear that regardless of the size of the job, responsibility lies with the individual in charge of the project, but there must be close coordination with the client.  Specialist measuring equipment such as wind-speed indicators, weather stations, and anemometers, can offer some assistance when assessing site risk and making decisions for working at height, but this is of no value for the prediction of future wind conditions.  As such, if there is a potential for high winds, continuous weather monitoring must be undertaken, including:

              • Considering the time of year and its history
              • Watching the various media and broadcasting channels for the weather forecast (in advance of work starting)
              • Using information from the site (where available)
              • Once work has started, continuous monitoring of the weather as shown on broadcasting channels and/or online data sources
              • Setting up a portable weather station either hand-held or fixed (this will be especially important if there are site restrictions on the use of mobile phones)
              • Recording findings to demonstrate that a point of work risk assessment has been carried out, and delays to job completion are justified in the interests of safety

              Final words

              Any company which requires its workers or contractors to work outside at height must establish a robust and safe system of work which takes the wind into full consideration.  The wind must be factored into all decision making from the earliest planning stages, through initial site preparations and the carrying out of work.  The HSE provides a great deal of information on ways in which workers can be made safe when working at height, including the use of personal protective equipment (PPE) such as safety harnesses with energy-absorbing lanyards attached to a suitable anchor point to arrest a fall.

              When it comes to worker safety, leave no stone unturned.  Prioritising project schedules over worker safety can lead to fatalities, near misses, severely delayed projects if investigations are required, claims for a workplace injury, and significant damage to your organisation’s reputation.

              Tanveer Qureshi specialises in health and safety, food hygiene, and environmental law.  If you require legal representation, please contact Tanveer directly at tqureshi@4-5.co.uk or via his chambers, 4-5 Gray’s Inn Square. for more about Tanveer or to subscribe to his newsletters, please go to www.tqlegal.co.uk 

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                The Health and Safety Duties of the Self Employed

                Health and safety laws and the self-employed have always led a contentious dance.  Before October 2015, those who were self-employed were obliged to manage the health and safety risk to themselves and others which could potentially arise from their work.  This applied regardless of the type of activity undertaken and the possible risk.

                Naturally, such a blanket provision, (deriving from section 3(2) of the Health and Safety at Work etc. Act 1974 (HSWA 1974), was unpopular.  Self-employed workers were forced to produce detailed risk-assessments, method statements, and ensure they had all the necessary policies and procedures in place to minimise any risks uncovered.

                Quite a burden if you were a one-person operation working on razor-thin margins.

                Although some high-risk activities justified such tight control and onerous measures, the regulations were criticised for being over-burdensome, especially when the only risk presented was that to the self-employed person themselves.

                Professor Löfstedt, in his report ‘, Reclaiming health and safety for all: An independent review of health and safety regulation’, suggested that rather than impose such a burden on businesses, self-employed people undertaking activities which posed no risk to others should be exempted from health and safety law.

                The government implemented this recommendation in the form of the Deregulation Act 2015 (DA 2015).

                How is ‘self-employed’ classified for health and safety law?

                Under the HSWA 1974, a person is self-employed if they, “work[s] for gain or reward otherwise than under a contract of employment, whether or not he himself employs others”.

                Are there any cases where a self-employed person would not be exempt from health and safety regulations under the DA 2015?

                If you have employees, you will not be exempted from health and safety compliance.  This is also the case if you undertake ‘prescribed activities’ which includes work with or on:

                • farms and agriculture, this includes all horticulture, fruit growing, seed growing, dairy farming, livestock breeding and keeping (including the management of livestock up to the point of slaughter or export from Great Britain), forestry, the use of land for grazing, market gardens and nursery grounds, and the preparation of land for agricultural use.
                • asbestos
                • construction where the Construction (Design and Management) Regulations 2015 apply
                • situations where the Gas Safety Regulations 1998 apply, i.e. landlords
                • genetically modified organisms within a research laboratory or a biotechnology production facility and not released into the environment covered by the Genetically Modified Organisms (Contained Use) Regulations 2014,
                • railways

                The tricky ‘catch-all’ provision

                Even if the work you undertake as a self-employed person does not appear on the ‘prescribed list’, you may still be subject to health and safety regulations.  A ‘catch-all’ provision which provides that any other work that may risk the health and safety of another person, i.e. a hairdresser who works with chemicals, or a technical writer producing safety manuals which will be relied on, may mean you must fully comply with health and safety laws.

                Although it seems contrary to the spirit of the DA 2015, which was enacted to cut the amount of red-tape which applied to small businesses, to protect your best interests, an assessment of your economic activities should be conducted to ensure they do not fall into the ‘catch-all’ provision.

                Ideally, the details of such an assessment should be recorded, in case you are subject to a health and Safety Executive (HSE) investigation in the future.

                Where can I go to for further advice on health and safety compliance and self-employment?

                The HSE website devotes a section to assisting self-employed people with deciphering their health and safety obligations[1].

                The main points which the HSE suggests should be considered include:

                • the location where the work activity is taking place and whether that area is accessible by others, including the public
                • the equipment and/or materials which will be used which might be inhaled or otherwise encounter others

                If the activity is taking place in an area nearby to the public or others, then it is likely that the activity may pose a risk to their health and safety.  Likewise, if the activity creates dust, fumes, sparks, or creates a trip or burn hazard, then the activity will in most cases cause a risk to the health and safety of those nearby.  In these cases, the self-employed person will have a duty under HSWA 1974, s 3(2) and must act to remove or reduce the possibility of any harm being caused.  Any failure to do so may lead to prosecution, regardless of whether any accident or injury results.

                The safest way to check whether you need to comply with health and safety regulations is to have your work practices reviewed by an experienced lawyer.  If you are being investigated for a breach, it is crucial to seek expert legal advice immediately.  Being subject to prosecution can destroy your business reputation, your finances (if convicted), and your peace of mind.  A health and safety lawyer and/or barrister can provide an emergency response to an incident, ensure your best interests are protected in an investigation and build a robust defence if prosecution/sentencing occurs.

                Tanveer Qureshi specialises in health and safety, food hygiene, and environmental law.  If you require legal representation, please contact Tanveer directly at tqureshi@4-5.co.uk or via his chambers, 4-5 Gray’s Inn Square. for more about Tanveer or to subscribe to his newsletters, please go to www.tqlegal.co.uk 

                [1] http://www.hse.gov.uk/self-employed/index.htm

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                  Coronavirus Shows Why We Need Strict Food Hygiene Regulations

                  In 2002, a coronavirus named SARS erupted in southern China, causing severe pneumonia in some victims.  It rapidly spread to other countries. It infected more than 8,000 people and killed 774.  Ten years later, MERS hit Saudi Arabia, causing and more than 850 deaths.  The latter disease still lingers in the region.

                  Now, in 2020, we have 2019-nCoV, which has, at the time of writing, led to 2,000 deaths and has infected around 74,000 people; with two patients confirmed in the UK.

                  What do these strains of coronavirus (which include the common cold) have in common?  They have leapt from animals to humans.  The first patients of the 2020 Coronavirus visited or worked at a seafood market in the Chinese city of Wuhan.  SARS was originally thought to have transferred from civet cats sold in a Chinese live animal market; however, scientists later established that the virus originated in bats who infected the cats.  Bats are also thought to have infected camels, leading to the MERS outbreak.

                  Dr Ian Lipkin of Columbia University, who assisted the World Health Organisation (WHO) and China during the SARS outbreak and advised Saudi Arabia about MERS, told the New York Times, “These wildlife markets are a risk.”

                  Indeed they are.  Bats, civets, porcupines, turtles, bamboo rats, many kinds of birds and other animals are piled together in markets such as the one in Wuhan, providing fertile ground for viruses to mutate and transfer to other species, including humans.

                  Alongside the tragic deaths and sickness caused, the latest virus stemming from an open market[1], has resulted in a storm of headlines across the world, leading to fear and the risk of panic.

                  We seldom think about the importance of food hygiene regulations.  Situations like we are experiencing at present (as I write I note that Singapore has just closed its border with China), serve as a strong reminder of how robust laws protect us.  Those who operate food manufacturing plants, restaurants, market stalls, and takeaways need to ensure they are fully aware of their duties and responsibilities under food hygiene regulations.  Otherwise, the consequences can be grave, not only for their commercial operation but for the public at large.

                  A summary of food hygiene prosecution

                  Much of the UK’s current food hygiene laws derives from the European Union and will therefore not change during the transition period which may or may not end in December 2020.

                  The two main food offences are found under sections 7 and 8 of the Food Safety Act 1990:

                  • Section 7 – Rendering food injurious to health by adding any article or substance; using any article or substance as an ingredient; abstracting any constituent; or subjecting it to any other process or treatment, with the intent that it shall be sold for human consumption
                  • Section 8 – Selling food not complying with food safety requirements.

                  ‘Injurious to health’ is broadly defined in Article 14(4) of Regulation (EC) No 178/2002 and refers to:

                  • Not only to the probable immediate and/or short-term and/or long-term effect of that food on the health of a person consuming it, but also on subsequent generations.
                  • To the probable cumulative toxic effects.
                  • To the particular health sensitivities of a specific category of consumers where the food is intended for that category of consumers.

                  Article 14(2) to (5) of Regulation (EC) 178/2002 provides that it is an offence to market a product after the expiry of its ‘use by’ date.

                  Defences to food prosecution matters

                  Both a company and individuals can be prosecuted under the Food Safety and Hygiene (England) Regulations 2013.  A statutory defence is available if the Accused can prove that they or someone under their control (such as a manager) took all reasonable precautions and exercised all due diligence to avoid the offence occurring.

                  High risk equals harsh penalties

                  The maximum sentence following conviction after trial on indictment, in the Crown Court, is an unlimited fine, two years’ custody or both.  Following summary conviction in the Magistrate’s Court, the maximum sentence is an unlimited fine.

                  The Welsh regulations provide for slightly different maximum penalties.

                  Under regulation 17(1) of the Food Hygiene (Wales) Regulations 2006, the maximum penalty following conviction on indictment is an unlimited fine, two years’ custody or both. Following summary conviction, it is an unlimited fine.

                  Under regulation 4 of the General Food Regulations 2004, the following maximum conviction on indictment is an unlimited fine, two years’ custody or both. Following summary conviction, it is an unlimited fine, six months’ custody or both.

                  If a conviction occurs, the judge will work from Sentencing Guidelines to decide a punishment.  This will include examining any aggravating and mitigating factors stemming from the Defendant’s behaviour/operations.  Therefore, even if a guilty plea is the only realistic route, your legal team will be responsible for arguing any mitigating circumstances and will seek to persuade the Court that the culpability and harm caused was low.

                  The risk of business-breaking fines cannot be underestimated.  In Ealing LBC v Bakshi unreported 16 October 2017 (MC (Ealing)), the Court gave a fine of more than £155,000 to the owner of a restaurant for several food hygiene offences under the Food Safety and Hygiene (England) Regulations 2013.  Two local authority inspections had uncovered breaches, and the restaurant had demonstrated a history of low food hygiene performance since 2009.

                  For the welfare of humanity, food safety must be prioritised by all those in food-related industries.  And only by ensuring compliance with rules and regulations will you have a statutory defence available should you face prosecution.  Although it may not be an exciting element of your work, understanding your food safety duties and responsibilities will protect your business and your customers.  And that makes good commercial sense.

                  Tanveer Qureshi specialises in health and safety, food hygiene, and environmental law.  If you require legal representation, please contact Tanveer directly at tqureshi@4-5.co.uk or via his chambers, 4-5 Gray’s Inn Square. for more about Tanveer or to subscribe to his newsletters, please go to www.tqlegal.co.uk 

                  [1] Open markets occur in other nations aside from China.

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                    Bolton Fire Highlights Ongoing High-Rise Health And Safety Issues

                    It could easily have been another Grenfell Tower. On Friday, 15 November 2019, over 100 people were forced to flee The Cube in Bolton, Greater Manchester, after a fire broke out and spread with devastating speed through the upper floors.

                    The Cube is a block of student flats. Greater Manchester Mayor, Andy Burnham, told the BBC that the cladding around the building was not the same as that which encased Grenfell Tower, where 72 people died following a blaze in 2017. However, he confirmed that the cladding on the building “causes concern and raises issues that will have to be addressed.”

                    An investigation has been launched as to why the fire ripped through the structure so fast.

                    The link between building cladding and fire

                    The catastrophic fire which destroyed Grenfell Tower in London highlighted the fire danger of certain types of cladding used on multi-storey housing buildings.

                    In 2016, £8.6 million was spent on installing exterior cladding to Grenfell Tower to improve its aesthetics and energy efficiency.

                    Contractors on the Grenfell project used aluminium composite panels with a polyethylene core (PE), manufactured under the brand name Reynobond, according to the planning application for the refurbishment.

                    Similar panels with a polyethylene core have featured in many high-rise fires around the world, including a hotel in Dubai and the Lacrosse Building in Melbourne, Australia.

                    A salesman for US-based Reynobond told The Times shortly after the fire that the version of panels used in Grenfell Tower are banned in American buildings taller than 40ft (12.2m) for fire safety reasons. “It’s because of the fire and smoke spread,” he said. “The FR [variant] is fire-resistant. The PE is just plastic.”

                    The PE version is used for small commercial buildings and petrol stations, he said, rather than for tower blocks or critical buildings such as hospitals.

                    The material used consists of insulation sandwiched between two sheets of aluminium. According to the New York Times, there had been concerns for many years that aluminium surface sheets can melt in a fire, allowing flames to burn through flammable insulation. If other protections fail and fire penetrates the cladding, “It is like you have got a high-rise building and you are encasing it in kerosene,” said Edwin Galea, director of the Fire Safety Engineering Group at the University of Greenwich. “It is insanity, pure and simple.”

                    In May 2018, following an extensive investigation, Dame Judith Hackitt, former Chair of the Health and Safety Executive, released her final independent report investigating building regulations following the Grenfell Tower fire.

                    According to Dame Hackitt, the final report confirmed that the existing regulatory system covering high-rise and complex buildings was not fit for purpose.

                    According to the report, the key issues which underpinned the system failure which led to the fire included:
                    • The fact that regulations and guidance are often ignored or misread or misinterpreted.
                    • Those undertaking building work sometimes compromise safety for speed and cost savings.
                    • It is not clear within the building industry who has ultimate compliance responsibility.
                    • There is often ineffective regulatory enforcement.

                    The report recommended a complete overhaul of the current system for residential tower blocks. The government was encouraged to set up a ‘joint competent authority’ (JCA), comprising local authority building standards, fire rescue, and the Health and Safety Executive. A system of mandatory occurrence reporting to the JCA should then be established. Non-reporting should be regarded as non-compliance and sanctions should be applied.

                    In addition, it was recommended there be a clear model of risk ownership put in place “with clear responsibilities for the Client, Designer, Contractor and Owner to demonstrate the delivery and maintenance of safe buildings, overseen and held to account by a new Joint Competent Authority (JCA)”.

                    Simplification of the regulatory framework based on outcomes rather than “prescriptive rules and complex guidance” was recommended. Incentives should be provided for those who strive to reach compliance (the majority) and heavy penalties put in place for the very few who “game the system”. By moving to an outcomes-based regulatory system, regulations and guidance can keep up as construction practices and technology advance and evolve.

                    When it comes to overseeing regulatory compliance, the report stated a risk-based approach is best, meaning complex systems designed for multiple occupancy should be subject to more oversight. The oversight employed should be proportionate to the number of people whose lives could be potentially put at risk if compliance was not adhered to.

                    The final key recommendation is that an audit trail be put in place through the life cycle of the building from “planning stage to occupation and maintenance”, to provide assurance the building was constructed safely and continues to be safe. Also, the classification and testing of the products need to undergo a radical overhaul to be clearer and more proactive. If concerns are discovered, the findings need to be made public, and if lives are deemed to be at risk, action needs to be taken.

                    These recommendations only apply to buildings of ten stories or more. Where a planning application is made for a high-risk building, the Local Planning Authority should be required by law to undertake a consultation with the JCA. The same process should apply where planning is sought for another building in the near vicinity (where such building might impact fire service access).

                    In November 2019, the government announced it had invited a selection of local authorities to become ‘early adopters’ of recommendations proposed in the Hackitt Review of building safety.

                    Lack of sprinklers

                    There was no central sprinkler system fitted in Grenfell Tower, and this is in full compliance with current regulations.

                    Regulations in England mean that only buildings constructed since 2007 and which are taller than 30 metres are required to have sprinklers fitted. This requirement wasn’t applied retroactively so Grenfell Tower, which was built in 1974, was not required to have any sprinklers to be legally compliant.
                    Building owners only need to fit sprinklers to buildings pre-dating the regulations if there is a fundamental change in how the building is used or substantial modifications made to the structure.

                    At the time of writing, 95% of social-housing blocks – home to 410,000 people – do not have any sprinkler system in place. A commission has been set up to review lowering the height of a building where sprinklers must be installed from 30 metres, or 10 storeys, to 18 metres or six storeys. However, any new rules will only apply to new-build housing blocks constructed after 2007.

                    The Sir Martin Moore-Bick Report

                    On 30 October 2019, the Chair of the Grenfell Inquiry, Sir Martin Moore-Bick, published the first phase of his report, which focused on the night of the tragedy.

                    The report stated that the spread of the fire was in two main stages. The first was the vertical spread to the top of the building. Although this was fast, it was consistent with the behaviour of similar fires.

                    The second stage involved the flames spreading horizontally across the roof and then downwards. This was not typical. Sir Martin stated that the presence of ACM cladding with a polyethylene core was the primary reason for both stages of the fire, and the cladding acted as a “source of fuel”.

                    Regarding the rapid spread of smoke throughout the structure, Sir Martin’s report stated the building “suffered a total failure of compartmentation”. There was an absence of self-closing doors and the existing doors could not contain the circulation of smoke.

                    Furthermore, and perhaps most damningly, the report concluded that it would be an “affront to common sense” to say the external building walls were compliant with building regulations, which state that the external walls should adequately resist the spread of fire, giving regard to the height, use and position of the building. Rather than containing the fire’s spread, the walls of Grenfell Tower “promoted it”.

                    Further investigations

                    The second stage of Sir Martin’s investigation and report will focus on the construction industry’s and government’s knowledge of the on the dangers of ACM cladding and why the building was deemed to meet regulatory compliance.

                    The inquiry into latest fire at Bolton may bring up separate issues which building owners need to address.

                    Private building owners who have not already done so are urged to take advice on both fire safety and if their buildings have dangerous cladding, the £200 million government fund to replace it with safer materials.

                    The Financial Times reported on 15 November 2019 that:

                    “Of 184 privately owned buildings with ACM cladding, developers, freeholders or warranty providers have agreed to pay for a total of 97 to be made safe. But just 15 of these have completed remediation work and it is only underway in another 25. The remainder can apply for government funds, but just 14 applications have been submitted ahead of the end of 2019 deadline, according to government figures released on Wednesday. That leaves between 13,300 and 17,100 households still in privately owned homes yet to be made safe, according to the government data.”

                    The Housing Secretary Robert Jenrick has threatened to name and shame private building owners who do not actively replace ACM cladding.

                    Final words

                    Being prosecuted for a fire-related health and safety offence should be taken extremely seriously. Getting the right advice from the outset can mitigate the risk of a disastrous outcome which could affect your professional and personal life for years to come.

                    Tanveer Qureshi specialises in health and safety and environment law. If you require legal representation, please contact Tanveer directly at tanveer@tqlegal.co.uk or via his chambers, 4-5 Gray’s Inn Square at tanveer@4-5.co.uk.

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                      The Fine Art of Money Laundering

                      When it comes to the mechanics of money laundering, most think of property being the primary vehicle by which international criminals turn their ill-gotten funds from illicit to legitimate. But, as much as genuine and honest art lovers and dealers would prefer it not to be true, their sector is now awash with money laundering. There is a solid reason why this is the case, as while property-related transactions are immutably recorded through history, the life journey of an artwork is often not. This, in turn, makes it incredibly easy for art to pass hands without even knowing who owns it.

                      Ideal playing ground for money laundering

                      According to Thomas Christ, a representative of the Basel Institute on Governance, a Swiss non-profit which has looked into this matter in some depth, “the art market is an ideal playing ground for money laundering.” Indeed, the Basel Institute is now at the forefront of helping dealers and auction houses to curb money laundering. One of the most renowned auction houses, Christie’s has now adopted new processes which require agents to divulge the name of the art owners they represent in order for a transaction to proceed.

                      This view is echoed by Deloitte, which believes that the art market is vulnerable to money laundering due in large part to its sheer scale and high values. They assess that the value of art and collectable assets held by ultra-high-net-worth individuals (UHNWIs) will grow to US $2.7t in 2026 (from what was US $1.6t in 2016). They also observe that terrorists readily exploit the art market to raise ‘hard cash’ by selling illegally gained antiquities (sometimes referred to as ‘blood antiquities’).

                      Free ports as an enabler of art-based money laundering

                      According to, now, PM, Boris Johnson, free ports will form part of the UK’s future customs strategy, but it is clear that the EU Parliament feels very different about such entities. Far from rushing towards a new world of free ports across the country, the EU believe they are nothing more than bastions of tax evasion and money laundering (despite having around 80 across the EU). Free ports (also called ‘free zones’) for those unfamiliar with the term are storage areas, typically located within the confines of existing ports, where high-value assets are stored on a semi-permanent basis. Luxembourg, Geneva, and Singapore all boast vast free port facilities providing highly secure, air-conditioned storage for the storage of fine wines, art, and vehicles. Some facilitate the storage of art and other valuable assets while protecting the name of the ultimate beneficial owner (UBO) (although this is not the case of the Luxembourg free port). Good stored at free ports are effectively deemed as being ‘in transit’, rather like a person at an airport between flights; this allows the owners of such items to avoid the payment of sales tax and being subject to customs duties.

                      How can art galleries protect themselves from unwittingly aiding money laundering?

                      The Fifth Anti-Money Laundering Directive (5AMLD), adopted by the European Parliament on 19 April 2018, has been designed to create a more hostile environment for those wishing to shelter criminals proceeds and assets through non-transparent structures. As such, art businesses in the UK must now act to implement processes and systems which enable the ongoing and systematic monitoring of the beneficial owner/s of artwork and ensure any proof of registration documents are kept up to date for corporate or trust owners.

                      Art businesses also need to show they have made robust efforts to understand and document the background and purpose of complex art transactions, and to determine if the nature of any business relationships involved appear suspicious.

                      Indeed, the obligations of art businesses under 5AMLD are now significantly more onerous than those under 4AMLD (the Fourth Anti-Money Laundering Directive); and we expect these only to increase with future iterations of the directive.

                      UK based art businesses can ensure they remain compliant with 5AMLD by:
                      • Putting in place a money laundering reporting officer (MLRO) whose role it is to manage any reports of potential money laundering within their business.
                      • Developing, updating and enforcing business-specific ‘anti-money laundering’ policies and procedures including for customer due diligence, record-keeping, and risk assessment.
                      • Training employees in policies, procedures and systems designed to prevent money-laundering, and ensure they know how to report suspicious activity.

                      It is also essential to make sure that your business embraces a culture of awareness and understanding when it comes to art and money laundering. This must include explaining the potential penalties for individuals and the company if money laundering is discovered. Under Section 330 of the Proceeds of Crime Act 2002 (POCA), if an individual employed by an obliged entity fails to disclose knowledge or suspicion of money laundering to an MLRO or the National Crime Agency, they may face five years’ imprisonment or an unlimited fine.

                      In summary

                      The UK is home to a vast array of honest and scrupulous art businesses, dealing with items of relatively modest value, to many hundreds of millions of pounds. Given the potential rewards for those wishing to launder money through our much-valued art sector, everyone must play their part in rejecting the interest of criminal ventures. Not only are the personal penalties too high to contemplate for anyone, but there is also much to be gained from protecting and upholding the reputation of the UK’s art sector. However, if you know or suspect you have been an unwitting party to money laundering involving art, it is imperative you seek legal guidance as soon as possible. By seeking the assistance of a Barrister specialising in defending those accused of money laundering, an effective and robust legal strategy can be drawn up which affords you the very best chance of a favourable outcome given your unique circumstances.

                      Tanveer Qureshi is a Legal 500 barrister, specialising in money laundering crime. If you require legal representation, please contact on 020 3870 3187.

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