Yes they can fly above 400 feet but....
They may only fly if the flight can be made safely
They must maintain direct unaided visual contact to monitor its flight path in relation to other aircraft, persons, vehicles, vessels and structure with the purpose of avoiding collisions. i.e. the onus on collision avoidance is on them and if they cannot be reasonably assured that they will be able to do this, they should not fly the aircraft.
UAV safety notice states. You are responsible for avoiding collisions with other people or objects including aircraft...