Senior Traffic Commissioner Richard Turfitt has proposed a number of changes to statutory guidance documents. For the compliant there is little to worry about but, they are worth a read nonetheless
Some changes to the Senior Traffic Commissioner’s (STC) statutory guidance are planned. A consultation into the proposals closed this week, and while there is nothing to worry compliant operators, Richard Turfitt nevertheless takes the opportunity to reinforce a number of points.
Mr Turfitt also addresses a number of issues seen recently. The proposed guidance also takes into account case law changes, and decisions made by the Upper Tribunal.
Financial standing
O-Licence holders are required to be able to show a level of financial standing according to published figures.
Merely proving that the prescribed sum is available on a particular day is insufficient. Where bank statements are used, the Upper Tribunal has approved the practice of requiring compliance over a period of three months.
Vehicles cannot form part of the calculation of available funds, the guidance states. They are not regarded as disposable assets, although property, plant and machinery can be taken into account if their sale would not affect the business’s ability to operate effectively and profitably.
Where certain other sources of funding, and particularly loan or credit agreements, are part of the financial standing calculation, TCs may make an assessment of whether that facility will actually be used and whether it is thus truly available.
The reason for that is simple, says Mr Turfitt. “Some facilities charge such a high interest rate that they are not compatible with a viable business model. They raise the issue of fair competition if an operator is allowed to rely on a large credit facility without building up a working reserve.”
TCs are thus permitted discretion in accepting or rejecting either a source of funding, or the level of reliance placed upon it.
Self-employed drivers
Self-employed drivers are addressed with a new section reflecting HMRC’s guidance on the subject. “In general, someone is self-employed if they are in business on their own account and bear the responsibility for the failure or success of that business,” the guidance states.
“Conversely, they will be employed if they personally work under the control of their engager and do not run the risks of having a business themselves.” HMRC says it is rare for a driver to be legitimately self-employed unless they own the vehicle. Legal opinion backs that up, with one transport lawyer having echoed the suggestion.
Fronting up
Guidance surrounding O-Licence applications where concerns exist over ‘fronting’ has been strengthened. Fronting is “where a person, partnership or company that does not hold an O-Licence uses the licence held by another entity to conceal the fact that they are behaving in a way that requires them to have an O-Licence of their own,” says the guidance.
TCs take fronting seriously. It is further aggravated when the entity hiding behind the legitimate front is unlikely to be granted, or is debarred from holding, an O-Licence of its own.
The guidance adds that where concerns are raised that an application could be a front, the applicant will “need to do more than make bare assertions and rely on their good character to satisfy a TC that there will be ‘clear blue water’ between it and the entity without an O-Licence.”
It continues by saying that the Upper Tribunal has given clear direction that evidence of fronting can, on its own, provide justification for deciding that the operator being used as a front has lost its repute.
Still prominent is the loaning of discs. Where a disc from another operator is displayed, “it is incumbent on the operator [displaying it] to provide a paper trail to show that its use is legitimate,” says Mr Turfitt.
“Simply relying on an assertion is not sufficient.”
Frivolity defined
A warning shot to parties that may be tempted to apply for an O-Licence despite being unable to meet all of the requirements for its granting is sounded in the proposed guidance.
The Upper Tribunal has defined an application as frivolous when “examination of the facts demonstrates a high probability of failure.”
To that, Mr Turfitt adds that the Transport Act 1981 allows a TC to make an order for costs when a party to a Public Inquiry (PI) has been responsible for frivolous, vexatious, improper or unreasonable conduct in relation to the PI.
Several further minor revisions to the guidance documents are also proposed. A review of the document relating to vocational driver conduct has not yet been undertaken and will follow later. Why it has not been published with the others is not specified.
Read the documents at bit.ly/2BQWBzJ
routeone comment
Both the Traffic Commissioners and DVSA have publicly stated that their efforts are increasingly focused on the non-compliant, allowing those operators that have their houses in order to go about their business with little, if any, intervention.
That has been welcomed by the industry as a whole, and it continues with the proposed statutory guidance update. Bluntly, the vast majority of operators have nothing to worry about.
Nevertheless, Mr Turfitt makes the point that the documents provide direction to TCs in how to discharge their duties, and they indicate the approach that a TC will adopt when exercising their regulatory powers.
Because of that, the guidance is just as important to operators as it is to TCs. Drafts of all documents including proposed changes are available online in PDF format.
