For most companies, their operator’s licence is a business-critical asset and can be all too easily overlooked.
Picture the scene: you are the director of a business that holds a licence to operate large goods vehicles. Fleet operations only make up a small part of day-to-day business activities. Fleet compliance is largely left to the transport team as they are the experts. One day, the company receives a letter from the Office of the Traffic Commissioner summoning the company to a Traffic Commissioner’s Public Inquiry following an unsatisfactory compliance audit by DVSA at one of your sites. The letter specifically directs the attendance at the hearing of a board-level director of the company, along with the transport manager. The hearing is only five weeks away and this is the first you have heard of these matters.
This may seem far fetched, but unfortunately in our experience it is not at all uncommon.
Director responsibilities
When your company’s licence was applied for, and at each 5-year renewal, the application paperwork will have had to have been signed off by a company director. This is no mere administrative exercise. In signing to form the company, through its directors, is committing to ensuring that all the conditions on the company’s licence are adhered to. These are extensive and include conditions to ensure vehicles are well maintained, drivers properly managed and all other aspects of the licensing regime are complied with. This responsibility rests ultimately with the directors of the company.
Statutory Document no.6 of the Senior Traffic Commissioner Guidance states:
“Persons who control an entity which operates goods vehicles or public service vehicles must have sufficient knowledge to exercise proper oversight. In the United Kingdom directors have the same legal duties, responsibilities, and potential liabilities regardless of whether they are full-time or non-executive directors. Traffic commissioners are therefore entitled to assume that directors are all equally responsible for the management of a company and therefore equally culpable for any non-compliance.”
It can be natural for a leadership team to rely upon their qualified Transport Managers to ensure these licence conditions are met. It is important however, that directors and leadership teams are exercising internal oversight and challenge, and have enough knowledge to be able to identify activities or omissions which could place the business and its directors at risk. Sometimes, it is simply knowing the right questions to be asking.
Understanding and managing the risks
One way to address this is for directors to attend an Operator Licence Awareness Course (OLAT). The course usually only lasts a day but is intended to arm directors with the knowledge they need to exercise effective oversight.
Another way to help maintain a good overview of your operations is to ensure that your fleet maintenance records are regularly reviewed and audited and kept for a minimum period of 15 months.
When undergoing a DVSA spot-inspection, or if called to a Public Inquiry or Preliminary Hearing a company will be required to produce its vehicle maintenance records. As a director you will want to be confident that the records disclosed reflect well on the company. There are various software solutions available that can help to provide early warning of compliance concerns building.
One example is Weightmans’ in-house compliance tool: Transport Manager Comply. This standalone tool does not have to be integrated into any of your existing systems. It incorporates guidance taken from Government resources to ensure it is up to date and can be relied upon. It provides a process for the ongoing review of maintenance documents and a clear audit trail, and is designed to flag up to director level areas of non-compliance within your fleet maintenance so that these can be addressed quickly.
For most companies, their operator’s licence is a business-critical asset and can be all too easily overlooked. Understanding your licence conditions and the Traffic Commissioner regulatory regime can go a long way towards de-risking your business. At Weightmans, we deliver boardroom briefings to leadership teams on transport regulation and operator licensing responsibilities.
For more information regarding operator licences, please contact our expert transport and logistics lawyers.
