Personal or limited liability?
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Automatic licence revocations occur at a point on the scale of serious offences. But the rules apply differently to companies and individuals. Is this fair?
• The legal anomoly where convictions for serious offences lead to automatic revocation for individuals but not for companies, looks set to be removed.
The contradiction was recently illustrated at a Manchester disciplinary inquiry following a series of overloading convictions by Bolton-based operator JF Donelon (CM 13-19 Aug).
Individual
North Western Licensing Authority Martin Albu pointed out that a £2,000 fine imposed on the company by Lancaster magistrates for overloading would have automatically led to the revocation of the licence, on the grounds of repute, if it had been held by an individual, not a limited liability company.
According to Albu, the fine was classed as a level four fine, which under The Goods Vehicles (Operators' Licences, Qualifications and Fees) (Amendment) Regulations 1990, automatically meant that an individual lost his repute. But the regulations, which for the first time specified particular circumstances leading to loss of repute, did not apply to companies.
In June Scottish Licensing Authority Keith Waterworth hinted that the regulations in relation to repute were likely to be changed, in that provisions which currently appear to apply
to individuals only, would in future apply also to limited companies (CM 11-17 June).
Some of the LAs have asked the Department of Transport for a change in the law, allowing for individuals to be seen to be treated in the same way as companies. Senior Traffic Commissioner Ronald Ashford says the DTp has agreed that when it next proposes an amendment to the regulations it will consult the industry on the issue.
Although Ashford believes the law is adequate as it stands, and allows him to "treat an individual in the same way as a company", he concedes that "it could be perceived as being unfair": so he supports a possible change in the law so that it becomes "more equitable".
One of the main changes made by the amended regulations was a requirement that an LA should determine that an individual was not of good repute if he had been convicted of serious offences or repeatedly been convicted of road transport offences.
Imprisonment
A "serious" offence was defined as one attracting either imprisonment for more than three months, a fine exceeding level four (2.1,000) or a community service order. Road transport offences relate mainly to drivers' hours and rest periods, the weights and dimensions of commercial vehicles and vehicle safety.
Under Schedule 6 (Qualifications for Licence) in the Qualifications and Fees Regulations it is stipulated that LAs should know about previous convictions and anything that could
relate to fitness to hold a licence.
This stipulation effectively gives an LA discretion in deciding whether an operator met the requirement to be of good repute. However, the amended regulations require an LA to find positively that an individual is not of good repute if he has been convicted of serious offences or has been repeatedly convicted of road transport offences, thus removing any discretion.
But a company could be found not of good repute if there was a finding against its directors or transport manager that they, or any one of them, was not of good repute.
Regulations
The regulations also stipulate that an LA must determine that an individual is not of good repute, and thus revoke his 0licence, if he is repeatedly convicted of road transport offences. The exact meaning of "repeatedly" here, says lawyers, is open to question. There appears to be mounting concern among the legal profession that there is an imbalance in the law.
Transport lawyer John Backhouse says: "I would like LAs to be given back discretion and for them to look at the number and importance of convictions. The law is unnecessarily tight for individuals".
Aaron & Partners lawyer Jonathan Lawton says: "It -cannot be right that operators are treated differently merely because one is an individual and the other is a limited company." This is echoed by Ford & Warren solicitor Gary Hodgson who says "the individual is at a disadvantage compared with a company", and that the inequality needs to be resolved.
The Freight Transport Association says it would prefer LAs not to have any discretion, "so that the way they deal with a case is determined by the offence and not the trading status of the 0-licence holder".