The haulage industry facing uncertain times with regards to how it will be regulated in the future. A draft of EU proposals from its new “mobility package” have been sent back to the drawing board. While it is not entirely clear whether, in a post-Brexit world, forthcoming changes to the Driver Certificate of Professional Competence (Driver CPC) qualification will be implemented. There is also a lack of clarity with regards to how new clear air zones will be implemented within Great Britain and the effects this will have on trucks and vans along with concern over localised issues such as the Direct Vision Standard for goods vehicles in London. There are the changes in enforcement strategy being adopted by the Driver and Vehicle Standards Agency (DVSA) as well as the approach of Traffic Commissioners to the regulation of the industry, both in terms of guidance and directions as well as the approach to regulatory action at public inquiries.

In this article, Andrew Woolfall of Backhouse Jones Solicitors looks to explore some of these issues to give a better understanding of what may lie ahead in the future.

EU proposals

In May 2017, the EU Commission tabled, as part of its new “mobility package”, proposed amendments to several aspects of the way the haulage industry operates. These included changes in the weight threshold at which operator licensing and drivers’ hour regulation applied, changes to some of the drivers’ hours rules, amending the cabotage regulations and providing drivers who visit other Member States with more employment protection by looking to ensure that the visiting driver was paid at least the same minimum wage as a driver based in the new country. A great deal of debate then ensued and in the early part of 2018, as Members of the European Parliament (MEPs) became involved, we started to get more clarity. What was proposed can be described as follows:

Operator licensing

Here, there was a proposal to reduce the weight threshold for the introduction of operator licensing from 3500kg to 2400kg on vehicles which were engaged on international journeys. This would not affect domestic operations but instead was aimed at introducing some regulation to the smaller commercial vehicle market which was found to be travelling great distances across European country boundaries, undercutting traditional haulage operations. The suggestion was that van operators would have to hold operator’s licences and be able to meet the minimum criteria of good repute, financial standing, professional competence and having a nominated operating centre. There was, though, a suggestion that lower levels of financial standing would apply.

Drivers’ hours rules

As well as bringing large vans within the remit of operator licensing, the proposals included the suggestion that the same vehicles (2400kg to 3500kg gross vehicle weight), when used on international journeys, should be also made to follow the tachograph and drivers’ hours rules. As far as the hours rules themselves were concerned, the proposal included the suggestion that drivers should no longer be able to take a reduced weekly rest in the cab of their vehicle and that there could be a return to the “old style” in which the 45-minute break from driving could be taken. The proposals also looked to “speed up” the introduction of the next generation of digital tachograph which will include GPS tracking and the automatic reporting of certain infringements.

While we will see these units being rolled out in the next 12 months on new vehicles, the proposals looked to see the retrofitting of these devices on all compatible vehicles to as early as January 2020.

The posting of workers

As is said above, the EU proposals also looked to introduce new minimum wage rules for drivers visiting other countries to where they were normally based. While some schemes have already come into force in individual countries such as France and Germany, the proposal was to expand this across the EU so as to ensure that a “visiting driver” was not paid less than his or her counterpart who was permanently based in the other country. This would cover not only drivers who were stationed in a foreign country for lengthy periods of time but also drivers involved on international journeys were they were simply “visiting” the foreign country for three days or more. Operators would be required to demonstrate what and how a driver was paid.

Cabotage

The EU proposals also looked to amend the current rules which allow for three cabotage operations within seven days on an international delivery. The new proposals suggested allowing unlimited cabotage operations within five days of the international delivery. The rationale behind this was that it would allow for easier enforcement and also reduce the number of empty journeys conducted by goods vehicles, therefore saving on fuel and unproductive business.

The various proposals came before the European Parliament in June and July of this year (2018) and MEPs eventually rejected them for various reasons. Some MEPs felt the proposals were going to be too onerous while others felt that they did not go far enough. Some MEPs initially indicated their support for certain aspects of the proposals (including the rules on posting of workers to different countries) and then subsequently reversed these decisions at the last minute!

The end result is that all of the above proposals will now be sent back to the EU Parliament’s Transport Committee who will consider revisions.

What will happen to these proposals?

The “mobility package” issues are unlikely to come back before the European Parliament until the second half of 2019 and therefore the UK haulage industry can, for the immediate future, take some comfort over the fact that there will be no imminent changes.

However, there is a great deal of uncertainty as to whether, in the medium and longer terms, they will have an impact.

Post-March 2019, the UK will not have a seat at the EU table when these new proposals are discussed. We will not be able to shape how they are implemented into law. It is unclear as to whether any new proposals will be adopted in the UK on either a purely voluntary basis or as part of any trade deal. Operators should, though, bear them in mind when certainly looking to plan European operations. There may well be changes in the coming years which affect the business activities.

DVSA and enforcement action

If there is uncertainty as to what rules goods vehicle operators will have to comply with in the future, there has certainly been some more clarity issued by the DVSA as to how it will take enforcement action.

In its recently published business plan for 2018–2019, the enforcement agency has stated that it will look to make greater use of mobile technology and enforcements apps on devices such as iPhones and iPads which have now been issued to traffic and vehicle examiners. These devices will utilise new case management systems and mobile compliance tools and work in conjunction with improvements to mobile and static cameras and equipment.

A new fleet of enforcement vehicles is being rolled out across Great Britain. These cars and vans will include updated ANPR technology. Further technology being rolled out by DVSA in the coming months includes better equipment for conducting roadside emission checks on HGV’s. This links in with the recent operations targeting emission defeat devices. This all works towards the DVSA stated goals of paying more attention to those who are perceived to be non-compliant.

DVSA has also said that it intends to work with the Department for Transport on plans to bring about changes to the fixed penalty regime for serious commercial vehicle infringements. This will cover both UK and foreign operators and could potentially include the use of higher fines and increased vehicle impounding. The roadside enforcement sanctions policy has recently been updated to include the issuing of “on the spot” fines for historic drivers’ hours offences and exceeding vehicle length regulations. The potential of higher fixed penalty fines is seen as a further way to ensure compliance.

DVSA has also stated that it will also begin looking in more depth at the most serious MOT failure cases, especially where there are suggestions of serious fraud, dishonesty and negligence. Operators not only face enforcement at the roadside when their vehicle is stopped in an organised check or after an incident but also the prospect investigations where there are bad failures at the test station.

The DVSA proposals will inevitably tie in with other changes it has recently introduced, including the nationwide roll-out of the remote enforcement office as well as the earned recognition scheme. The message that is being sent is clearly that those who can demonstrate compliance will be left alone to run their business while those that are deliberately non-compliant will face greater scrutiny. Where problems are found, DVSA now appears to be less inclined to prosecute non-complaint operators and instead refer them to the Traffic Commissioner for regulatory action. This means not only a substantial costs saving to DVSA but, as can be seen below, when one takes into consideration the Traffic Commissioner’s shortened times for calling public inquiry hearings, means that operators can be dealt with a lot quicker than the criminal court process would usually allow. An operator can face being put off the road and out of business within a matter of weeks, rather than waiting months or even years, for action to be taken against the licence.

Over the course of the last 12 months, DVSA has run a number of targeted campaigns. This includes the use of “AdBlue emulators” but we are also seeing more scrutiny being given to maintenance records to uncover issues of falsification (particularly around vehicle inspection dates) and separately, investigations into drivers holding multiple cards. This recent trend is where drivers have reported to DVSA that their digital tachograph card is either lost or no longer working and have sought a replacement. The driver is then provided with a “replacement” card but in reality he or she has a second card and the driver then either works for multiple operators using the different cards or sometimes uses the multiple cards for the same operator in an attempt to confuse the tachograph analysis system into thinking that drivers’ hours breaches have not occurred. Many operators still do not run effective “missing driver” analysis reports against vehicle tachograph unit data and therefore regularly miss instances where drivers have either simply driven without a card being inserted or, alternatively, used a different version of their tachograph card.

In addition to all of the above, DVSA has also recently announced that it will start pilot programmes in Northern England focusing on load security. This follows other programmes of a similar vein in recent years but historically, DVSA has only intervened where it has been obvious signs that a load has moved or is in a dangerous condition. Under the new pilot programme, DVSA will be looking inside vehicles (and particularly curtain-sided vehicles) as part of their normal encounter routine. If issues are found — which might not otherwise be apparent from the outside — drivers will be warned, may face fixed penalties and prohibitions might be issued. The pilot is anticipated to run for three months but could then well be extended nationally and lead to changes in the enforcement procedures at the roadside for all operators.

Traffic Commissioners and public inquiries

As DVSA has taken steps to increase and strengthen its enforcement activities, the Traffic Commissioners have also seen increased activity and are looking to further change the regulation of the industry.

The Traffic Commissioner’s annual report for 2017/18 stated that the number of completed public inquiries for goods vehicles increased by 11% and while the number of cases which resulted in the revocation of an operator’s licence remained the same as in the previous year, there was a substantial increase in the number of hearings which resulted in an O-licence being curtailed or having conditions imposed upon it. There was a linked reduction on previous years in the number of hearings that led to formal warnings or where no action was taken. There was a significant increase in the number of transport managers who were disqualified. There was also a substantial increase in the number of drivers called to conduct hearings and this saw an increase, in both numbers and percentage terms, of driving entitlements that were revoked or suspended. The Traffic Commissioners’ previously stated aim or targeting the serious and serially non-compliant appears to be coming to fruition.

The Commissioners’ annual report, as referred to above, also repeats the aim that public inquiries should be listed for a full hearing within 12 weeks of the decision being made. The Commissioners aim to achieve this in 95% of cases. This means that where there are shortcomings, operators face the prospect of having little time to put systems and procedures right or make contingency arrangements. The incentive towards compliance should be greater than ever before.

The Commissioners are also looking to work more closely with other organisations to target high-risk offenders. Within the capital, the London Freight Enforcement Partnership (involving the DVSA, the Metropolitan Police and Transport for London) has resulted in 71% of targeted operators being referred to the Commissioner for consideration of regulatory action. It appears the Commissioners are keen to expand this multi-agency type approach across Great Britain to target those perceived as being non-compliant.

The new online computer system, VOL, has greatly assisted the Commissioners in targeting operators who are in financial trouble or who have not kept their details up to date with Companies House. The interplay between the VOL system and other government databases such as Companies House has seen, in the six month period following the introduction of VOL, 750 limited companies being investigated which were flagged as being either dissolved or in liquidation. Many other operators have also had letters reminding them of the need to keep information such as company directors up to date and the fact that the failure to do so is a breach of the undertakings and conditions on their operators’ licences.

At public inquiry hearings, we have seen a continuance of the traditional age-old themes of failures in maintenance and drivers’ hours systems, though it is clear that in recent months the Commissioners have “branched out” into enquiring into other areas of operations. Following recent HMRC initiatives, scrutiny is now being given to the employment status of drivers. Where a business uses self-employed drivers, questions are being asked as to whether this is a true reflection of the employment relationship or just a method to hide tax avoidance. Regulatory action is being taken where the Commissioners are not fully satisfied about the bona fides of the arrangement.

Questions are also being asked of transport managers in the context of their employment when they declare they are working more than a 48-hour weekly average. This is only facilitated by opting out of the Working Time Directive (WTD) yet the Commissioners are becoming increasingly anxious to ensure that the transport manager, who is themselves responsible for monitoring drivers’ hours compliance and safety, is both properly rested and also cognisant of safety issues. Explanations are being sought as to why the work cannot be done within the WTD time constraints.

The Senior Traffic Commissioner, Richard Turfitt, has this summer issued several consultation documents on proposed changes to the guidance and direction issued to Traffic Commissioners and their staff. The consultation recently closed and an announcement on the final changes is awaited but proposals did include reviewing the financial standing levels for restricted licence holders as well as the requirement for transport managers to be able to demonstrate how they have kept up to date with changes to legislation and best practice. Following the introduction of the Driver CPC, there have been many calls for transport managers to have to undergo regular refresher training. While the introduction of such a scheme would require legislation from Parliament, it appears that the Commissioners are proposing to introduce, in the short term, their own requirements as part of “good repute”. The suggested starting point for a transport manager wishing to establish that he or she has good repute is that they should undertake at least two days refresher training every five years. For restricted operator’s licence holders, the proposal is that this burden is moved to company directors and managers as a way of establishing “fitness”. Again, we wait to see whether this will make it into the revised guidance or direction but if implemented, it could well be a substantial change for many within the industry who have done no formal continuing professional development training since passing the CPC exams many years previously.

Summary

On the eve of the UK leaving the EU, the transport industry faces a lot of potential change. There is clearly a move within the EU Parliament to extend the regulation of commercial vehicles including looking to provide further protection for drivers through what it perceives to be positive changes to both pay and rest provisions. While these proposals might initially only involve international journeys, in due course, they could easily be applied to domestic operations as well. Just how much of an impact these changes will have in the UK remains to be seen. We do not know whether the UK Government will adopt these changes or whether they will be imposed as part of any trade deal. However, operators would be best advised to at least take them into consideration when planning business development in coming months.

In the UK, both the DVSA and the Traffic Commissioners are continuing with their stated aims of tackling those who are perceived to be non-compliant. DVSA, in its enforcement role, is utilising new technology and initiatives with a view to “catching” those who are not following best practice and bringing them before the Traffic Commissioners. For their part, the Commissioners are continuing to improve their systems and procedures to have cases dealt with more quickly and, on the face of it, it appears that public inquiry hearings are more often resulting in action being taken against the operator’s licence. Non-complaint transport managers and drivers are being removed from the industry while there is an expectation that those who stay keep up to date with any changes.

The incentive of compliance, whether through earned recognition or simply avoiding a public inquiry hearing, has never been greater and will undoubtedly continue to increase.

Last reviewed 21 August 2018