Hiring and Lending Out of O-Licences
The welcome publication of the Senior Traffic Commissioner’s statutory guidance and directions documents is providing clarity and understanding on a host of areas relating to operator licensing.
One such area is the practice of lending, or hiring out, of operator licences.
In recent years there have been a few high profile cases of companies and individuals indulging in this illegal practice and the STC’s document on Good Repute and Fitness explains that scams like these will not be tolerated.
There are several scenarios in which hauliers ‘borrow’ someone else’s licence and although they may think they are not doing anything wrong, pleading ignorance is not a defence.
An example of this would be an operator who has applied for a licence but while he is waiting for it to be granted he is relying on a vehicle specified on someone else’s licence.
Another might be having a business model where you loan out your licence to partner firms while they await formal agreement from their traffic area office.
Or perhaps you are an owner driver that cannot obtain the professional competence qualification and so you get your vehicle specified on the licence of an operator who can, while still being paid and treated as a self-employed contractor to that operator.
All these scenarios are illegal and the TCs take a very dim view of the practices.
The STC’s Good Repute document refers to ‘fronting’, where a person, partnership or company which does not have an O-licence, uses one held by another entity in order to conceal the fact they are behaving in a way which requires them to possess one of their own.
“Fronting deprives the traffic commissioner of the opportunity to oversee an operator,” it explains.
“‘Fronting’ is aggravated and very much more serious where it is apparent that the entity hiding behind the legitimate ‘front’ would be unlikely to obtain or would be debarred from holding their own operator’s licence. The Upper Tribunal has given clear guidance that evidence of fronting can, on its own, provide justification for deciding that the operator being used as a ‘front’ has lost its good repute.”
The message is straightforward: until a TC agrees that you are entitled to an O-licence trading is definitely unacceptable.
For further information contact Anton Balkitis or Lucy Wood on 0800 046 3066 or visit the website if you are looking for motoring solicitors.