Operators are about to see some clarification from the Senior Traffic Commissioner when it comes to the definition of vehicles "in use" and vehicles "in (the) possession" of an operator.
A recent case involving an operator being in possession of more vehicles that was declared on the licence has recently come back from the Upper Tribunal, the effects of which may well have a bearing on other hauliers.
Background
In short, the operator in question was said to be in possession of more vehicles than was declared on their licence, swapping vehicles on and off of their OL1 using the online system (VOL) as and when required. The lawyer for the operator argued that a vehicle was only "in use" when it was being driven and it was therefore possible to swap vehicles onto and off the licence, so long as the vehicles used on the road did not exceed the licence size.
The case though examined the issue of what is meant by “in possession” and vehicles “in use” and hence what vehicles are to be taken into account to ensure the operator’s licence is sufficiently large enough to satisfy the regulations.
Kevin Rooney (TC West of England) rejected the legal argument presented by the operator's lawyer and noted the significance of "operating centre capacity" and the "financial standing rules".
The basis of the financial standing regime is the ability to maintain the vehicles in possession being operated under the operator’s licence.
An operating centre must be suitable for the number of vehicles and trailers to be parked there.
Upper Tribunal
The Upper Tribunal rejected the operator's appeal against the Traffic Commissioner, stating:
“...a vehicle has been removed from the licence temporarily but is still an integral part of the business, it does not cease to be used in the business”.
When discussing the Financial Standing the tribunal stated that “an Operator has the financial wherewithal to effectively maintain and keep safe the vehicles which it is using in the business”.
It then went on to say, regarding operating centres that "the assessment of the suitability of centres would be based upon a significantly lower number of vehicles than are being realistically operated in the business and which would need to be parked at the Operating Centre.”
Possible Guidance
As a result of this appeal, it is anticipated that we are about to see some changes to the Senior Traffic Commissioner's guidance, which is likely to be adopted in full, as the following:
The number of vehicles applied for on an application should include the number required as well as any extra to cover an increase in business or emergencies such as breakdowns. A vehicle, which is utilised as a commercial vehicle for the carriage of goods for hire or reward or in connection with any trade or business, may require authority, even if it is not actually being physically driven at the time"
If a vehicle has only been removed from the licence temporarily and it remains an integral part of the business, it does not cease to be used and, therefore, must be specified
Statutory Off Road Notification (SORN) is required when an operator takes a vehicle ‘off the road’ and thereby can avoid Vehicle Excise Duty (VED) and the need to insure it. It may also be exempt from the HGV road user levy (heavy goods vehicles of 12 tonnes or more). A SORN is required whenever a vehicle is not taxed, not insured or is to be broken down for parts before being scrapped…..the Senior Traffic Commissioner has concluded that a vehicle which is the subject of a SORN does not require authority on the operator’s licence, although it may still be relevant to the capacity of the operating centre if stored at those premises
How to interpret these changes
It's likely that we are going to see some changes for operators ensuring that all vehicles in their possession, not just "in use", are to be included on an operator's licence.
However, it's advised that operators keep detailed documentation about their fleet and their purpose including details of:
newly acquired vehicles coming into service,
vehicles which are VOR and are SORN,
those coming out of the possession of the operator as they are being retired, and
O'licence exempt vehicles which may come in-scope of licencing at some point in time.