Rules on o-licence lending

Chris Tindall
August 26, 2024

A cluster of recent cases heard at public inquiries (PIs) has highlighted the illegal practice of O-licence lending and fronting, despite the significant risks to an operator’s existence.

The senior traffic commissioner’s (TC) statutory documents make clear the seriousness of the matter. “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 O-licence,” statutory document 1 states.

“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.”

Recent cases include that of SS Green Transport, whose application was refused over concerns that it could act as a front for a revoked business operated by the applicant’s father (CM 14 March); Steve Mark Price, who had his O-licence revoked after he admitted he had lent his licence to AJB Skip Hire (CM 7 March); and Stain Plant, which had its transport manager disqualified for three years after he allowed a revoked operator to continue running an HGV specified on its licence for 14 months (CM 1 February).

“There is a general conception, which I think is accurate, that criminal activity tends to follow the economic trend,” says Charlotte Hunt, associate, regulatory and corporate defence, Birketts solicitors.

“Given the cost of living crisis, it would not be a surprise if it followed that licence lending was on the increase, particularly as smaller operators face tighter margins and increased cost pressures.

“The DVSA and TCs have long focused on taking action against non-compliant operators and the recent cases are not novel or new in the circumstances or action taken.”

She adds: “Logic would dictate that as technology advances, for example with increased use of ANPR, it becomes easier to detect those who might not be operating compliantly, and therefore, because it might be easier to detect, more cases are coming through.”

In the case of Stain Plant, transport manager Brian Stain claimed he was unaware he could not specify a vehicle on its licence that was operated by a company whose own licence had been revoked.

“By facilitating the continuance in operation of a company whose O-licence had been revoked, Mr. Stain has frustrated the whole purpose of the regulatory system,” said deputy TC Nicholas Denton.

“Whether through a deliberate act or, as Mr. Stain claims, gross ignorance, this lending of the licence is not the conduct of a reputable and competent transport manager.”

Hunt says it is a long-established legal principle that ignorance is no defence in criminal law, but she adds: “If there was an honestly held belief or a person was naïve to the requirements, while this is not a defence, it could be useful mitigation when assessing the seriousness of a case, for example submitting it was not committed intentionally or with the intention to deceive.

“When considering regulatory action for those accused of lending their licence, a TC will assess a number of considerations, including whether there were any deliberate or reckless acts that led to an undue risk to road safety or unfair commercial advantage.

“It is common in law for recklessness to not be subjective, and therefore what the accused foresaw themselves, but with an objective element. And also whether it would have been obvious to a reasonable person,” Hunt says.

In each of the three PI cases referred to above, the outcomes were different. SS Green’s application did not get off the ground, but while Price had his licence revoked, Stain Plant’s was curtailed for 28 days.

Hunt says each case before a TC turns on its own merits. “The operator licensing scheme aims to ensure road safety and fair competition,” she says.

“Going behind that scheme and licence lending impacts both, so vehicles could be operated in an unsafe condition and anti-competitively. Consequences for operators are often significant where licence lending has been found.

“Each case will have its own circumstances and considerations from which the TC will reach their determination.

“O-licences are not transferable, and discs should never be shared with other businesses – even if there is a margin.

“For those operating outside the operator licensing scheme, the TC cannot take direct regulatory action against them. Instead, they risk being prosecuted in a criminal court and having the vehicle impounded.”

 - This article was previoulsy published in Commercial Motor, to subscribe see the latest Commercial Motor subscription offer

About the Author

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Chris Tindall

Chris Tindall started writing for the haulage and logistics industry in 2002 and has covered a broad range of significant issues, including GPS jamming by criminals, platooning and Brexit.

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