As juries hold 3PLs responsible for carrier actions, broader insurance a necessity
In October, a US jury awarded a truck driver $15.5m in damages after he suffered what Freightwaves ...
New sentencing guidelines in the UK which propose heavier penalties for hauliers could force firms into bankruptcy, a leading transport lawyer has warned.
The recommendations to courts cover health and safety breaches and driving offences.
Vikki Woodfine, a partner at law firm DWF and lead commentator on Croner-i Road Transport, said some haulage companies could be forced to the wall by penalties of up to £4m for health and safety offences.
As well as potentially ruinous fines, companies would also bear the cost of contested cases because the Health & Safety Executive is adopting a policy of “bringing cases at the highest level of culpability” – and hence, penalty – in “the vast majority of cases”, she said.
This would push firms to argue in court for a lesser offence.
At the same time, there are tougher penalties for serious driving offences, with fines of almost twice a driver’s weekly income plus disqualification.
This may cost drivers their livelihoods and would only add to the risk of traffic commissioners calling a ‘driver conduct hearing’, threatening a company’s operating licence.
Ms Woodbine is urging the HSE to take “a fairer approach” and “a more realistic view of culpability and harm” when bringing cases to court, if it wants to reduce the number of contested cases, which also place a heavy burden on public funds.
She said: “In practice, companies now face the most impossible of dilemmas when it comes to deciding whether to defend a prosecution.
“There has always been a fine reduction when pleading guilty and this remains the case. However, given the new fine levels, there has been an increase in the number of defended cases, as companies simply cannot just accept their fate anymore, given that the guidelines expose them to potentially business-ending fines.
“The guidelines have introduced a very real fear for small and medium-sized organisations that, even if they plead guilty, may still have to pay a fine where the starting point is £250,000 or more.
“Consequently, the advice to duty holders is changing, with many companies now seeking to test the prosecution evidence before a jury. While the company runs the risk of being found guilty… the judge may place the offence into a lower bracket in the guidelines… thereby reducing the overall penalty.”
Ms Woodbine added: “We are often seeing the HSE start the vast majority of cases by saying that they are ‘high-culpability, category 1 harm’. The defence then seeks to say ‘lowc-ulpability, category 3 harm’.
“The hope then is that the judge will decide medium-culpability, category 2 harm.
“If the HSE wishes to see a reduction in contested trials, a fairer approach has to be adopted,” she argued.
However, she also warned that larger corporate logistics service providers whose driver may be involved in an incident, could find corporate revenue targeted by prosecutors.
“As the sentencing guidelines for health and safety offences have now bedded in and high fines are increasingly the norm, the next phase that will be interesting to watch from the courts is how they deal with group companies.
“It is unlikely to be long before we see a case where an attempt is made by the courts to sentence an organisation based on the turnover/financials of a “linked organisation” – the group or parent company,” she said.