Traffic Commissioners, finance and the rule of unintended consequences

A couple of recent appeal cases have emphasised the importance that traffic commissioners place on an operator being of the correct financial standing. It is vital that if you are called to a public inquiry or asked to produce financial evidence, you understand what is required.

In the first case, a company applied for an increase in the number of vehicles authorised for its operator’s licence. The operator failed to provide evidence that there was sufficient finance for the increase and withdrew their application. However, from the financial information which had already been sent in, the Traffic Commissioner was concerned that there was insufficient finance for the number of vehicles already authorised on the licence, asked for further financial evidence and when none was forthcoming revoked the existing licence. The appeal court held that the Traffic Commissioner was justified to call for full financial evidence in relation to the existing licence and on the facts, to revoke that licence.

The second case involved the common situation of a new licence being granted but with the common condition that further financial evidence had to be submitted within 6 months. When further financial evidence was submitted, it fell short of the required amount. The company was called to a public inquiry, where the Traffic Commissioner concluded that the company was no longer of appropriate financial standing and revoked the licence. The company appealed, one of the grounds being that the Traffic Commissioner should have considered alternative solutions to the problem of financial standing and that the Commissioner should have curtailed the licence to a level that was appropriate to the amount of money that the company had. The appeal failed; it was not for the Traffic Commissioner to take the initiative in relation to finance but for the operator to show that it had enough money available to meet the requirement for a reduced number of vehicles.

These cases highlight how important it is to seek proper legal advice. The first case shows that there can be unintended consequences from failing to supply the correct information and the second case shows that once a public inquiry is underway, there are no “second chances” to get across the right information. Many operators who are called to a public inquiry struggle to understand what they need to produce in financial evidence. There are very strict rules as to what is or is not acceptable and so it is well worth taking qualified legal advice.

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