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Calculating the costs of a Chain of Responsibility breach

April 7, 2016

You may have read articles or reports detailing the financial penalties imposed on companies that breached their Chain of Responsibility obligations under the Heavy Vehicle National Law (HVNL). You may have concluded that their penalties seemed fairly ‘light’.

But sometimes, the financial penalties can be just the tip of the iceberg, warns the transport legal team at Holding Redlich Lawyers.

In addition to the initial costs, anyone found guilty in court is also usually required to pay their own and the prosecution’s legal costs, which can often outweigh the fine.

But the penalties don’t always stop there.

The HVNL also provides for a range of other penalties, including:

  • Cancellation/suspension of registration;
  • Commercial benefits penalties (up to three times the amount of any commercial benefit obtained by the conduct in breach);
  • Supervisory intervention orders, such as court orders requiring you to do or refrain from doing certain things in your business;
  • Prohibition orders, prohibiting stated people from performing certain roles in the road transport sector, such as being a director or manager; and
  • Compensation orders that require you to pay for any damage to road infrastructure caused by a breach of the HVNL (think expensive tunnel or bridge damage).

So, while some organisations might consider the fine for an individual breach to be modest, the potential total cost of any breach will be far higher than that figure. It is also common for the prosecutors to collect evidence of multiple breaches before prosecuting, so the total possible fines are often multiplied.

Some things money can’t buy

Imagine the impact on your business if you had your registration suspended. What if you were banned from being a director of a company? What if the court ordered your senior managers to step down?

As we all know, ignorance is no excuse in the eyes of the law. The best way to avoid penalties is to be informed. The CoR Adviser is a monthly newsletter written by transport lawyers and industry experts who know everything there is to know about CoR obligations and the law.

Better still, it’s written in plain English and all contained in the one place. Don’t make a mistake that could cost you your livelihood. Subscribe today.