Fleet News

English legal system and its impact on fleet operators

The English legal system is complex and steeped in historical precedents built up from courts as far back as the 13th century. 

We cannot cover the subject in detail here (for that you should enrol on ICFM training), but here are a few useful tips regarding common areas that affect us as fleet operators, with specific focus on:

*   Legal aspects that affect your business

*   Legal aspects that affect employees with fleet responsibility


Common law and statute law

As a backdrop to this article, it is important that fleet operators appreciate the difference between these two. 

‘Common law’ principally refers to precedents previously established under ‘case law’ but it also refers to ‘equity’, a separate legal system.

If a ‘common law’ remedy cannot be found, by reference to previous ‘case law’, then the rules of equity may be applied and the court will consider the situation on its own merits and decide what is fair and just.

‘Statute law’ is law that is written down and codified. It begins as bills, which are either public or private, and go through a series of readings in both the House of Commons and the House of Lords before being passed.

So what does that mean to me as a fleet operator?

Let’s consider an example where a passenger was injured in a company vehicle as a result of a driver’s – and as you will see, their employer’s – negligence. 

The company driver who caused the accident was held personally liable as a result of being over the legal alcohol limit and therefore deemed to have committed a statutory offence under the Road Traffic Act, resulting in a fine and disqualification from driving. 

The company was also held to account under ‘common law’ as a result of the injured passenger claiming damages for breach of a duty of care and the ruling was that the driver and the company both had a responsibility to ensure that the passenger was transported legally and safely.

In this day and age, we would all like to think that this would not happen, but it is worth considering the implications of promoting a staff event where alcohol is present and the potential risks that result from encouraging driving, even the morning after. 

Cause and permit

This is probably one of the main areas of mis-understanding within many businesses, since infringements are all too often initiated by fleet employees simply trying to provide good advice, without realising that they are innocently breaking the law! 

The important point to make is that fleet responsible employees can be held personally accountable for ‘causing and/or permitting’ a driver of a company vehicle to undertake an action that could lead to personal injury, committing an offence or, more significantly, causing injury to a third party or damage to their vehicle or property.

It is therefore vital that advice or guidance given to drivers – whether it be verbal or in writing, does not contravene the legal position, since it can be used as evidence should an accident or injury result. Blame (in whole or in part) can be attributed to whoever was deemed to be the source of the original advice or guidance provided.

The following illustration demonstrates how this might occur:

A company vehicle driver contacts their fleet department to report a defective tyre and to ask what they should do next.  A member of the fleet team instructs the driver to take the vehicle to the nearest fast fit specialist for replacement of the defective tyre.

While travellling to the fast fit specialist, the driver is involved in an accident resulting in injury to a third party, the cause of which is subsequently partly attributed to the condition of the defective tyre.

The fleet team member could/would have been held partly/wholly responsible for the incident, since they had ‘caused or permitted’ the driver to use the vehicle knowing it to be in an unroadworthy and, thereby, unsafe condition.

It is therefore imperative that all businesses ensure that their staff induction programmes provide more than just ‘soft skills’ training and extend it to include fleet operational skill and knowledge. 

This also applies to service providers who operate ‘help desks’ and it is vitally important that all staff involved provide robust, safe and legal guidance, either in response to questions or queries received from drivers or in the interpretation of the vehicle fleet policy.

Skill and knowledge are, therefore, a critical factor and the ICFM can help here if required.


Sale of company vehicles

For most fleet operators, the sale of a motor vehicle is on a business-to-business transactional basis either with an auction house or other trade outlet. 

In either of these situations, there is little statutory regulation applicable. The parties involved can basically agree whatever terms and conditions they wish and any such provisions made will be valid between them.

However, if, as is the case with some fleet operations, vehicle sales are direct to a consumer – and this includes employees – then the legal position changes and the Competition and Markets Authority (CMA) can, potentially, become involved. The CMA is a statutory body whose main function is to keep a watch on trading matters within the UK and to protect consumers and businesses against unfair practices.

Where the fleet operator sells a vehicle in the course of their business to a private buyer, the transaction will be subject to all the statutory provisions contained within the Consumer Rights Act and any breach of these conditions may result in the fleet operator being at odds with the law, principally with Trading Standards.


The Consumer Rights Act

This legislation came into force from the beginning of October 2015 and replaced The Sale of Goods Act. It not only gives vehicle buyers more rights, it also covers ‘services’, which include servicing, maintenance and repair.

It differs from the old Act in that if the product sold fails to meet one or more of those criteria, buyers are entitled to reject the product within the first 30 days of buying it – known as the ‘early right to reject’ clause.

The Act introduces another crucial difference: defining the time period in which buyers are entitled to a refund. 

If a defect is found after 30 days, but within six months, buyers are entitled to request a repair, replacement or refund, since the law assumes the fault was there at the time of delivery, unless the seller can prove it wasn’t.     

However, the new legislation stipulates that dealers will have only one chance at repair or replacement – unless otherwise agreed. 

They cannot make repeated attempts to fix a problem and, if they fail, buyers are entitled to a full or partial refund. 

In the case of vehicles, the seller is allowed to make a ‘reasonable’ reduction in the refund to cover the amount it has been used.

After the first six months, it’s up to the purchaser to prove the fault was there at the time of delivery.


The Trade Descriptions Act 1968

We will conclude with a short summary regarding the Trade Descriptions Act 1968, which is probably the single most important consumer protection statute which operates through the criminal law and renders the fleet operator to face charges if he/she commits an offence involving a consumer. 

The main focus of the Act is directed to ‘any person’ who, in the course of a trade or business:

(a) applies a false trade description to any goods 

or (b) supplies or offers to supply any goods to which a false trade description is applied.

In either situation, ‘any person’ in the context of the Act includes limited companies and/or individual company employees e.g. the fleet manager. 

For example, in a situation where a fleet manager has applied a false trade description or sold a vehicle with a false trade description (albeit innocently), then the company as well as the individual could be found guilty of an offence. 


The fleet operator and false trade descriptions

Common areas where a fleet operator may encounter difficulties are:

*   Advertisements and sales literature

*   Statements regarding fuel consumption

*   Statements regarding vehicle condition

*   Statements regarding odometer readings


Four tips to assist with legal compliance:

Understand the legal obligations of the business and the employees involved with fleet.

Carry out routine staff checks to ensure that you have no ‘cause and permit’ exposure.

If selling vehicles to the public (including staff), be aware of the Consumer Rights Act and Trade Descriptions Act legislation.

Never assume that legal infringements only happen to other people!

Legal compliance in the world of vehicle fleet operations can be a minefield and here we have touched on just a few of the areas involved. 


Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee