Fleet News

Fleet legislation: Legal minefield ahead for UK fleets

LEGISLATION plays a pivotal role in fleet policies with many being introduced as a direct result of new laws pushed forward by the Government.

The coming few years will be no different and a raft of new legislation is set to alter the way operators run their fleet. Companies must ensure that policies and drivers comply with impending changes or risk being on the wrong side of the law. Here we a look at upcoming legislation, what it means for fleets and how to ensure policies are up to date.

Corporate manslaughter

THE proposed new criminal offence of corporate manslaughter, which is currently under consultation, will be applied when someone has been killed because the senior management of a corporation failed to take reasonable care for the safety of employees or others.

The new offence means police can look at a wider range of management conduct. Duncan Wilkes, managing director at RAC Business Solutions, explained: ‘The draft Bill is designed to focus responsibility on the working practice of the organisation, as set by senior managers, rather than on questions of individual gross negligence.

‘In practice, since 30% of road accidents involve company vehicles, fleets are likely to need – at a minimum – a policy document which is regularly reviewed and communicated. They will also need to carry out regular risk and competency assessments for individual drivers and ensure drivers are taught to handle their vehicles in the appropriate way.’

According to Stewart Whyte, a director at the Association of Car Fleet Operators (ACFO), fleets which have already looked at their policies and practices have nothing to fear from the impending Corporate Manslaughter Bill.

He said: ‘Fleets need to take a rational look at their policies and practices in managing on-road risks, just as they should manage all the other risk areas fleet management presents.

‘There are duty of care issues, but these arise from existing regulation and legislation, with very little added through the Corporate Manslaughter Bill.’

David Faithful, a partner with Clarke Willmott Solicitors agrees. He believes the new legislation will impact only on those fleets which have totally neglected corporate responsibility.

‘Corporate manslaughter is a damp squib, other than for those fleets who have done absolutely nothing to address work-related road safety,’ Faithful said.

‘There is no doubt, though, that the authorities such as the police will be able to use the legislation as a further ground for fully investigating what a fleet operator has done in terms of managing corporate responsibility and will target the organisation’s management structure.’

There is evidence that fleets are taking the bull by the horns with both ALD Automotive and telematics provider Quartix noting an increase in the number of companies requesting information on in-car telematics technology to help deal with new legislation.

Road pricing

ROAD charging is the current hot potato in the fleet industry and although plans for the Government to introduce a pay-as-you-go system could still be more than 10 years away, fleets are still keen to air their views.

The initiative would work by fitting black boxes into all vehicles and then using satellites to monitor their use. The cost of the technology is negotiable, but the cost of fitting Norwich Union’s current pay-as you-drive system for car insurance is about £200 per vehicle.

Clarke Willmott Solicitors’ partner David Faithful said: ‘The three or four-year replacement cycle of company cars does mean that if the manufacturers start fitting these systems on the production line, the overall cost will be less and it will be possible to capture fleet drivers within a relatively short space of time. Where this will leave cash-for-car drivers or own-vehicle business drivers is debatable. Retro-fitting may be the only option.

‘The schemes should be cost-neutral by reductions in road fund licence and fuel duty. With the likelihood that fleet drivers will be on the road at the most expensive times, I cannot see any other outcome than a significant increase in bills.’

Charges could top £1.34 per mile for busy roads during peak times and 2p per mile for less busy roads at quiet periods. Industry groups have called for the initiative to be introduced as part of a package of measures.

Duncan Wilkes of RAC Business Solutions, said: ‘We have cautiously welcomed road pricing, as the time wasted sitting in congestion grows. However, road pricing will only be acceptable if all fuel duty is scrapped as well as road tax. Businesses are likely to find new ways of working to ensure that their fleet drivers are not all on the roads at peak times.

‘With broadband becoming more cheaply available, and a growing desire to balance home and work lives, more workers are likely to switch to home working.’

Fuel

THE European Sixth Directive states that VAT on fuel can only be reclaimed if a VAT-registered company made the purchase. If an individual purchases the fuel using a private card or cash, the employer cannot reclaim VAT.

The Advocate General has asked the European Court of Justice to declare the UK in violation of the Sixth VAT Directive which will have a direct impact on fleets still using the pay and reclaim method.

Garry Hobson, managing director at Masterlease, said: ‘The European Commission ruling banning companies from claiming back VAT on business miles is set to hit businesses hard. It has implications for all companies whose employees drive for business and could cost as much as £1.2 billion a year. The options of firms are limited too. They have the choice of either losing the rebate or introducing company credit or fuel cards.’

Increasing costs may include Vehicle Excise Duty (VED), fuel duty rates and rising prices at the pumps.

Association of Car Fleet Operators director Stewart Whyte explained: ‘The consistent theme in terms of operating costs is that of the ‘polluter pays’. This almost certainly means that VED will increase, fuel duty rates will continue to rise, and with road pricing on the agenda and a possible loading for fuel-inefficient vehicles, a tight rein should be kept on car allocation policies.

‘Fleet operators must analyse the miles covered and types of vehicles driven because legislative changes will ensure costs associated with driving gas-guzzlers and high emission vehicles will continue to escalate.’

Uninsured drivers

THE problem of uninsured drivers is thought to cost the motor industry billions of pounds a year, but the problem of fleets having to pay for vehicle damage as a result of accidents with at-fault uninsured drivers could soon be coming to an end.

Uninsured drivers face a crackdown as a result of the new Serious Organised Crime Act, according to the Motor Insurers’ Bureau (MIB). The new act means that the MIB can now actively supply police forces with information about suspected uninsured vehicles. The police also have the power to seize uninsured vehicles. The Government says there are one million uninsured drivers in the UK but industry groups believe the figure is much higher. Certainly, measures to tackle the problem would be welcomed by fleet decision-makers.

Ashton West, chief executive at the MIB, said: ‘The Act will enable us to direct police towards potentially uninsured vehicles after their policies have apparently expired. If vehicle owners have not taken out insurance cover, they will stand a far greater chance of being identified and prosecuted than ever before. The UK has one of the highest levels of uninsured driving in Europe, which typically adds around £30 to the cost of premiums for honest motorists.’

Road safety bill

ALONGSIDE the introduction of the Corporate Manslaughter Bill the new Road Safety Bill, which was reintroduced to Parliament in May, is set to change fleet policies of the future.

David Wallace, director, AA Business Services, said: ‘There is a whole host of legislation set to impact on fleets, from corporate manslaughter to the Working Time Directive. However, nothing will put checking driver risk and licences more firmly at the top of the fleet agenda than the new Road Safety Bill, which has just had its second reading in the House of Lords.

‘The new Bill includes graduated speeding penalties varying from two to six points depending on the amount by which the limit is exceeded, so it could therefore be possible for a driver to lose their licence with just two offences. When this is combined with the introduction of three penalty points for using a hand-held mobile phone in the car, it means businesses will have to check licences much more frequently.’

The Bill is part of the Government’s commitment to reduce the number of people killed and seriously injured on roads by 40% by 2010. It also covers issues such as giving police more power to deal with drink-drive offenders and tougher penalties.

Other areas that could affect fleets are retraining courses for serious repeat speeding offenders, a ban on speed camera jammers and detectors, and an obligatory endorsement of three penalty points as well as a £60 fine for using a hand-held mobile phone.

Duncan Wilkes of RAC Business Solutions said: ‘The new system of variable points and fines for speeding is a significant move towards punishment fitting the crime.’

With a host of new penalties on the horizon, fleets must ensure that all policies are up to scratch and their contents are fully conveyed to drivers.

Jim Kirkwood, managing director at driver training provider DriveTech, added: ‘Fleet operators must ensure all employees driving on company business are fully conversant with the law, particularly in relation to, for example, tougher penalties for using a hand-held mobile phone and careless and inconsiderate driving as well as speeding, which could attract up to six points.’

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