Specialist Corporate and Commercial Lawyers
Chain of Responsibility is Changing: Your Obligations under the Amended Heavy Vehicle National Law
The object of the Heavy Vehicle National Law is to nationally regulate the use of heavy vehicles (being those of more than 4.5 tonnes gross vehicle mass), with a key goal of promoting safe business practices in the trucking and logistics industry. In this article, Susan Moran, Principal of our dispute resolution team considers recent changes to the Heavy Vehicle National Law, in particular relating to the chain of responsibility.
The “chain of responsibility” (CoR) is a term referring essentially to the accountability of the parties in a heavy vehicle transportation supply chain.
The Heavy Vehicle National Law commenced in 2014 in Queensland and is applied as a law of each of each other State and Territory (sometimes with modification) except for Western Australia and the Northern Territory, along with a number of associated regulations. In NSW, the relevant parent legislation is the Heavy Vehicle National Law (NSW).
The reforms to the Heavy Vehicle National Law are occurring in a number of stages by way of a number of pieces of amending legislation.
The following are some of the key changes to be aware of:
With the introduction of a new section 26C, all parties in the chain of responsibility will be under a positive obligation to ensure the safety of their transport activities “so far as reasonably practicable” (the “Primary Duty”). This is in contrast to the standard of duty under the existing regime, where the relevant question is whether a party took “all reasonable steps” to prevent a breach occurring.
New section 26C(1) provides:
Each party in the chain of responsibility for a heavy vehicle must ensure, so far as is reasonably practicable, the safety of the party’s transport activities relating to the vehicle.
Section 26C(2) sets out a number of more specific duties on each party in the chain which are subject to the same standard of “so far as is reasonably practicable”, including, for example, a duty to eliminate public risks, and a duty to ensure their conduct does not encourage drivers to exceed a speed limit.
The adoption of this standard aligns the CoR laws with the standard of duty under relevant work health and safety legislation.
Summary:
Existing Regime
“All reasonable steps”
New Regime
“So far as is reasonably practicable”.
Under new section 26D, executives of a legal entity will be under a duty to exercise due diligence to ensure their business complies with its safety duties.
This change to a proactive requirement for due diligence exposes executives to penalties even in circumstances where the relevant legal entity has not been proceeded against or convicted of any offence.
“Due diligence” includes taking reasonable steps to:
- acquire knowledge about the safety of transport activities and keep that knowledge up to date;
- understand the entity’s transport activities and associated hazards and risks;
- ensure the entity uses appropriate resources to eliminate or minimise such hazards and risks;
- ensure the entity implements processes to eliminate or minimise such hazards and risks; to receive and respond to information about those risks and any incidents; and for complying with the duty under section 26C; and
- verify that relevant resources and processes are being used.
Summary:
Existing Regime
An executive has a defence to personal liability where a corporation commits an offence if the executive exercised “reasonable diligence” to ensure the corporation complied.
New Regime
Positive duty on executive to exercise “due diligence” to ensure their business complies with primary duty, regardless of whether the business is actually convicted of an offence.
The existing CoR obligations in relation to speed, fatigue, mass, dimension and loading are being expanded to include vehicle standards.
Summary:
Current Regime
* Speed
* Fatigue
* Mass
* Dimension
* Loading
New Regime
Addition of: * vehicle standards
The following new penalties will apply in relation to a failure to comply with a duty under section 26C:
Summary:
“Category 3” Offence: Breach of section 26C. / Maximum Penalty – Individual: $50,000 Corporation: $150,000.
“Category 2” Offence: Breach of section 26C which exposes an individual or class of individuals to risk of death, serious injury or illness. / Maximum Penalty – Individual: $150,000 Corporation: $1,500,000.
“Category 1” Offence: Engaging in conduct related to a duty under section 26C that exposes an individual to a risk of death, serious injury or illness, without reasonable excuse and recklessly as to the risk. / Maximum Penalty – Individual: $300,000 and/or 5 years imprisonment Corporation: $3,000,000.
At a time where CoR laws are undergoing significant reform, it will be crucial for all parties in the supply change to review their obligations and ensure they understand their potential exposure and how best to mitigate risks. Businesses in the heavy vehicle transport industry should undertake a thorough review of their safety policies and procedures, and shift their operational focus toward a preventative rather than responsive approach.
SWS Lawyers will be presenting on the changes to CoR later this year, to assist Hunter businesses to understand the practical implications of the reforms. Details will be confirmed over the coming weeks.
This article is not legal advice. It is intended to provide commentary and general information only. Access to this article does not entitle you to rely on it as legal advice. You should obtain formal legal advice specific to your own situation. Please contact our Litigation team if you require advice on matters covered by this article.