Chain of Responsibility Law Changes in 2018

DISCLAIMER: The following information is intended as a general guide only and does not take your specific circumstances into account. Readers should always seek legal advice for questions relating to the Heavy Vehicle National Law and should consult the latest legislation for more detailed information.

What is Chain of Responsibility?

Chain of Responsibility laws form part of the Heavy Vehicle National Law (HVNL) and are regulated by the National Heavy Vehicle Regulator (NHVR). They are designed to ensure all parties in the supply chain share responsibility for ensuring breaches of the HVNL do not occur. This means that any party in the chain who exercises influence over certain transport activities is responsible for road safety and may be made legally liable for HVNL breaches.

Note: Although equivalent legislation exists in the respective states, the Northern Territory and Western Australia do not operate under the HVNL.

The key areas targeted by COR are:

• Speeding
• Fatigue Management
• Mass Dimension
• Load Restraint

The legislation provides wide ranging powers, which allow regulators to investigate and prosecute both along the entire supply chain and up & down individual organisations.

In practice, it means all people in the supply chain must make sure the terms of a consignment or work/employment contract will not result in, encourage, reward, or be an incentive to break any road transport law. This could be making business demands that you know will cause a breach, coercing, inducing or encouraging breaches, or passing on false or misleading information.

For example, if a driver is found to have broken the speed limit, or driven while fatigued, everyone who was responsible for requiring that driver to undertake a long journey in an unsafe manner could be prosecuted under the national law.

Amendments to Chain of Responsibility in 2018

Amendments to the Chain of Responsibility (CoR) laws will be implemented from 1 October 2018. These amendments will affect the operations of up to 165,000 Australian businesses that make up the heavy vehicle supply chain. Even if you have been operating under the COR laws for some time, businesses should reassess their responsibilities in light of these impending amendments. This should involve seeking legal advice, reviewing business practices, reviewing policies and procedures, and communicating with/training staff.

New Primary Duty

The amendments make it clear that every party in the heavy vehicle supply chain has a duty to ensure their transport activities are carried out safely. This new primary duty represents a legal obligation to eliminate or minimise potential harm and risk by doing all that is reasonably practical to ensure safety.

Reasonably practicable means something that is, or was at the time, reasonably able to be done to ensure health and safety. Businesses are expected to to consider a range of factors, including the likelihood of the risk occurring, the degree of harm, what is known about the risk, ways to remove or reduce the risk & whether they are feasible, and whether the cost of modifying is proportional to the risk.

The practical implications of the new primary duty are significant. It requires businesses to adopt a proactive and preventative outlook on safety with processes that identify, assess and control risk. To that end, businesses are being encouraged to consider the entire system that ensures safety and apply thorough risk management processes to their Heavy Vehicle operations. This means collaborating and engaging with partners and sub-contractors, integrating technology to manage key processes, monitoring operations against best practice, and reporting continuously.

New Primary Duty Penalties

Penalties and fines for COR breaches have always depended on the circumstances of the offence, however new penalties are being introduced in line with the new primary duty. These include a maximum five years imprisonment, a $300,000 fine for individuals or a $3 million fine for corporations. An outline of the primary duty penalties are listed below:

• Category 3 – breaches safety duty – $50,000 Individual; $500,000 Corporation
• Category 2 – risk of death/injury – $150,000 Individual; $1.5m Corporation
• Category 1 – recklessness – 5 years imprisonment, $300,000 Individual • $3m Corporation

Executive Officer Liability

A duty will also be imposed on executive officers to exercise due diligence to ensure that a corporation complies with its duties under the amended HVNL. A breach of this duty may result in executive officers being held personally liable. Importantly, it’s possible for executive officers to be held liable for breaching this duty, even when the corporation has not committed an actual offence.

Defences

When determining liability, the courts will ask what measures each party in the supply chain took in order to ensure a breach did not occur. What’s new in the amendments is the fact that whether an individual or a business has “done its best” to ensure compliance, will be judged in relation to what was reasonably practical for that particular business, rather than by a standardised checklist of reasonable steps.

It’s important to note that the Reasonable Steps Defence will remain the only defence under the legislation. You can only claim a reasonable steps defence if you can show that you did not know, and could not be reasonably expected to know, that a breach had occurred.

You can learn more about the coming amendments here.

Chain of Responsibility Controls

According to the NHVR, the best way to ensure COR compliance is to have safety management systems and controls in place, such as business practices, training, procedures and review processes that:

• identify, assess, evaluate, and control risk
• manage compliance with speed, fatigue, mass, dimension, loading and vehicle standards requirements through identified best practice
• involve regular reporting, including to executive officers
• document or record actions taken to manage safety

An integrated safety management system provides key benefits that can assist with HVNL compliance. These include:

• Increased safety performance
• Key analytical data for better decisions from management
• A reduction in costs through the streamlining of key processes
• Audit trails that provide a defensible position
• A way of managing your legal responsibilities
• A signal to your workers and the wider community that safety is a priority

Want to learn more about the COR amendments?

Chain of Responsibility Director, Steven Asnicar, will be presenting on the CoR reforms at Sydney’s inaugural Safety Forum in September.

Steven will explain how these new laws will effect Australian businesses, with emphasis on the legal liability and criminal prosecution aspects of the reforms. He will also discuss how businesses can improve compliance planning processes, reduce the likelihood of surprises, and improve their safety resource allocation. Learn more and register.