Conditions and undertakings attached to an Operator’s Licence are binding regulatory requirements. They should not be filed away once a licence has been granted or a Public Inquiry has concluded.
This is particularly important where a condition or undertaking has been imposed or given following compliance concerns. A subsequent breach may result in further regulatory action and can cause the Traffic Commissioner to question whether the operator can be trusted to comply in the future.
This article explains the difference between conditions and undertakings, why breaches are taken seriously and what operators should do to ensure they remain compliant.
What Is the Difference Between a Condition and an Undertaking?
Although conditions and undertakings can both place requirements on the way an operator runs its transport operation, there is an important distinction between them.
A condition is a requirement formally imposed on the Operator’s Licence by the Traffic Commissioner. It restricts or regulates the way in which the licence may be used and must be complied with for as long as it remains attached to the licence.
An undertaking, by contrast, is a formal promise or commitment given by the operator. It may be given as part of an application, during the life of the licence or in connection with a Public Inquiry and, once accepted, becomes a binding commitment attached to the licence.
For example, an undertaking might require an operator to arrange independent audits, provide additional training, improve maintenance arrangements or introduce enhanced monitoring of drivers’ hours.
Why Are Conditions and Undertakings Used?
Conditions and undertakings are commonly used where the Traffic Commissioner requires additional reassurance that an operator will comply with its regulatory obligations.
They may be attached when a licence is first granted or following compliance concerns or a Public Inquiry. For example, weaknesses may have been identified in maintenance, drivers’ hours controls or management oversight. Conditions or undertakings can provide a framework for addressing those weaknesses while allowing the operator to continue operating.
Where an operator has been permitted to continue on the basis of particular commitments, failing to comply with them can significantly undermine the Traffic Commissioner’s confidence in the business.
Why Is a Breach So Serious?
A breach may be more serious than the underlying compliance failure itself.
In applying the example of an operator called to a Public Inquiry because of inadequate maintenance arrangements, the operator may give an undertaking to change to a reputable maintenance provider. The Commissioner, taking that commitment into account, may decide to allow the licence to continue.
If the operator subsequently ignores the undertaking, any further Public Inquiry will consider not only the maintenance failure but also the fact that the operator gave a formal commitment and failed to honour it.
The issue may therefore become: why should the Traffic Commissioner rely upon future assurances from an operator when there has been a historical breach?
This can affect the assessment of repute and the regulatory action considered appropriate.
How Might a Breach Come to Light?
A breach of a condition or undertaking may be identified in a number of ways, including:
- a DVSA roadside encounter or investigation;
- maintenance records showing that required systems have not been implemented;
- drivers’ hours analysis identifying ineffective monitoring;
- a compliance audit identifying that an earlier undertaking has not been fulfilled; or
- information provided during another regulatory investigation.
The operator may then be called to a Public Inquiry to explain what happened.
The Traffic Commissioner is likely to consider why the requirement was originally imposed or offered, who was responsible for ensuring compliance, what monitoring took place, when the breach was identified and what the operator did about it.
What If You Discover a Breach?
Do not ignore it simply because DVSA or the Traffic Commissioner has not identified it.
A historic breach cannot be undone, but the operator can investigate what happened, identify the cause, obtain advice and take appropriate remedial action.
If the matter subsequently reaches a Public Inquiry, the Traffic Commissioner is likely to want to know when the operator became aware of the problem and what was done about it.
An operator that identifies a problem and takes prompt corrective action is in a significantly better position than one that becomes aware of a breach and allows it to continue.
The Key Message
Conditions and undertakings should be treated as live compliance obligations for as long as they remain in force. If you cannot comply you may be able to apply to either discharge it entirely or amend it so that it becomes workable.
Know what is attached to your licence, allocate responsibility for each requirement, build it into your compliance systems and retain evidence demonstrating compliance.
This is particularly important following a Public Inquiry. Where the Traffic Commissioner has allowed an operator to continue on the strength of commitments made, failing to honour them can seriously undermine confidence in the business.
If you are concerned that a condition or undertaking has been breached, have received correspondence from DVSA or the Traffic Commissioner, or are facing a Public Inquiry, C E Transport Law can advise you on your position and the steps available to protect your Operator’s Licence.
