New WA COR laws Impact on Freight Transport Companies and Their Insurers

Western Australia’s new chain of responsibility (COR) laws have resulted in expanded risks up and down the supply chain and company hierarchy, which could present serious challenges to freight transport companies and their employers, lawyers say.

Only 3 months after the laws were enacted, a post on Fullyloaded.com.au discussed that Norton Rose Fulbright partners Jehan-Phillippe Wood and Tom Martin noted an increase in the potential for losses, claims and costs arising out of breaches of State road laws.

They explain that although the new laws don’t cover the same ground as the HVNL (Heavy Vehicle National Law), they do extend the potential for criminal prosecutions substantially. The also significantly expand the possibility of alternative enforcement action and civil claims following breaches of statutory obligations.

They also explained that together with the push to align the HVNL with work health and safety (WHS) laws could extend the application of these laws and increase penalties for breaches, even introducing a wider range of alternative enforcement measures.

The lawyers also stated:

“The experience in other states, particularly in New South Wales over the past 10 years, reveals a very significant level of enforcement activity by the prosecuting authorities in those states against interested parties, including consignors, receivers, operators and individual company directors and officers,”

Source: www.fullyloaded.com.au

The lawyers also stated that due to these changes, insurance firms could be given the chance to accrue a business opportunity for risk advice and shield strategies. They did however warn insurers to,

“review where their policies provide investigation and defence cover for alleged breaches of chain of responsibility and other health and safety laws, and consider whether risk ratings are adequate to take into account a likely increase in exposure to claims and costs”.

Source: www.fullyloaded.com.au

The lawyers highlight that the WA reforms are concentrated on the requirements for mass, dimension and load restraint (MDLR) and the provision of accurate container weight declarations (CWDs) in order to overcome overloading and problematic restraint practices.

The lawyers went on to explain:

“A key compliance risk for businesses and senior managers and operators is that deficiencies in establishing and implementing compliance assurance processes may result in multiple charges being brought against a single accused for failing to prevent mass breaches, potentially giving rise to very significant fines,”

“A successful prosecution may result in other pecuniary penalties and orders being imposed which may give rise to further significant liabilities.

Source: www.fullyloaded.com.au

The post goes on to detail what a Commercial Benefit Penalty Order would constitute. The convicted party would have to pay a fine up to 3 times the commercial benefit that was received or receivable from the commission of the offence.

A Compensation Order requires a person guilty of an MDLR offence to pay the road authority an amount determined by the court to cover damage to any road infrastructure that the road authority has incurred or is likely to incur due to the offence. For example if a bridge is damaged by a vehicle that breached height requirements, the defendant could be required to pay compensation for the damage.

The lawyers noted other available compliance measures which include:

“…directions and instructions by transport inspectors and/or police officers that could give rise to financial losses.”