Continuing confusion as to the date by which payment must be made for a licence to be renewed for a further five-year period means operators run the risk of their Operator’s Licence lapsing, with the consequence of not being able to operate vehicles lawfully until any new licence is granted. At Woodfines Solicitors, our road transport team continues to see cases like these.
Why the confusion?
The problem arises because Operator’s Licences make reference to the dates from which they are in force and also the date of the next review, being the date the licence came into force five years later. This can lead to operators believing that the renewal payment deadline is that date. However, it is not.
So where is the date specified?
The Operator's Licence does not itself set out the date by which payment must be made to renew the licence. The Goods Vehicles (Licensing of Operators) (Fees) Regulations 1995 sets out that the date by which payment must be made is before the end of the month preceding the expiry of five years after the issue date or the most recent five-year anniversary of that date, whichever comes later.
In short, the continuation fee has to be paid by the end of the month preceding the month in which the fifth anniversary of the licence commencement takes place.
Accordingly, the licence may have on it a review date of, say, 25 February 2015 but the continuation fee will have to be paid by the end of January 2015. The Office of the Traffic Commissioner sends out renewal letters but, of course, these letters can go astray in the post on trading estates where they are delivered to the wrong business or internally.
What happens if an operator licence lapses?
If a licence lapses there is no regime for late payments e.g. a penalty surcharge - only in exceptional circumstances will Traffic Commissioners review a case and remove any licence termination. The effect of a lapsed licence could be absolutely disastrous for a business that relies on it - lorries or coaches/buses simply cannot be lawfully operated without it. Subcontracted transport may have to be arranged at huge cost. Delivery times and schedules, not to mention customer goodwill, are in jeopardy.
In an important decided case last year, the Upper Tribunal observed that DVSA guides do not make clear the significance of ‘pay-by’ and ‘review’ dates and the current guidance was held to be confusing to operators. However, nothing concrete appears to have been done to address this issue to help operators deal with this.
Don't rely on a reminder letter - set your own reminders
It is vital, therefore, that every holder of an Operator's Licence remembers to set up a reminder in their diary to ensure that payment is made in good time and if no renewal letter has been received from the Office of the Traffic Commissioner in Leeds, then this is chased up. Operators should not rely on renewal letters as reminders. Relevant directors, transport managers and other staff need to be aware of this date.
Mistakes and blunders of this nature can and do arise frequently, regardless of shape or size of business. Don't let it be your business!