Tougher Transport Laws

Penalties to Hit Harder

Recent changes to transport laws now hold more individuals and companies in the transport chain accountable for breaches.

The Heavy Vehicle National Law (HVNL) commenced in 2014 and applies in all States of Australia except Western Australia. The legislation applies to all vehicles that have a GVM (Gross Vehicle Mass) or ATM (Aggregate Trailer Mass) of more than 4.5 tonnes.

The HVNL makes complying with transport laws the responsibility of everyone in the transport chain, not just drivers and operators. This approach recognises that actions, inactions and demands made by off-the-road parties play a role in road safety.

Under the chain of responsibility provisions of the HVNL, consignors, packers, loaders, schedulers and consignees must all take reasonable steps to prevent breaches of laws in relation to mass, dimension, loading, speed and fatigue. As well, an ‘executive officer’ of any party in the chain can be responsible for a breach of the law by another party if they knowingly authorised or permitted the conduct or if they knew or ought reasonably to have known that there was a substantial risk that an offence would be committed.

The potential penalties under the legislation are significant. For example, the maximum penalty for a single offence involving a critical breach of the fatigue regulations is $15,000 for an individual and a five times multiplier (making the penalty $75,000) can be applied if the offender is a corporation. The offence of tampering with a speed limiter attracts a penalty of $10,000. Similar fines apply for offences such as severe overloading or speeding. The law also provides for heavy penalties to be imposed on parties who enter into contracts that encourage or provide an incentive for any party in the chain of responsibility to speed.

In addition to fines and penalties, the legislation gives the courts power to impose penalties that reflect the commercial benefits that an offender has derived from offences. Persistent offenders can also be subject to intervention orders and prohibition orders banning them from being involved with the transport industry for up to one year.

Our way or the Highway!

When an Insurer says, “we won’t pay” …is that the end of it?

Trucking company, Highway Hauliers Pty Ltd, had the misfortune to have two of their prime movers and trailers damaged in separate accidents. Although the trucking company held a policy to protect it against damage such as this, the insurer denied the claim.

The refusal of the insurance company was based on the fact that the respective drivers of the prime movers, at the time of the accidents, had not achieved a minimum score in a prescribed driver test, known as PAQS, which was a requirement of the policy.

The Insurer did however concede that the failure of the drivers to be PAQS certified, did not cause or contribute to the accidents and did not cause any prejudice to them. Notwithstanding that, the insurer maintained that it was entitled to rely on the requirement to deny the claim.

Section 54 of the Insurance Contracts Act 1984, came to the rescue!

The intention of Section 54 is to strike a fair balance between the interests of the insurer and the insured party. The effect is to prevent insurers from refusing to pay a claim, even though there is non-compliance of contractual requirements, provided that the non-compliance did not cause or contribute to the loss. If the non-compliance did contribute, Section 54 allows the Insurer to reduce the claim, to the extent that their interests were adversely affected.

As the insurer accepted that the failure of the drivers to obtain the required PAQS score did not cause or contribute to the accident and resulting damage, there was no prejudice to the insurer. In fact, the Court not only ruled on an award to Highway Hauliers for damage to the vehicles, they added a further $145,000 in compensation for their lost business opportunities which was a result of the insurers refusal to pay the claim.

The insurer appealed, which was dismissed. Ultimately, the insurer appealed to the High Court, raising issues used in a similar case in a different court. That appeal was upheld… but in this case, the High Court dismissed the insurers appeal.

One court says no, another says yes. Which proves there are never any guarantees when going to court, as each case will be reviewed on its own merits and situation. Consequently, you cannot rely on the outcome of this case if faced with similar circumstances.

Highways

Dangerous Places!

At 8.55pm on 5 September 2014, a prime mover and two trailers in a B-Double combination hauling over 50 tonnes of ammonium nitrate, rolled at Angellala Creek near Bakers Bend, Mitchell Highway, approximately 30 kilometres south of Charleville and 700 kilometres west of Brisbane. The load of ammonium nitrate was being transported from Gladstone, where it was manufactured, to a mine site in South Australia. The truck failed to negotiate the bridge at Angellala Creek and came to rest in the dry creek bed adjacent to the road bridge.

The driver was injured and the vehicle caught fire. Two passers-by dragged the truck driver out of the vehicle. Approximately 1 hour and 20 minutes after the accident, it appears the chemical being carried has mixed with the diesel split following the rollover, and the ensuing explosion decimated the site, destroying the prime mover and two fire fighting vehicles and causing ‘catastrophic’ structural damage to the Mitchell Highway. A crater, 12m x 6m x 6 metres deep was formed in the creek bed.

“The infrastructure damage to that road is significant,” said Assistant Fire Commissioner for the south-west region, Tom Dawson. The fact that no one was killed in the blast went ‘beyond luck’, he said.

The driver of the truck received burns to about 30 per cent of his body. Four firefighters were also injured, along with a police officer and another member of the public.

Travel Compensation Fund scrapped

Holiday plans at risk

Nothing spoils a holiday more than being stranded following the financial collapse of a travel operator. Until recently, a traveller’s problems with a travel agent or transport operator going belly-up had some protection offered by the Travel Compensation Fund. This government legislated fund compensated travellers if the operator or agent collapsed and failed to account for money paid by you the traveller.

However, this particular safety net is no more. From 30 June 2014 the Travel Compensation Fund is closed. The fund has been replaced with a series of insurance options for the prospective traveller; one of these is ‘end provider insurance’.

Choosing the right cover is important.  A possible complication is that some insurance provider organisations may suggest that two insurance covers are now required – one to cover the usual travel risks and a second to cover insolvency of the travel agent or transport operator.

Not all insurers cover insolvency; in fact some of Australia’s best known travel insurer agencies do not offer this cover so a wise traveller will select a Comprehensive Travel policy that covers both risks.

Check also that your travel policy wording includes insolvency with a limit of at least $10,000 cover for a single traveller or $20,000 cover for a family for the costs that can be incurred in rebooking or cancelling your journey.

Another tip before selecting your transport operator is to check if their name appears on the Travel Insurer’s website which lists airlines that have a history of financial stress. If you purchase an airfare with one of these stressed airlines you are not covered in the event of the airline entering receivership. These lists areregularly updated to reflect the financial status of an airline, either adding or removing airline companies as situations change.

An example was Air Australia / Strategic Airlines which became insolvent in February 2012 when the airline halted all flights and went into administration.

Your insurance broker is best placed to make sure you have the right travel insurance policy and your best chance of having that happy holiday.

 

Corporate Travel Insurance

…a better way to go

Attention business owners! Did you know that as a director of a registered business entity, a corporate travel policy is valid for both your business and your leisure travel? The cover can also include additional business executives and other employees on the move.

While many entry-level travel insurance policies contain various exclusions that can leave travellers exposed, Corporate Travel products offer comprehensive cover for the business traveller. Depending on the plan and level of cover required, most Corporate Travel Insurance policies will cover you for:

  • Emergency hospital and medical expenses (usually unlimited)
  • Medical repatriation / evacuation
  • Money
  • Replacement of lost travel documents and luggage
  • Accidental death, disability and loss of income
  • Hire car excess
  • Travel disruption, cancellations, loss of deposits
  • Lost, stolen or damaged baggage
  • Kidnap and ransom
  • Personal liability during your travel

A cost effective, single annual policy takes care of all trips by the frequent business traveller, and nominated additional travellers, within the policy period. No longer do you need to think about travel insurance every time you plan a trip. Buy once, then forget it and travel with peace of mind knowing you’re covered for just about any eventuality.

The benefits go well beyond cover offered by a retail or credit card travel policy. As well as the professional service you would expect, there are significant benefits in Corporate Travel cover including coverage for pre-existing conditions and cover for travellers over 65 years of age. Upper age limits vary from underwriter to underwriter

To obtain a quotation or further information on Corporate Travel Insurance, contact your insurance broker account manager.