Paula Swain, partner at law firm Shoosmiths, warns that failure to prepare carefully in cases where financed vehicles have been seized for improper use could lead to an unwelcome decision at the adversarial impounding hearing
Traffic Commissioners for Great Britain has updated guidance which will assist lease and finance companies trying to recover impounded vehicles.
Traffic Commissioners for Great Britain is responsible for licensing and regulating operators of heavy goods vehicles, buses and coaches. They also cover vehicles, such as limousines, which are used for hire or reward, and which are adapted to carry more than eight passengers, or if not so adapted are used in the course of a business for carrying passengers who are charged separate fares.
Motor finance companies may have customers where this is a relevant consideration. You can use the Driver and Vehicle Standards Agency’s publications search to check vehicle operator licensing details at: gov.uk/check-vehicle-operator-licence-applications.
A traffic commissioner presides over a tribunal and they operate as a non-departmental public body, sponsored by the Department for Transport. They are set up regionally and cover the following regions: North West, North East, West, East, South East, Wales and West Midlands, and Scotland.
Various regulations allow for the detention and disposal of vehicles, which are not being operated legally (for example, without an operator’s licence). The regulations also provide the opportunity for you to apply (in a specified manner) to a traffic commissioner for the return of your vehicle. You will usually have a period of at least 21 days from the date of publication in The London Gazette, or separate notice to you, to make your application.
The commissioner will hold a hearing about your application. Please beware that the hearing is an adversarial process and you are entitled to give evidence, to call witnesses, to cross-examine witnesses and to address the traffic commissioner both on the evidence and generally. You will need to prepare carefully and ideally obtain legal advice.
The burden of satisfying the traffic commissioner that the vehicle should be returned is on you. You must establish that you had no knowledge of the contravention at the time when the vehicle had been used, whenever that was and whether such use was at the time of detention or on some earlier occasion.
What constitutes knowledge is beyond the scope of the length of this article but very briefly, and not exhaustively, the commissioner will consider a key question. That question is: “Has the claimant satisfied me that he, she or it probably did not know that the vehicle was being or had been used in contravention of …the Act?”
The law and guidance around this question is extensive, and each case is considered on its merits, but the likely success of your application could well hinge on your ability to handle this question. Your processes and your enquiries both before and after contracting with your customer will be under scrutiny and it’s possible that members of your team will need to give first-hand evidence about those processes and enquiries. The investigative nature of a hearing before a commissioner can feel very different to a courtroom. A commissioner will most likely be actively involved in trying to elicit and understand evidence before him or her.
The case of Société Générale Equipment Finance Limited v VOSA 2013 states the importance of investing in your knowledge or your advice. SGEF entered into a hire purchase agreement with a transport operator. The operator’s licence was revoked after the hiring began, and SGEF did not find this out until it heard that the vehicle had been seized and that there would be a hearing before the traffic commissioner. SGEF did not attend the hearing and relied on written representations.
It lost its application for return of the vehicle, and had to appeal. The appeal succeeded, but only lead to a re-hearing before the commissioner. If any reader knows what happened in the case, the writer would be interested to know. However, at appeal, strong comments were made by the judge – including:
“In the case of finance companies what happened in this case demonstrates the need for at least one member of staff to be thoroughly familiar with the law and practice relating to impounding applications. The alternative is that they should obtain immediate advice from someone with the necessary expertise whenever a vehicle they own is impounded…a person who was thoroughly familiar with this area would have completed…the application more carefully, would have ensured that appropriate evidence was available and would have attended the hearing…As a result the prospects of success would have been immeasurably increased.”
As to knowledge and the question above (has the claimant satisfied me that he, she or it probably did not know that the vehicle was being or had been used in contravention of …the Act?) the appeal court stated: “…if there is, literally, no evidence to support the conclusion that the claimant did not know…there is no need for the traffic commissioner to go further, and to…embark on the process of deciding whether or not the claimant had actual, imputed or constructive knowledge of the use in contravention.”
We recommend that you prepare in advance for the possibility of having to attend a hearing before a traffic commissioner. Hearings are rigorous and detailed, and often involve barristers making detailed legal and factual arguments on your behalf. The guidance is helpful, but with each case turning on its facts, it is only a starting point, and as the appeal court in SGEF said: “impounding hearings…are adversarial.”
Practically we recommend that you: check the notices section of the The London Gazette and The Edinburgh Gazette for your vehicles; consider your internal procedures for dealing with lease or finance customers who need an operator’s licence to use your vehicle and how you ascertain that requirement; take advice early on making the application for return and your evidence in support of you having ‘no knowledge’ that your customer was operating the vehicle without the required licence. <