Automatic Termination of Operator’s Licences

Decisions of the Traffic Commissioners and First-Tier Tribunal (Transport) (“the Tribunal”) continue  to confirm that non-payment or late payment of Operator’s Licence renewal fees will result in the automatic termination of your Operator’s Licence unless truly exceptional circumstances exist.

The relevant legislation (namely Section 45(4) of the Goods Vehicles (Licensing of Operators) Act 1995 (“the Act”)) is clear – if payment of the renewal fee is not received by the prescribed date, the Operator’s Licence will automatically terminate at that time.

Operators will normally receive a letter from the Office of the Traffic Commissioner at Leeds (“OTC”), reminding them that their Operator’s Licence renewal fees are due to be paid by a prescribed date; however, decisions of the Traffic Commissioners and the Tribunal consistently make it clear that there is no provision in the legislation for such reminders to be sent – they are simply sent as a matter of courtesy.  

The obligation to ensure that the relevant fees are paid by the prescribed date is placed fairly and squarely on the operator and, if they are not paid, the Operator’s Licence will automatically terminate.  Operators seeking to argue that their late (or non) payment of the renewal fee is because they did not receive a reminder letter from the OTC should therefore expect no sympathy from either the Traffic Commissioners or the Tribunal; your Operator’s Licence will automatically terminate and you will have no authority to operate vehicles until such time as you have applied for, and obtained, at least an interim grant of a new Operator’s Licence.  As your Operator’s Licence will have terminated automatically, as opposed to having been revoked by the Traffic Commissioner, there is no reason to suppose that the new Operator’s Licence will not be granted; however, any period of in - operation could be long enough to put some operators out of business!

It is open to the Traffic Commissioners and the Tribunal to exercise their discretion to disregard the automatic termination of an Operator’s Licence if exceptional circumstances exist, which justify doing so.  In deciding what is exceptional in this context, the Traffic Commissioners’ and Tribunal’s approach has been to apply the main dictionary definition of the word exceptional, i.e. unusual – the question to be asked is therefore whether the circumstances put forward by the operator by way of explanation for the late (or non) payment merit the description exceptional in the sense of unusual

The following explanations recently put forward by operators have not been found to constitute exceptional circumstances:

  • In T W Walton & C Walton t/a TW & C Walton Builders, the operator was on holiday when the OTC forwarded the reminder letter to them.  They responded immediately upon their return (albeit after the prescribed date) stating that they wished to continue operating, that non-payment of the renewal fee was due to a genuine oversight on their part and that they had operated vehicles for 30 years without any previous issues.  The Traffic Commissioner and the Tribunal found that there were no exceptional circumstances in this case, pointing out that, even in the absence of a reminder letter from the OTC (which, in any event, were simply a matter of courtesy), the Operator’s Licence discs displayed the expiry date and it was the responsibility of the operator to ensure that payment of the renewal fee was made by the prescribed time; it would therefore be sensible for operators to make a note of this date.  The Operator’s Licence therefore terminated automatically and the operator was required to apply for a new Operator’s Licence.
  • In Christopher James Bishop Green t/a Jamie Green Trucking, the operator was working abroad when the OTC forwarded the reminder letter to him.  He responded immediately upon his return (albeit after the prescribed date) stating that his failure to receive the reminder letter (as he was abroad) had caused the non-payment of the renewal fee. The Traffic Commissioner and the Tribunal found that there were no exceptional circumstances in this case, concluding that, as the primary obligation to make payment of the renewal fee by the prescribed date rests on the operator, he either knew or ought to have known (as the Operator’s Licence expiry date appears on the Operator’s Licence discs and should have therefore been seen during the daily walk round checks) that he would be abroad when the renewal fee fell due; it was therefore up to the operator to make arrangements for the renewal fee to be paid while he was abroad.  The Operator’s Licence therefore terminated automatically and the operator was required to apply for a new Operator’s Licence.
  • In Michael Welsh Limited, the operator failed to notify the OTC of its change of correspondence address as a result of mismanagement and an oversight on its part.  The operator did not therefore receive the reminder letter from the OTC and did not make payment of the renewal fee.  The Traffic Commissioner and the Tribunal found that there were no exceptional circumstances in this case, pointing out that the onus is on the operator to ensure that the Traffic Commissioner is informed of the up to date position in relation to the correspondence address.  The Operator’s Licence therefore terminated automatically and the operator was required to apply for a new Operator’s Licence.

Once the Traffic Commissioner or Tribunal is satisfied that exceptional circumstances do exist, they must consider whether those exceptional circumstances have caused or contributed to the late (or non) payment of the renewal fee.

The final decision for the Traffic Commissioner or Tribunal is whether or not to exercise their discretion to disregard the automatic termination of the Operator’s Licence. 

Factors which will be taken into account include the operator’s past payment history; and the extent to which the operator has failed to comply with the primary responsibility to pay the renewal fee on time. Factors which will not be taken into account include the fact that the operation of vehicles on a daily basis is essential to the operator’s business.

In light of the above, it is essential that you make a note of your Operator’s Licence expiry date and ensure that the OTC is informed of any changes to your correspondence address; the reality is that, whilst there is no requirement for the OTC to send reminder letters, in many cases payment is, in practice, triggered by receipt of the reminder letter!

For passionate and pragmatic advice in relation to any aspect of operator licensing, contact JMW.

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