Laura Hadzik (Partner and Head of Commercial Road Transport) recently represented a new HGV operator whose operator licence application had been called to a Public Inquiry after concerns were raised about financial standing and the possibility that the business was a "phoenix" operation.

Why the operator licence application was referred to a Public Inquiry

The applicant had initially sought to demonstrate the financial standing required for a standard HGV operator licence through funds loaned by the director of another haulage company.

As part of its enquiries, the Office of the Traffic Commissioner conducted a financial standing check on that company, which revealed a poor financial position.

This raised concerns about whether the loaned funds genuinely demonstrated the applicant's financial standing and whether the new business represented an attempt to continue the activities of a financially distressed company through a new entity, commonly referred to as "phoenix" operation.

The application was therefore referred to a Public Inquiry so that the Traffic Commissioner could determine whether the statutory requirements for the grant of an operator licence had been satisfied.

Further scrutiny arose because the nominated Transport Manager was newly qualified, meaning the Traffic Commissioner also required reassurance that suitable compliance management systems and arrangements would be in place from the outset.

How JMW helped secure the operator licence application

Having reviewed the concerns raised by the Traffic Commissioner, Laura advised the client that continuing to rely on the director's loan was likely to undermine the application. Following that advice, the loan was repaid before the Public Inquiry and the applicant instead demonstrated financial standing through alternative funds that clearly satisfied the statutory requirements. This removed the uncertainty surrounding the source of the available finance and enabled the applicant to present a significantly stronger case.

Laura also worked closely with the client to prepare detailed evidence addressing each of the Traffic Commissioner's remaining concerns. This included demonstrating:

• that the applicant had adequate financial standing through independently available funds;
• that the business was a genuine new venture and not a phoenix operation established to avoid the liabilities or regulatory consequences of another company;
• that comprehensive compliance management systems covering vehicle maintenance, driver management, record keeping and operator licence obligations had been implemented before trading commenced;
• that, although the nominated Transport Manager was newly qualified, they fully understood their statutory responsibilities and had taken proactive steps to ensure effective compliance management; and
• that the Transport Manager had engaged the ongoing support of an experienced transport consultant to provide additional oversight and guidance.

Laura ensured the client was thoroughly prepared for the Public Inquiry, enabling them to present clear, credible evidence and deal confidently with the Traffic Commissioner's questions.

Outcome: HGV operator licence granted after Public Inquiry

The Traffic Commissioner accepted that the applicant had addressed the concerns identified before the hearing. In particular, the Traffic Commissioner was satisfied that the applicant had demonstrated genuine financial standing through appropriate funds, that the business was not a phoenix operation and that robust compliance management systems and arrangements were in place despite the Transport Manager being newly qualified.

The application for the HGV operator licence was granted, allowing the client to commence trading as planned.

How JMW's operator licensing solicitors can help

Operator licence applications are subject to increasingly detailed scrutiny, particularly where there are questions surrounding financial standing, business structures, newly qualified Transport Managers or alleged phoenix activity.

JMW's specialist operator licensing solicitors regularly represent applicants and licence holders at Public Inquiries before the Traffic Commissioner and advise on every aspect of operator licensing, including new HGV operator licence applications, financial standing, Transport Manager requirements, director and senior manager training, compliance systems implementation and audits.

Whether you are applying for your first operator licence or responding to concerns raised by the Office of the Traffic Commissioner, our experienced team can provide practical advice and expert representation to maximise your prospects of success.