Chain of Responsibility changes in 2018 – are you liable?

Erin McGee, 5 min read

What's changing in Change of Responsibility legislation?

With Chain of Responsibility laws changing on October 1st, all parties within your supply chain, both on and off the road, will be liable for any safety breaches that may occur. New CoR legislation requires a proactive approach to safety, and holds everyone accountable if compliance is not met.

If you'd like to know more about CoR, check out these other posts:

Now, let's take a look at a potential scenario.

Meet Steve.

Steve is a loader at one of Australia’s largest distribution centres. He’s a top worker, always follows loading procedure and takes care of his safety and the safety of others.

He’s at the DC bright and early one morning, getting ready to load a long-haul drivers’ last run of his shift. He ensures the goods are the correct mass and dimensions, secures them and checks that all documentation is accurate.

“Right. All set! Better get rolling!” He tells the driver, who takes a few seconds to register what Steve has said before turning to him, squinting slightly.

“Thanks, mate.” The driver replies.

The two part ways and Steve moves onto his next job before heading out for a coffee and something to eat.

At about the same time as Steve is sipping his large cappuccino, the driver is two hours into his 10-hour journey, travelling at 100km/h. His neck is tight, and he begins to feel tired. He starts to lose concentration and rubs his eyes, before closing them, just for a moment. The truck veers across the double lines before the driver comes to, scrambling to move the truck back into his lane. He over-corrects his steering and the truck flips.

Who is liable for the crash?

Under the current Chain of Responsibility legislation, “those who have control or influence over the transport task are deemed responsible for complying with and for breaches of these laws.”

Sounds like pretty solid law, right?

Sort of. As many transport operators know, it’s not just the driver or operator responsible for breaches – often other parties are involved, depending on the nature of the breach. So in Steve’s case, he may be legally liable for the crash due to his inaction and failure to report driver fatigue – as well as encouraging a fatigued driver to continue working.

Would the new law make a difference?

Quite possibly.

If an event like this were to occur, the new law would hold parties responsible for vehicle maintenance or even hold the company’s executive board accountable.

The four major amendments to the law are as follows:

1. A new Primary Duty, or acting “so far as is reasonably practicable”

In the current law, parties in the supply chain are obligated to take “reasonable steps” to ensure compliance and are only liable after a breach is detected. The amendments state that every participant in the CoR has a non-transferrable duty to make sure, “so far as is reasonably practicable” that their actions related to the vehicle are safe and compliant. This means that no contract, written or verbal, can relinquish a party's CoR responsibility.

We'll cover a process to determine what a reasonably practicable action is further down.

2. Executive Officer liability

Another part of the amendment includes a stricter duty on company executive officers to make sure their company complies with its duties under the new law. This involves executives proactively ensuring compliance, even if an offence has not been committed. And if the company is found liable, executives can be held personally liable.

Which leads me to the next change…

3. Penalties

There are some hefty penalties that will be introduced alongside the “so far as is reasonably practicable” defence:

  • Maximum five years imprisonment
  • $300,000 fine for individuals
  • $3 million fine for companies

Some scenarios to ponder:

Category 3

Situation: A breach of the safety duty – the discovery of the breach is sufficient, no event needs to have taken place
Penalties: $50,000 for an individual, and $500,000 for a corporation

Category 2

Situation: A breach of the safety duty that creates a risk of injury or death
Penalties: $100,000 for individual and $1 million for a corporation

Category 1

Situation: Recklessness is involved
Penalties: Five years imprisonment and/or $300,000 for an individual, and $3 million for a corporation

Sounds scary, but it's a small price to be paid for the safety of parties in the chain and the wider community.

4. Defences

Finally, defending a breach in court will be handled differently under the 2018 Chain of Responsibility amendments. There will be considerations taken into the specifics of the business that has made the breach, and their practical ability to comply with its obligations. This approach avoids companies blindly following a blanket ruling or checking off compliance steps from a prescriptive checklist.

What even is 'reasonably practicable' anyway?

Here’s a handy 4-step process to follow when determining what actions are 'reasonably practicable' (credit to this great report by NATROAD)

So, how do transport businesses ensure they’re covered?

Simply put, all businesses in the transport supply chain need to mitigate risks to the best of their ability.

We're not just talking company and employee risk, but the risks from participants "up the line" and the potential for transferral of risk "down the line". Companies that engage sub-contractors will need to pay closer attention to the behaviour and compliance of their subbies too.

They must ensure rigorous procedure and safety reporting, as well as company-wide knowledge of the CoR and individual responsibilities.

Having the ability to actually prove compliance and knowledge levels of employees and contractors will become increasingly important after the law changes. For a use case of how Yarno is effective helping businesses in the heavy vehicle industry safer and more compliant, check out our case study on Ron Finemore Transport.

Want more info? Here are a couple more handy posts:

Erin McGee

Erin McGee

Erin is an ever-trusty wordsmith and resident spreader of good vibes. You'll find her chatting up a storm in Mandarin, yelling kiai's at jujitsu and eating dark chocolate at 2pm sharp.

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