Gallagher sheds light on landmark chain of responsibility ruling in transport
Gallagher sheds light on landmark chain of responsibility ruling in transport | Insurance Business Australia
Motor & Fleet
Gallagher sheds light on landmark chain of responsibility ruling in transport
Case emphasises legal responsibilities transport businesses must uphold
Motor & Fleet
By
Roxanne Libatique
Gallagher has highlighted a major legal precedent in the Australian transport industry following the conviction of an operations manager under the Heavy Vehicle National Law (HVNL) due to a fatal accident.
The brokerage giant said this case underscores the legal responsibilities that transport businesses must uphold.
Transport operator in Australia convicted under chain of responsibility liability
In January 2024, the operations manager was sentenced to three years in prison, fined over $100,000, and barred from other transport roles for 12 months. These penalties were imposed for allowing a driver under the influence of drugs to operate a heavy vehicle, resulting in a crash that killed four people.
The transport company and two of its executives were also convicted of manslaughter for failing to enforce and implement safety policies effectively.
Penalties for CoR non-compliance
The updated transport chain of responsibility (CoR) liability laws, which came into effect in 2018, make it an offence to direct or require drivers or others in the transport chain to operate vehicles while impaired.
In a blog, Gallagher explored the penalties for CoR non-compliance.
CoR liability includes three categories of offences related to primary duty obligations, each with escalating penalties. The manager was convicted of a Category 1 offence:
Category 1 offences: Reckless conduct exposing someone to death, serious injury, or illness. Penalties include up to $300,000 and/or five years’ imprisonment for individuals, and up to $3 million for corporations.
Category 2 offences: Contravention of primary duty obligations exposing individuals to death, serious injury, or illness. Penalties include up to $150,000 for individuals and $1.5 million for corporations.
Category 3 offences: Primary duty contravention without reckless exposure to risk. Penalties include up to $50,000 for individuals and $500,000 for corporations.
Who is accountable under chain of responsibility?
Gallagher explained that corporations, directors, partners, and managers are responsible for their employees’ actions and can face prosecution for operational failures even if no safety incident occurs. In this case, the driver was under the influence of drugs.
The HVNL extends primary duty obligations to anyone involved in consigning, loading, or receiving transportable goods as part of their business. This includes:
loading managers who oversee regular loading or unloading activities
consignees or consignors listed in transport documentation or requesting transport services
individuals loading goods before transport
importers of goods into Australia
operators who control or direct heavy vehicle usage
schedulers of goods, passengers, or drivers’ work and rest times
packers who package or oversee the packing of goods
individuals loading and unloading goods or containers onto vehicles
employers of heavy vehicle drivers
executive officers managing corporations
prime contractors engaging drivers under contract
The brokerage giant emphasised that the sentencing of the operations manager and senior executives demonstrates the serious legal repercussions for those in the chain of responsibility, particularly in cases involving fatalities.
Gallagher also recently explored the impact of hybrid work models on the Australian insurance industry, with 25% of Australian insurers expressing concerns over the future of these models. It spotlighted the workforce-related challenges facing the industry, including difficulties in attracting and retaining skilled professionals, exacerbated by the impending retirement of a majority of the workforce.
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