Quarterly insights from the Commercial Litigation team

Practical pointers for operators facing rising fuel costs

With fuel prices continuing to rise, many operators are feeling the strain on already tight margins, and we have seen an increase in enquiries from operators over what they can so.

Whilst increasing costs are unavoidable, there are practical steps operators can take to manage the impact within their existing contracts.

Firstly, start by checking whether the contract, if in writing, includes a fuel price adjustment clause (often called a fuel escalator or surcharge clause). If it does, the contract may already allow you to increase prices when fuel costs exceed a certain level. Make sure you understand how the clause is triggered, how any increase is calculated and what notice must be given to the customer.

If there is no such clause, or no written contract, operators may still be able to renegotiate pricing, especially where rising fuel costs make the contract commercially unsustainable. Many customers appreciate the pressures facing the transport sector and may be open to temporary surcharges, revised rates or shorter‑term pricing reviews. If customers do not agree, it can be worth making it clear that at the current price the contract is unsustainable. Given that fuel cost is a global issue, and the alternative is to potentially contract with a new operator, where the cost will undoubtedly increase, the reality of customers avoiding an increase to the contract price is unlikely.

For new or renewed contracts, operators should ensure they include clear mechanisms for fuel adjustments and regular price reviews to avoid being locked into uneconomic rates during periods of volatility, especially given the continued tensions in the Middle East.

Key industry bodies, including the Road Haulage Association (‘RHA’) are working tirelessly to influence the UK Government to stabilise fuel prices, including the current Fuel Duty Campaign and Fuel Survey 3, which we urge operators to sign.

Late payment of debts

Most businesses, large or small, will eventually face the frustration of unpaid invoices and unresponsive customers. Cash flow can quickly become strained, and what starts as a minor delay can soon turn into a bigger problem if the debtor stops engaging.

A welcome reform, announced by the Government, is reforms to late payment of debts that will do the following:

1. A mandatory 60-day payment window for all commercial contracts involving companies with annual revenue above 54 million.
2. Suppliers will gain the right to charge statutory interest on overdue invoices at a rate of 8% above the Bank of England base rate, significantly increasing the cost of late payments for larger firms.
3. Companies found to be consistently breaching payment terms will be required to publicly disclose their practises in annual reports, including explanations and steps taken to improve.

Whilst the above changes are welcome, in reality a 30-day standard payment term is better practice, especially for smaller operators battling the current external challenges.
The changes need to go through a period of primary and secondary legislation, so there is no implementation date as of yet.

Practical advice to operators in avoiding bad debtors include the following:

1. Make sure a 30-day payment period is agreed as part of the contract. If a customer is insistent on a longer payment period, make sure that the cash flow of the business can sustain this.
2. Keep on top of payment due dates and send reminders when not paid. A big concern is payments not being made where a customer is insolvent, an operator applying pressure is more likely to be paid.
3. Be aware of your contractual rights and commercial position, if a customer needs your business services to trade insist they will not be provided until overdue invoices are paid.
4. Look to apply interest and fees for late payment. The detail of what you can claim will either be in the contract or the Late Payment of Commercial Debts (Interest) Act 1998.

Clandestine entrants – the 2026 reforms and what operators need to know

From 1 January 2026, the Home Office has implemented changes to the Clandestine Entrant Civil Penalty Scheme (“CECPS”). This was discussed in detail on our joint webinar with the Road Haulage Association on 24th March 2026, which we summarise below.

These changes allow financial penalties to be reduced to £0 where hauliers and their drivers can demonstrate full compliance with the scheme’s prevention requirements and are members of the Civil Accreditation Scheme. This marks a significant shift from the previous system, under which drivers could still face fines of up to £10,000 per clandestine entrant, even where their employer was accredited.

These reforms follow long standing industry concerns that compliant operators were being unfairly penalised. While the new approach provides welcome protection, operators must still maintain robust and well documented procedures. Accreditation will only act as an effective safeguard where operators can demonstrate that checks have been properly carried out and that approved systems have been followed.

In addition, from 1 January 2026, Border Force has updated its guidance, “How to secure your vehicle when travelling to the United Kingdom”. The revised guidance now makes clear that seals or locks must be broken in order to carry out an internal check after every stop during a journey. While this has always formed part of standard checks, the updated guidance now sets out this requirement clearly and in detail. We encourage all operators undertaking international journeys to review the guidance and, where necessary, update their drivers accordingly.

Our team continues to recognise the challenges operators face in relation to these penalties and remains committed to supporting businesses with all of these matters, including Notices of Objection, Civil Accreditation Scheme applications, and appeals under the updated regime.

Our view remans that for any operator involved in cross border work should apply to join the Civil Accreditation Scheme.

Discrimination claim – successful defence for operator

Backhouse Jones recently acted for a bus operator in defending a passenger’s claim for race discrimination, harassment and victimisation. The claim arose after a passenger boarded the bus, briefly showed his pass and walked on. The driver whistled to bring him back for a proper check, and when challenged, allegedly responded with “did you want me to drag you back?”

The passenger later complained by email. One email was missed, and although the second was investigated, the outcome was not communicated due to an administrative oversight. The passenger believed both incidents were racially motivated and issued a claim under the Equality Act 2010, seeking damages for distress and aggravated damages.

We successfully defended the claim. The court found no evidence that the driver’s actions were linked to the passenger’s race and confirmed that the operator had taken reasonable steps to prevent discrimination through training and policies. Had discrimination been proven, the company would still have been able to rely on the statutory defence under section 109(4).

The claim was dismissed in full, and the passenger was ordered to pay the operator’s fixed legal costs of £48,752.95.

Cartel update – the RHA’s truck cartel claim continues

The RHA continues to progress its collective proceedings following the European Commission’s 2016 finding that major truck manufacturers had engaged in unlawful price coordination between 1997 and 2011. With the Collective Proceedings Order granted in August 2024, the claim now moves through the UK’s collective actions regime on behalf of operators believed to have paid inflated prices for their vehicles.

Following the closure of the opt in window on 28 February 2025, the RHA’s legal team has been preparing the case for the next stage — whether settlement discussions or litigation. The Competition Appeal Tribunal is expected to list a Case Management Conference to determine further directions in due course.

While appeals and delays by manufacturers have extended the overall timeline, the RHA remains focused on achieving a meaningful resolution. Settlement remains the swiftest potential outcome, though this will depend on manufacturers’ willingness to engage constructively. The RHA has suggested that progress may be seen within the next 12 months, with any subsequent distribution of funds following thereafter.

Legal 500 – Commercial Litigation

We are pleased to share that our Commercial Litigation team has once again been ranked in the Legal 500 2026 edition. The directory praised the team for its deep sector knowledge, practical approach and ability to understand how operators work and what their priorities are.

Feedback described the team as “a remarkable practice” and highlighted the strength, experience and client focused support delivered across complex disputes, with Libby Pritchard and Ellie Kenyon being recognised as Key Lawyers for their expertise and client service.

Team Spotlight: Morgan Smith

This month, we are pleased to introduce Morgan Smith, the newest member of our team, who joined Backhouse Jones in January 2026 as a Commercial Litigation Paralegal.

Morgan graduated from the University of Central Lancashire with a degree in Law with Business, demonstrating a strong academic foundation and a keen interest in the commercial legal landscape. Following the successful completion of his degree, Morgan took a gap year to travel across Australia, where he also gained valuable international work experience. This opportunity allowed him to develop independence, adaptability and a broad perspective – qualities he now brings to his role within the firm.

Since joining the Commercial Litigation team, Morgan has quickly become a valued member, providing key support across a range of matters. His proactive approach, attention to detail and willingness to assist colleagues ensure that he plays an important role in delivering high-quality service to our clients.

We are delighted to have Morgan on board and look forward to supporting his continued development within the firm.

Back on the road – where to find us

The whole team was out in full force at the Road Haulage Association Dinner Dance in Harrogate back in November, enjoying a fun night of drinks, networking and some questionable dance moves.

Last week, Kai attended the Confederation of Passenger Transport golf day at the Forest of Arden. With the help of his handicap, he came 3rd – taking home premium golf balls and a boot bag.

Members of the Commercial Litigation team will be out and about over the coming months at key industry events. We hope to see many of you there:

• 18–19 April – UK Coach Rally, Blackpool
• 23 April – CPT Kent and Medway Evening
• 11–13 May – ALBUM Conference, Blackpool
• 30 June – 2 July 2026 – RTX, Stoneleigh
• 9 July 2026 – Transaid Cup

If you are attending, please come and say hello — we always welcome the opportunity to catch up with clients and colleagues from across the transport sector.

Get in touch

Whether you’re dealing with contractual complexities, enforcement issues or looking for strategic legal support, our Commercial Litigation team is here to help.