First Court of Appeal decision on clandestine fines for international operators
12 July 2024
The Court of Appeal have recently passed down judgement on the case of KLG Trucking SRL and Secretary of State for the Home Department. This case concerned whether it was reasonable to impose a penalty on an operator where there had been full compliance with the Carriers Liability Regulations 2002 and the Carriers Liability (Amendment) Regulations 2023 (‘the Regulations’). More specifically, the Court considered KLG’s compliance with Regulation 2E (2) because it had failed to record that it had ensured actions required by Regulations 2B(2), (3), (5), (6) and (7) had been carried out. The Court of Appeal concluded that KLG’s penalty should be reduced from £36,000.00 to £18,000.00.
Background
Following the discovery of 8 clandestine entrants, the company and the driver were each issued with a penalty. A penalty of £48,000.00 was initially imposed on the Driver (for which the Company was liable for). This was later reduced to £36 per clandestine entrant resulting in a total liability of £288.00. The company was also issued with a penalty as the Owner/Hirer of the Vehicle of £80,000.00 which was later revised to £4,500.00 per clandestine entrant, a total penalty of £36,000.00. The basis for this penalty of £36,000.00 alleged non-compliance with Regulation 2E (2).
The company appealed their penalty of £36,000.00 in the County Court at Nottingham, following which their penalty was upheld. This decision was subsequently referred to the Court of Appeal for consideration.
Decision
The court considered KLG’s compliance with Regulation 2E(2) and found the initial judge had been mistaken and that KLG had been compliant with the regulations and the fine was reduced to £18,000.00
Unfortunately, the court rejected the argument that because the Company has complied with all the Regulations discretion should be exercised and there should be no penalty imposed. This is a disappointing decision and leaves operators genuinely asking what more can they do?
Steps to take to avoid a fine
The advice remains to ensure a system that is complaint with the Regulations is implemented and steps are taken to ensure that it is followed by Drivers. We also strongly advise that operators undertaking international travel join the Clandestine Entrants Civil Penalty Accreditation Scheme.
This scheme recognises HGV and PSV operators who take measures to operate an effective system for securing vehicles and preventing the carriage of clandestine entrants in accordance with the Regulations.
By simply being a member of this scheme, should an operator receive a penalty, their fine is automatically reduced by 50% as long as they are following the approved system at the time the clandestine entrants are found. The scheme is free to join but we do offer assistance with this application for a fixed fee. Please do contact us to discuss further.
Trend in Border Force decisions
All is not doom and gloom, recently our dispute resolution team have noticed a trend of various operator fines being cancelled in full following the submission of a Notice of Objection. Further, a substantial reduction in the Driver’s fines has also been observed. Earlier this week our dispute resolution team had various successful results following the submission of a notice of objection.
In the first instance a haulage company was found to have two clandestine entrants on their vehicle. A penalty of £12,000.00 was imposed on the Driver and the Company was issued a penalty of £12,000.00. This amounted to a total penalty of £24,000.00. Our team filed a notice of objection along with financial means documents for border force to consider.
Upon review, Border Force reduced the fine for the Driver from £12,000.00 to £524.00. This represents a reduction of £11,476.00. Border Force went on to state the fine for the company, of £12,000.00, was to be extinguished in its entirety.
Another instance included an Operator being issued with a penalty of £3,000.00 and their Driver receiving a penalty of £6,000.00. This totalled a fine of £9,000.00. Upon review of the notice of objection, Border Force cancelled the penalty for the company in its entirety and reduced the Driver’s fine, following the submission of financial means documents, to £1,843.00.
This may be a sign of Border Force exercising its discretion in circumstances where a company is fully complaint with the Regulations. Unfortunately there is yet to be a consistent approach taken in imposing the fines and this will only be shaped by operators ensuing a compliant system to prevent clandestine entrants is in place, and objecting to fines when received.
Please contact the Dispute Resolution team to discuss further here.
This article was written and researched by Libby Pritchard and Laila Khan from our Dispute Resolution team. You can read more about them and what they do by clicking on their names.
