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Drivers left holding the can

OPINION: Increasing numbers of transport companies are choosing to self-insure, leaving a legal minefield for unwary drivers


To insure, or not to insure, therein lies the question. It is a question that most of us face during life. It is seen as a necessary evil by many. It seems you can insure just about anything these days, and the transport industry is ripe pickings.

To not insure has its attraction for some – increasing numbers of transport companies choose to self-insure. But, at the end of the day, someone has to pay and, as always, it seems to be the low hanging fruit that gets picked.

One high-profile case surrounding self-insurance played out in the District Court in Cairns last year. The judge in the case had this to say: “This is an unusual case involving separate corporate entities with common principals behind them. Whilst, ordinarily, an employer is vicariously liable for the negligent, wrongful or criminal acts of its employee, there is no bar to an impacted third party suing the employee directly. The defendant is capable of being sued by the first and second plaintiffs.”

In plain English, if you are an employed driver, your boss is responsible if you stuff up. What if the owner of the truck you drive and whose shirt you wear is self-insured and they don’t actually employ you? You might just be left holding the can to the tune of over half a million dollars in this particular case.

RELATED ARTICLE: Failed ambush attempt by NSW prosecutors

Back to insurance as we know it now, and the creep of insurance has pervaded into areas previously uncharted. Again, in plain English, transport companies and operators can now insure against illegality. Insurers now cover areas such as taxation audit expenses and employment practice liability. They agree to pay all damages and legal costs arising from any claim.

They indemnify directors of companies from any claims or penalties and Environmental Protection Agency claims against pollution or spills. They will even insure you against being extradited overseas. Another aspect they agree to cover is in the area of compliance. Check out this below –

The insurer agrees to:

• pay legal costs for and on behalf of; and/or

• reimburse any penalties for; and/or

• reimburse any enforceable undertaking expenses for; and/or

• reimburse any prosecution costs for any Insured on a statutory liability claim first received by the insured and notified to the insurer during the policy period.

Can of worms

All of the above begs the obvious question: why would you pay for compliance when you can insure against it? Surely that is against the law? The Heavy Vehicle National Law (HVNL) is complex and many of the provisions are a mystery to most. Section 742 seems to be one of the sleepers, with the insurance industry waking up the potential profits to be made.

HVNL section 742 prohibits contracting out. It makes any contract that seeks to be contrary to the purpose of the HVNL void. If a contract purports to annul, exclude, restrict or otherwise change the effect of a provision of the law, it is void. It is void if it purports to require the payment or reimbursement of all or part of a penalty that another person has been ordered to pay under the HVNL.

The overriding requirement for any company or operator under the HVNL is under Chapter 1A –Safety Duties. If an individual commits a category one offence under Section 26C – Primary Duty, the maximum penalty is $300,000 and/or five years imprisonment. For a corporation, the maximum fine is $3 million.

It would appear then that insurance of the type discussed might be a bit on the nose as far as the HVNL is concerned. Kind of like a bank robber insuring against getting caught in a way. Let’s stand back and watch this can of worms open for now. It’s going to be interesting to see how this unfolds.


Prosecutor’s dismay

Now for a bit of shameless self-promotion. The written submissions we produce are gaining some notoriety. I am sure anyone who has dealt with us knows we go that extra mile. But every now and then you get an outcome that needs to be appealed. One such outcome was a $25,000 fine for a severe mass breach handed down on the Local Court of NSW. Up to the District Court for a severity appeal, with a nervous operator in tow.

Our client was a small business owner from regional NSW who operates a directional drilling rig. He has a truck and dog combination for transporting drill mud from site. Due to circumstances mostly out of his control he was breached at a NSW heavy vehicle safety station.

The HVNL gives prosecutors the choice of who they charge in mass offences. It is a no brainer why they always charge the operator. Deep in the law is Section 596. This section allows prosecutors to seek penalties that multiply the maximum penalties in the law five times over. And plus some with mass breaches.

Highway Advocates Pty Ltd did what we needed to do and our anxious operator had his fine reduced on appeal from $25,000 to $400. We know what you need to know.


*ROBERT BELL, a former truck driver and current law undergraduate and practising paralegal, is the CEO and a director of Highway Advocates Pty Ltd. Contact Highway Advocates Pty Ltd on
or phone 0491 263 602.

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