The Bus & Coach Association (BCA)’s Judicial Review claim, calling for more stringent regulation of community transport (CT) operators with section 19 and 22 permits – and which could have led to the possibility of prosecutions for undertaking what BCA considers to be ‘commercial services’ – has been dismissed.

The High Court released their long-awaited judgement last week (6 December, 2019) following the BCA’s claim against the Secretary of State for Transport on 18 and 19 November, 2019.

The case hinges partly on an assumption by the Department for Transport (DfT) when implementing EU regulation on licensing, that operations under s19 and s22 permits were exempt from requiring an ‘O’ licence because they are deemed ‘exclusively for non-commercial purposes’.

The Court concluded that there was no dispute between the parties as to the applicable legislation or to the principles that should be adopted in interpreting it, hence no useful purpose would be served by issuing a declaration.

The outcome now paves the way for the DfT to clarify how it will regulate the issue and use of permits, and how it defines ‘non-commercial purposes’.

Commenting on the outcome, TAS director, John Taylor, who provided specialist advice on the Judicial Review, said: “The judgement has endorsed many of the specific points that we made and reached the conclusion that we anticipated. Now that it has been fought to a standstill in the courts, the time has come for a more constructive path to be pursued.

“The last five years have seen massive cuts to budgets for school, social care and public transport, and this has forced commissioning authorities to encourage a race to the bottom on a lowest cost basis. Now let’s turn this round and focus on the passengers.”

The Case Explained

BCA’s Call for Prosecutions

The claim, in effect against the DfT and DVSA, sought to apply pressure for more robust enforcement of EU regulation (1071/2009). The assumption was made by the DfT when implementing 1071/2009 into GB that operations under s19 and s22 Permits were exempt because their operations were “exclusively for non-commercial purposes”.

The BCA challenged this view, in the light of some Permit operators undertaking school and social care contracts, and indeed competitively tendering against PSV operators. In the BCA’s final claim, with language more in line with that of the DfT 2018 consultation on the CT permit system, it asked for a declaration on whether operations are exclusively for non-commercial purposes to take into account, in order of importance:
• The level of payment received;
• The proportion of work won in competitive procurement;
• The size and scale of operation in the market;
• Whether the operation could afford to licence as a PSV operator; and
• Whether the operator uses volunteers or relies on paid staff.

The BCA also asked for a declaration that where an undertaking does not operate exclusively for non-commercial purposes, then drivers cannot rely on the “non-commercial” exemptions from requiring a full D/D1 driving licence and a Driver CPC.

High Court Judgement in Summary

In its reasoning, the Court considered the appropriateness of making a declaration as to the law in a case where there was no particular set of facts to consider at the core of the dispute (nor were the associated operators represented), especially if the issue could impact on future criminal proceedings.

The BCA relied heavily on a European Court judgement in a case (Lundberg) involving a rally driver stopped from driving a lorry, carrying his rally car, without a tachograph; he was deemed exempt from tachograph rules because he was not being paid to drive. The High Court concluded firmly that this case is not relevant to 1071/2009, as it concerned a differently worded regulation with different subject matter and had no application to the situation with which this case was concerned.

The Court also concluded that in the absence of a specific dispute about interpretation of the phrase “exclusively for non-commercial purposes”, it could not and should not make an abstract declaration, and that, even if it did that, declaration would have no binding legal force. It recognised that there will be disputes about whether a particular operator comes within the exemption or not, but that will depend upon the facts in any particular case, and it acknowledged that determining this may be far from straightforward. However the Court was not asked to adjudicate on a specific case.

A further conclusion was that if the applicable legislation is clear, then there is no justification for the DfT (and DVSA) to delay taking any enforcement decisions on the grounds that “the law isn’t clear”. Applying the rules may be difficult but that is not a good reason to avoid enforcement.

Comment from TAS Partnership Director, John Taylor

At the heart of this case, lies a fundamental difficulty in coming up with abstract interpretations of the meaning of “non-commercial purposes” – the moment a simple principle is reached, a countervailing case is likely to arise that renders it unfit for purpose.

The community transport sector will be relieved that the BCA has been unsuccessful in persuading the Court to make a declaration as to the law. If the BCA’s original formulation had been accepted there is no doubt that a major crisis would have occurred and service continuation would have been put in doubt.

The BCA may, however, console itself that the Court has accepted one of its contentions which was that the DfT and DVSA were unjustified in delaying making enforcement decisions. In essence the Court has put the ball back firmly in the DfT’s court and told it to face up to the fact that the legislation, as currently worded, is difficult.

However, the judgement gives little of the clarity for which both the community and commercial transport sectors might have been hoping. Consequently, the DfT must now produce much more detailed, explicit and nuanced guidance than it has managed to date. In its proposals so far, it has focused on interpreting “non-commercial”. The Court has explicitly rejected this approach. In its next attempt to draft guidance, the DfT will have to grapple with understanding the community transport sector’s varied purposes and identifying the factors associated with these.

Further Information

• The Judicial Review claim by the BCA follows consultation by the DfT in 2018 “Consultation on the use of section 19 and section 22 permits for road passenger transport in Great Britain”
• To read the full ruling by High Court, visit: www.bailii.org
• For more information about any aspect of the Judicial Review case and its background, please contact John Taylor on 01772 204988 or by emailing him directly.

To see more about this click here for the TAS commentary which is focused upon implications, and here for the Russell-Cooke LLP commentary which is focused on interpretation.