What should you do if a Chain of Responsibility (CoR) breach or other incident of non-compliance occurs? How you respond is just as important as the steps you have taken to avoid any non-compliance in the first place.

CoR breach prevention

There are several ways you can avoid committing or being involved in a CoR breach, including:

  • taking director and executive officer due diligence and compliance measures
  • taking all reasonable steps to avoid breachesconducting a risk assessment and developing a response/mitigation plan
  • developing a CoR compliance policy
  • implementing customer and business partner CoR compliance assurance conditions in contracts implementing effective management and board reporting.

However, despite taking the above steps, it is possible that a CoR breach or another non-compliance incident may still occur. Remember, although you are required to exert influence over the conduct of other parties in the chain, you do not actually have control over them. Regardless, you can be held responsible for a CoR breach occurring anywhere along the road transport supply chain, even if you were not actually performing the function during which the non-compliance occurred.

Responding to a CoR compliance problem

Whether or not you were actually responsible for causing the non-compliance, what you do in response to the incident is just as important as the steps you have taken to prevent it. This is because the action you take in response to a CoR non-compliance incident is intended to prevent breaches from happening in the future. This is outlined in s 620 of the Heavy Vehicle National Law (HVNL), which provides that in assessing whether you have taken "all reasonable steps" to prevent a CoR breach from occurring, a court may have regard to "the measures available and measures taken...to address and remedy similar compliance problems that may have happened in the past".

It is important to note that the wording of the section empowers a court to assess your performance in responding to past CoR "compliance problems".

Tip: A CoR compliance problem is not necessarily a breach of the HVNL. It may also be an instance in which a CoR compliance policy or practice has not been followed or implemented properly, even if it doesn't actually result in a breach of the HVNL.

As such, in relation to any breach, you may be judged on how you have previously responded to circumstances in which no breach has taken place. This means that the threshold for response action on your part is quite low. In turn, this means that you must be active and alert in monitoring CoR compliance by your business and your business partners, and ensure that you step in and act when performance is not up to scratch. This is consistent with the active CoR duty to "take all reasonable steps".

Continual improvement

At a macro level, you must ensure that your response measures are positively changing operations and/or CoR compliance performance. If the same or similar type of breach or non-compliance incident keeps cropping up, this demonstrates that the actions that you are taking in response are not working.

It means that when a court judges you on the "measures available and measures taken...to address and remedy similar compliance problems that may have happened in the past", you will score a 'fail'. You must aim for a system of continual improvement in your operations and compliance.

If it doesn't exist on paper, it didn't happen

Courts, judges and lawyers love paper. If you don't document your incident identification, risk assessment and response on paper, in the court's eyes it never happened.

So, it is essential that you record non-compliance incidents in your response log that forms part of your risk assessment. You should also give written notice of any required action to rectify the problem to your business partners and keep records of this notice, their response and your consideration of the suitability of their response.

Similarly, you must keep board reporting of incidents, along with minutes of the board's consideration and resolutions. These records will be the only thing that you have to demonstrate compliance in the event of a prosecution.

* A version of this article was originally published in CoR Adviser. This article is © 2015 Portner Press Pty Ltd and has been reproduced with permission of Portner Press.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.