TCs can decide if haulier has financial standing after CVA
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By Christopher Walton
OPERATORS THAT propose or have entered a company voluntary arrangement (CVA) should notify traffic commissioners (TCs), who will “consider whether to make further enquiries to establish if [it] continues to satisfy the financial standing requirements” for its O-licence.
CM has requested that the TCs clarify the position regarding CVAs and financial standing in the wake of a series of high-profile CVAs in recent months, including Clearway Distribution, Palletline Logistics (Midlands) and Circle Express.
While not commenting on specific cases, the Office of the Traffic Commissioners has issued the following guidance to operators: “Where a CVA is proposed by the directors of a company, TCs expect the licence holder to notify them via the Central Licensing Office, setting out details of the agreement.” It adds that the TCs will then consider further enquiries to establish financial standing requirements attached to its O-licence.
Furthermore, EC regulation 1071/2009 allows the TC to provide a period of time (up to a maximum of six months) for standard licence holders to rectify a situation where they can not demonstrate financial standing. Section 26 of the Goods Vehicles (Licensing of Operators) Act 1995 allows a TC to direct that an O-licence may be revoked, suspended or curtailed on a number of grounds. This includes circumstances where the licence holder has been made bankrupt or gone into liquidation.
For a standard national O-licence, an operator must prove funds of £7,700 for its first authorised vehicle and £4,200 for each additional vehicle.