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Challenges and opportunities seen in WA COR laws

Insurers could gain as risks expand up and down the supply chain and company hierarchy


Western Australia’s new chain of responsibility (COR) laws pose a significant set of challenges to freight transport companies and their insurers, lawyers say.

Three months after being enacted, Norton Rose Fulbright partners Jehan-Phillippe Wood and Tom Martin note an increase in the potential for losses, claims and costs arising out of breaches of State road laws.

While not covering the same ground as the Heavy Vehicle National Law (HVNL) “they significantly extend the potential for criminal prosecutions, alternative enforcement action and civil claims following breaches of statutory obligations to ensure the safety of road transport vehicles on public roads”, they say.

This, along with the push nationally towards aligning the HVNL more closely with work health and safety (WHS) laws, “could further extend the application of these laws, substantially increase penalties for breaches and introduce a broader suite of alternative enforcement measures”.

“The experience in other states, particularly in New South Wales over the past 10 years, reveals a very significant level of enforcement activity by the prosecuting authorities in those states against interested parties, including consignors, receivers, operators and individual company directors and officers,” the lawyers say.

They note that insurance firms may therefore accrue a business opportunity for risk advice and shield strategies but warn insurers they should “review where their policies provide investigation and defence cover for alleged breaches of chain of responsibility and other health and safety laws, and consider whether risk ratings are adequate to take into account a likely increase in exposure to claims and costs”.

They point out that the WA reforms are focused on the requirements for mass, dimension and load restraint (MDLR), and the provision of accurate container weight declarations (CWDs), in order to combat overloading and poor restraint practices.

“A key compliance risk for businesses and senior managers and operators is that deficiencies in establishing and implementing compliance assurance processes may result in multiple charges being brought against a single accused for failing to prevent mass breaches, potentially giving rise to very significant fines,” the lawyers explain.

“A successful prosecution may result in other pecuniary penalties and orders being imposed which may give rise to further significant liabilities:

A Commercial Benefit Penalty Order requires a convicted party to pay a fine up to three times the commercial benefit that was received or receivable from the commission of the offence.

A Compensation Order requires a person guilty of an MDLR offence to pay a road authority such amount as the court thinks fit for damage to any road infrastructure that the road authority has incurred or is likely to incur in consequence of the offence. So, for example, a defendant could be required to pay compensation for damage to a bridge caused by a vehicle that breached height requirements.

“Other available compliance measures include directions and instructions by transport inspectors and/or police officers that could give rise to financial losses.”

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