Fronting - what is it and what are the risks?
By CET Solicitor Ritesh Chauhan
Despite clear guidance regarding ‘fronting’ in the public domain it is a frequently misunderstood issue, which regularly crops up at hearings in front of the Traffic Commissioner. It is usually a case of either licence ‘loaning’ or one person obtaining a licence on behalf of another.
We have attempted to provide a summary of the relevant cases and Guidance here in order to assist you in determining whether your business arrangement is a legitimate one in the eyes of the Traffic Commissioner.
The Senior Traffic Commissioner’s Statutory Document 1: Good Repute and Fitness, defines Fronting as “where a person, partnership or company, which does not have an operator’s licence, uses the operator’s licence held by another entity to conceal the fact that they are behaving in a way which requires them to have an operator’s licence of their own, is considered to be serious. Fronting deprives the traffic commissioner of the opportunity to oversee an ‘operator’.
‘Fronting’ is aggravated and very much more serious where it is apparent that the entity hiding behind the legitimate ‘front’ would be unlikely to obtain or would be debarred from holding their own operator’s licence. The Upper Tribunal has given clear guidance that evidence of fronting can, on its own, provide justification for deciding that the operator being used as a ‘front’ has lost its good repute.”
Fronting is further defined in the case of 2011/34 Utopia Traction Ltd (paragraphs 8 & 9): “In the context of vehicle operator’s licensing ‘fronting’ means that a person, partnership or company, which does not have an operator’s licence, uses the operator’s licence held by another entity to conceal the fact that they are behaving in a way which requires them to have an operator’s licence of their own. In other words it deprives the Traffic Commissioner of the right to control an ‘operator’, when Parliament has said that such an entity should be within his or her jurisdiction”.
This approach was followed in the case T2012/71 Silvertree Transport Ltd (paragraph 4), the Tribunal provided another description of ‘Fronting’: “Another way in which to describe the same situation would be to say that: ‘fronting’ occurs when appearances suggest that a vehicle, (or fleet), is being operated by the holder of an operators licence when the reality is that it is being operated by an entity, (i.e. an individual, partnership or company), which does not hold an operators licence and the manner in which the vehicle is being operated requires, if the operation is to be lawful, that the real operator holds an operator’s licence”.
Once a Traffic Commissioner is satisfied that the evidence establishes that “fronting” has taken place, he/she can take a serious view of such conduct as it involves deception and can seriously undermine the powers held by a Traffic Commissioner.
In the recent case of Wayne Wood t/a Woodys Haulage OD2013744, which was heard before Mr Nick Denton, (Traffic Commissioner for the West Midlands), on the 17th of March 2022 at a Public Inquiry, he told the operator that he was using another company to hide the fact they were continuing to operate illegally and it was a clear case of fronting.
The operator (a sole trader who held a standard national licence) lost his good repute. The decision was made to disqualify him “from holding or obtaining any type of operator’s licence in any traffic area and from being a director of any company holding or obtaining such a licence” for 3 years. The Commissioner also decided to disqualify him for 3 years as a transport manager on any operator’s licence.
The reasoning for the decision was outlined under Paragraph 4 of the Commissioner’s decision:
“The principal reason for the revocation of the licence is that Wayne Wood has essentially been lending his operator licence to Slumberdreams (UK) Ltd, a company controlled by Sharez Hussain which does not have an operator’s licence. Mr Hussain has been associated with multiple revoked licences, held by Slumberdream Ltd, Slumberzone Beds Ltd, Health Therapy Ltd and Midlands Logistics UK Ltd amongst others. He has impersonated another director in an interview under caution with DVSA. He has an utter disregard for the laws pertaining to operator licensing or the roadworthiness of vehicles.”
The Commissioner further stated, “Whether Mr Wood entered into an arrangement which he knew was illegal, or whether he was so naïve and incompetent that he failed to realise that the arrangements amounted to lending his licence, scarcely matters. Neither possibility reflects any credit on Mr Wood.”
Operators need to be cautious to make sure they do not become unintentionally involved in a case of fronting.
C E Transport Law has extensive experience in cases where fronting is alleged. If you need any assistance, then please call us to discuss further.