New “Chain of Responsibility” Laws Have Come Into Effect. Does This Expose Your Business to Liability?

08 APRIL 2019 COMMERCIAL & BUSINESS LAW
New “Chain of Responsibility” Laws Have Come Into Effect. Does This Expose Your Business to Liability?

Is your business involved with goods or materials that are transported by heavy vehicles? If so, the new Chain of Responsibility (CoR) laws will affect you!

The "Chain of Responsibility" is a federal policy which places a "duty of care" on parties involved anywhere along the "supply chain". You are part of the supply chain if you have any control or responsibility over any transport task. The new law extends that to include not just driving but also consigning, packing, loading or even receiving goods. It means that liability arising from the operation of heavy vehicles now goes far beyond the owner operators of the vehicles.

The new laws change 4 key areas:

Standard of Legal Duty

If you or your company get charged under the new CoR laws you might be able to defend yourself if you can prove that you took "all reasonably practicable steps" to prevent a contravention of the Heavy Vehicle National Law.

Vehicle Standards

If you are a party to the supply chain then under the new laws you are required to exercise whatever control or influence you have to ensure vehicles transporting goods in that supply chain are well maintained and road worthy.

Executive Liability

If you are an executive of a company involved in a supply chain then you are required to exercise "due diligence" to check for compliance with the CoR. Under the new laws, not only is a director considered an executive, but any person that takes part in the management of the company.

Shared Responsibility

The new laws make it clear that each party has a shared responsibility to ensure that each link in the supply chain is compliant with the CoR. As a result of this, parties cannot avoid potential liability by delegating their responsibilities in the CoR to others.

The CoR is a complex framework which has severe penalties if breached, with maximum penalties of $3,000,000 for corporations and $300,000 plus up to 5 years imprisonment for individuals.

In light of these new changes we recommend that you work out whether you or your business is part of a supply chain for the purpose of the CoR and check whether your business complies with the new laws!