Remember predictions of all those uniformly bland vehicles being shunted out of the company car park to make way for motors of the employees’ choice? Well, it didn’t happen on anything like the scale expected, despite a series of repressive taxation moves against the company car culture. And all the indications are that it’s less likely to happen now that government is intent on making business motoring greener and safer.
Studies suggest that those offered cash inducements to opt out of company cars are choosing vehicles which are less likely to match the environmentally friendlier fleet versions. Moreover, employers stand more risk of transgressing Duty of Care regulations when employees are driving around on company business in vehicles for which they’re responsible for insuring and maintaining.Simply stated, regulations embodied in Duty of Care have ramifications for every fleet operator in the country, with severe penalties for those who don’t take care. If that seems melodramatic, a canvass among some of the more enlightened members of the fleet community reveals a growing recognition that the next few years are likely to witness an upsurge in litigation as this bit of Health and Safety at Work legislation is tested in the courts.
A review of Duty of Care should be viewed in the context of the growing influence that government is having on fleet composition and usage. Speaking at a conference staged by Fleet News in October, David Jamieson, parliamentary under secretary of state with responsibility for transport, noted that the government’s objectives as they affect fleet management are to promote environmental wellbeing and improve road safety.
In the interests of the first, the government is encouraging fleets to buy cleaner cars which use less fuel through the introduction of a company car taxation system which favours low carbon emissions. The stated intention is not to prescribe the type of fuel used or the evolution of future vehicle technology, but rather to set the guidelines and allow the motor industry and its customers to make the appropriate choices.
This emphasis on care for the environment is evident in other ways; for example, through enhanced capital allowances for the most fuel efficient cars. An indication of the government’s ambition is provided by the Transport White Paper, published in July, which anticipates cars capable of achieving 75 mpg by 2012. On the evidence to hand it is clear that fiscal measures will be used relentlessly to fashion the composition of fleets to meet the government’s environmental commitments under the terms of the 1997 Kyoto Protocol on climate change.
Meanwhile, there is pressure to improve fleet safety as an integral part of the government’s campaign to bring about a 40% reduction in road accidents by 2010, compared with the death and injury toll during the period 1994-98. Jamieson reported that company car drivers are 50% more likely to have an accident than other drivers, while around 33% of all road accidents involve people who are going about their business.
Of course, the notion that employers have a responsibility to ensure the welfare of their employees and other road users is hardly new. However, the current emphasis on occupational road safety is a significant new development which will add cost and complexity to fleet management.
An idea of the scale of the task ahead may be gauged from a safety guide from Lex Vehicle Leasing. It contains no fewer than 35 recommendations aimed at improving fleet safety, involving pre-employment and health checks for drivers of company vehicles, the verification of information, induction and driver training courses, vehicle maintenance and checks, and appraisal processes.
Many of the requirements fall into the realm of common sense and are already embodied in the practices of some fleets. Even so, there is a need to ensure that safety remains constantly at the forefront of a fleet’s everyday operations and, of equal importance, that there is documentary evidence of compliance with the government’s suggested five-pronged approach to risk assessment (see table).
Anecdotal evidence suggests that the importance of Duty of Care has been taken on board by those responsible for managing the larger fleets but that there is still a need for them to educate and convince their senior management. Also there appears to be a widespread failure on the part of medium and, especially, smaller fleets to understand the topic’s importance.
Another speaker at the Fleet News conference, Brian Back, chairman of the British Vehicle Rental & Leasing Association, noted that research conducted by Professor Peter Cooke of Nottingham Business School shows a worrying 79% of companies have not compiled a car fleet risk management strategy, 73% do not identify company car operations as a strategic risk and 25% do not report accidents involving business vehicles at board level. For the record, he also reported that 38% of fleet executives are not aware of the Health and Safety Executive’s publication ‘Driving at Work: Managing Work-Related Road Safety’.
Some companies may be tempted to adopt a casual approach in the hope that nothing will happen to them, but this is a very high risk strategy. For a start, directors and officers may be held responsible personally for injury and loss of life involving a company vehicle, and accordingly face criminal sanctions. In addition, companies may face charges of corporate manslaughter.
According to Richard Hill, head of risk management at Lex Vehicle Leasing, there are strong benefits from adopting a proactive fleet safety strategy which stresses driver training, although the cost advantages are difficult to measure accurately since it is never possible to be sure how many accidents have been prevented. Evidence to date, though, shows that accident frequency rates have fallen where action plans have been implemented, while average accident claim costs have declined by as much as 34%. The potential for reducing fleet costs is evident when it is realised that, taking Lex as an example, of the 55,000 vehicles that the company administers on accident management, an astonishing 27,000 incidents are handled each year at an average cost of £870 .
Risk assessment checklist
Recommended Reading and Websites
Driving at Work (Department for Transport)Driving at Work: Managing Work-Related Road Safety (Health and Safety Executive)Profit Through Safety (Professor Peter Cooke, Nottingham Business School)Safety Guide: An Insight into Duty of Care legislation (published by Lex Vehicle Leasing)www.dft.gov.uk (Department for Transport)www.hse.gov.uk (Health & Safety Executive)