Decision

Decision for Dancon Services Ltd

Published 15 October 2024

0.1 IN THE SOUTH EASTERN & METROPOLITAN TRAFFIC AREA

1. DANCON SERVICES LTD OK1117843 & OF2056101 & OD2062068 Under Consideration

2. TRANSPORT MANAGER – DANIEL PATRICK LYONS (OK1117843)

3. TRANSPORT MANAGER SHAUN ALAN WRIGHT (OF2056101)

3.1 GOODS VEHICLES (LICENSING OF OPERATORS) ACT 1995

4. TRAFFIC COMMISSIONER’S WRITTEN DECISION

5. Background

The full history of the Public Inquiry set out many relevant matters in some detail and they are therefore included here for ease:

Both OK1117843 and OF2056101 had unsatisfactory MIVRs recorded against them. At this time the new application for OD2062068 was also made.

5.1 The MIVR for OF2056101 noted the following shortcomings:

On 02 May 2023 an unannounced visit took place. The outcome was unsatisfactory.

Operating centre:

• During the week the vehicles are parked in laybys and service stations and only park at the operating centre over the weekend.

                        Inspection / maintenance records:

• From analysed PMI sheets there was only one brake performance assessment evidenced, all the rest were visual only with no road test
• A lack of recorded defects
• Vehicle safety and defect recall checks were not recorded

                        Driver defect reporting:

• Drivers would find a defect and repair it before filling out a ‘nil’ defect report

                        Wheel and tyre management:

• No separate system for checking and recording such checks

                        Transport manager / responsible person assessment

• Study time not recorded

5.2 The MIVR for OK1117843 noted the following shortcomings:

                        On 28 June 2023 a MIVR was conducted and noted the following shortcomings:

                        Inspection / maintenance records:

• Maintenance reports did not meet the recommended standard
• High number of incomplete inspection records
• Some inconsistences on how brake pad wear was recorded
• Wall planner did not show the date of due inspection
• No evidence of VOR system in use
• Ineffectively managed safety defect an recall system
• None of the vehicles had any form of brake performance assessed

                        Driver defect reporting:

• High number of driver detectable defects found on inspection records that did not have any corresponding defect reports
• Very few defects were reported by drivers and one specified driver who had not been completing the report correctly
• All driver defect reports which did have defect were not given to a responsible person
• Drivers and yardmen were carrying out minor running repairs but there were not being reported on the driver defect

                        Inspection facilities and maintenance arrangements:

• No contract produced for Renault Trucks. This has been removes since 11/07/2023
• Operator had 2 vehicle fail with safety critical defects

                        Vehicle emissions:

• Section for vehicle mileage not completed

                        Wheel and tyre management:

• No tyre date codes recorded
• No evidence of wheel torque being used on vehicle

                        Prohibition assessment:

• At the visit 2 prohibitions were issued
  • Vehicle DL18DSL was issued an immediate prohibition for the offside 3rd axle inner tyre being very low on pressure (recorded at 41 psi), likely to over load the other tyre on a twin fitment
  • Vehicle RX68YCR was issued with a delayed prohibition for a serious air leak with the foot brake applied which was coming from a pipe at the ABS/load sensing valve and could be heard from the drivers seat, but could just be sustained with engine on “fast idling” with brakes applied

                        Transport manager/responsible person assessment:

• Ineffective control due to number of shortcomings identified

                        TEVRs were then also conducted, the following issues were highlighted:

5.3 OK1117843

On 06 October 2023 TE Mike Brown issued a 99ZA letter to the Operator requesting drivers hours/tachograph record for all drivers and vehicles from 1st January to 31st August 2023. This was analysed and no driver hour infringement were identified.

                        However some issues were found with the vehicles locked in dates:          

• Both vehicles WX17YFB and WX17YFC, vehicle data unit was locked to Dancon Services Limited, during the period 24/10/2022 to 10/11/2023
• However the information recorded on VOL showed these 2 vehicles had been removed on 16 May 2022. Both vehicles WX17YFB & WX17YFC were then, on the same day, specified on Dancon Haulage Limited. However, the vehicle data unit from either vehicle was never locked in by Dancon Haulage Limited
• Vehicle LK66XXF which had been locked to Dancon Services Limited, from 10 September 2021 was not added to the list of vehicles specified as being operated by Dancon Services Limited until 13 April 2022. Prior to this it was specified on Dancon Haulage Limited between 15 July 2021 and 13 April 2022

The TE comments that this “shows that the 3 vehicles in question although specified to Dancon Haulage Ltd, they were never locked in to this operator and that during the majority of the same time they were specified to Dancon Haulage Ltd, they were actually locked into Dancon Services Ltd, which would indicate, Dancon Services Ltd had control of these vehicles.”

On the 14 November 2023 a TEVR was conducted. The following was recorded:

• Management control scored 1 point as Mr Lyons could not explain why the vehicles had not been locked out when they were removed from operation
• Driving licensing and training scored 2 points as the Operator engages all drivers on a self employed basis with no contract available
• Drivers hours/ record keeping scored 1 point as no evidence in drivers file to show they are aware of disciplinary system

In addition, during the visit TE Brown noticed that there were service records for WX17YFB and WX17YFC. The records showed “Dancon Services Ltd” as the customer. The date on the front of both records have been overwritten so was not completed clear however the date on the last page clearly showed the date 22 August 2022. On the 22 August 202 both vehicles were specified on the licence OK2018188 Dancon Haulage Ltd.

After the visit, TE Brown reviewed the information he had gathered and found evidence the operator had been using more vehicles than authorised:

• During the period 16 May 2022 to the 6 July 2022 the operator had the maximum number of vehicles allowed which was 29. However, this number did not included WX17YFB & WX17YFC, although during this period they still had control of the vehicles data unit.
• During the period 10 September 2021 to the 12 April 2022 the operator had the maximum number of vehicles allowed which was 29. However, this number did not include LK66CCF, although during this period Dancon Services Ltd had locked in the vehicle and as such taken control of the vehicle.

TE brown comments that “as these vehicles were specified on someone else’s licence there is also a possibility they had done so with the intent to deceive. Namely that Mr Lyons has been using OK2018188 Dancon Haulage Ltd licence to operator additional vehicles as part of his own operation OK1117843 Dancon Services Ltd”.

An interview with Mr Lyon was then scheduled for 19 February 2024. On 16 February 2024 TE Brown received an email from Caroline Evans that Mr Lyons would not be attending the interview as the interview was in relation to a summary only offence and were out of the statutory time limit.

5.4 OF2056101

On 14 November 2023 a TEVR was conducted. The following issues were highlighted:

• Driver licensing and training scored 2 as all drivers are self-employed
• Drivers hours/record keeping scored 1 as could not establish if drivers were are of disciplinary system as no contact

TE Brown identified that the Operator only has self-employed drivers who are all sourced from the agency “Conscar Limited”. There was no contract available between either companies or drivers and the Director. Mr Lyons stated he was not involved in the drivers’ tax affairs.

5.5 Areas for consideration at Public Inquiry:

• New application
• Operating more vehicles than authorised
• Conditions – failure to notify a change of maintenance arrangements
• Prohibitions
• Statements – to notify the Traffic Commissioner of any changes within 28 days – safety inspection / maintenance by specified firm – abide by conditions imposed on the licence – vehicles normally kept when not in use at the stated operating centres(s)
• Undertakings – vehicles and trailers to be kept fit and serviceable – keeping or records - drivers to report defects – Traffic Commissioner to be informed of any changes
• Material change
• Operators licence is not to be transferable
• Transport manager issues
• Application to add a new transport manager
• Professional competence
• Good repute
• Financial standing
• Curtailment
• Suspension
• Revocation
• Disqualification

There are also links to Dancon Haulage Limited OK2018188, which was revoked following a Public Inquiry on 31 May 2023.

5.6 Additional information

It is important that that the specified director of the company, Daniel Patrick Lyons, attends the Public Inquiry in person.

Daniel Patrick Lyons and Shaun Alan Wright have been called to tis inquiry to consider their repute.

The Traffic Commissioner recommends that Richard Fredrick Holmes, proposed Transport Manager, attends the inquiry.

6. Hearing

The Public Inquiry commenced and concluded on 22 May 2024. I heard oral evidence from DVSA Vehicle Examiners (‘VE’) Barry Gallagher and Sebastian Abbott and Traffic Examiner (‘TE’) Mike Brown. On behalf of the Operator and Applicant I heard from Daniel Lyons (Director and Transport Manager), Shaun Wright (Transport Manager) and Richard Holmes (proposed Transport Manager). All parties were represented by Miss Carolyn Evans, solicitor. The case finished late in the day and having originally asked to do an oral closing, I subsequently received a request for a period to submit a supplemental written closing submission. In light of the seriousness of the issues, I agreed. Those submissions and further documentation running to some 91 pages were received by me on 04 June 2024. A period of leave and other unavoidable commitments in the intervening period means that regrettably this decision is delayed beyond the usual 28 days.

6.1 Issues

In December 2022 Danon Services Ltd applied for a Licence in the West Midlands Traffic Area. Whilst that application was being processed DVSA was investigating Dancon Haulage Ltd, which identified links with Dancon Services Ltd whereby the Licences did not appear to be operated separately. The Director of Dancon Haulage Ltd, Tracey Lyons, is the sister of the Director of Dancon Services Ltd, Daniel Lyons. There followed wider scrutiny of Dancon Services SEMTA and Eastern Licences. Further, the application for a Licence in the West Midlands was held in abeyance whilst the investigations were completed. The DVSA reports identified alleged breaches of undertakings in relation to vehicle roadworthiness and the traffic side of the business. Those investigations also found identical issues in relation to Dancon Haulage (‘DHL’)/Dancon Services (‘DSL’) and the absence of separation. Throughout the relevant period Mr Lyons was the sole Transport Manager on the SEMTA Licence and Mr Wright the sole Transport Manager on the Eastern Licence. Mr Lyons is the sole Director and Mr Wright held the title “Operations Manager” over and above the specific Transport Manager duties. The DVSA investigation also identified vehicles on the DSL Licences were operating in the West Midlands Traffic Area, despite that application remaining under consideration and no interim Licence in force. Finally, there is the allegation that the drivers are in breach of employment rules and principles of ‘control’ where full-time drivers are engaged through a “sort of” agency.

In light of the DVSA allegations it is for me to consider the stable establishment, good repute and professional competence of Dancon Services Ltd, together with the good repute of its Transport Managers and proposed Transport Manager. On 11 June 2024 I granted a 3-month time limited interim for 10 vehicles on OD2062068, with a comparative reduction on the SEMTA Licence pending this written decision at Mr Lyons request.

6.2 Approach

There is clear and consistent case law from the Upper Tribunal that a Traffic Commissioner is entitled to treat the conduct of a sole director effectively as the conduct of the Limited Company and good repute or fitness is determined accordingly. Such an approach has received approval from the appellate tribunal on several occasions, such as 2013/008 Vision Travel International Limited and T2013/61 Alan Michael Knight. As well as the operator licensing obligations, a company director must exercise his or her statutory duties of demonstrating independent judgement, skill, care and diligence, as per sections 173 and 174 Companies Act 2006.

I have not set out all the evidence as it is a matter of record in the papers and by way of transcript.  I have referred to material evidence relevant to my findings.

Operators and Transport Managers have deemed knowledge of the advice and guidance in the public domain, as per the Upper Tribunal in 2012/030 MGM Haulage & Recycling Limited.

It has not been possible to separate out the non-compliance as between the SEMTA and Eastern Licences because they appear to have been effectively run as one through Mr Lyon’s as Director and Mr Wright as Operations Manager. Mr Wright may have focused more on the Eastern Licence in terms of maintenance, but Mr Lyon’s had spread himself too thin and it is obvious from Mr Wright’s engagement in relation to DHL (see below), that he was engaged in the transport operations across the board.

7. Dancon Services Limited/Dancon Haulage Limited.

7.1 Merging of operations

The Senior Traffic commissioner sets out in paragraphs 56 to 58 of Statutory Document 0 the relevant legislation and case law. Ostensibly who is the employer/Operator is linked to ‘control’. If an entity pays the drivers (even if via a ‘scheme’), tells the drivers what to do, has the power of hire and fire, pays the insurance, maintenance, downloads the drivers cards etc then it clearly is the Operator. Even on a common-sense approach with no knowledge of operator licensing. Further, as per paragraph 14, Mr Lyons and Mr Wright have deemed knowledge of the relevant guidance.

I am asked to accept that the two business had become merged but there was no intent to mislead and for the most part DSL had a sufficient margin for the operation. The facts and evidence do not support this. From the outset there was a lack of candour. My written decision in relation to DHL is at pages 320-327 of the PI bundle. However, I include the relevant extracts below: -

The background section includes:

Ms Tracey Lyons is the sole director and nominated transport manager for Dancon Haulage Limited (“DHL”). Ms Lyons was therefore called to PI in two separate capacities….The operator received an S marked prohibition on 03/11/22 for “Tyre damage to tread area and cord or cords are exposed”. 

The Vehicle Examiner (VE) noted the operator is engaged in the collection and delivery of ready mix concrete. They have links to TarMac services through an arrangement in whereby TarMac Services give the operator contracts and regular work referred to by the operator and her adviser Sean Wright as day contracts or spot hire. Tarmac Services insure the operator vehicles under a binder policy (copy included in Public Inquiry brief). the drivers are not employed or paid for by the operator they come forma  company called Conscare. When asked if this was a driver agency the operator Tracey Lyons said “yes sort of” The operator was accompanied by Sean Wright at the inspection he had all of the drivers details and documentation. He was not employed by the Operator.

The VE found the following shortcomings:-

• Unauthorised operating centre Express Concrete, Standard Wharf, Manor Road, Erith DA82AD being used for approximately 3 months, due to landowner seeking the land for development.

• The VE noted adequate parking for 4v no formal parking agreement was made available.

• PMIs on old copies of Mercedes Benz electronic sheets but carried out by UK Diagnostics Solutions Ltd

• No metered brake tests. PMIs signed off as road worthy despite showing a brake lining measurement of 0mm.

• PMIs not completed correctly with no customer address and location of PMI completed. There were also mileage discrepancies and tyre dates not recorded.

• One inspection frequency exceeded

• VOR system not in place

• DDR completed on London Concrete book and minimal defects recorded, no provision to record who the defect was reported too.

• Maintenance provider was mobile at the unauthorised operating visited there was no covered vehicle inspection facility

• No emission control systems in place

• No systems in place for wheel/tyre management

• The drivers not employed by the operator; they are all employed by Conscare.

The VE noted Ms Lyons as the nominated Transport Manager completed her CPC on 22/08/17 no further CPD completed. The VE stated “when I explained to her maintenance records show no brake performance checks and that this is not in line with the GTMR, she stated that the GTMR is not law…..

9) The VE was a measured and fair witness and I accept his evidence. The VE adopted his written report (pages 49 to 78) unamended and confirmed that since he signed it off the operator had no further MOTs or roadside encounters. The VE confirmed announced visits to an Operator usually allow for one week’s notice or thereabouts, but Ms Lyons was not helpful. When he contacted Ms Lyons to arrange the visit, she said the vehicles were on hire and out and about and she would get back to him. Ms Lyons failed to do so and so the VE called again and agreed a date (29/11/22), which meant the Operator had approximately 3 weeks’ notice of his investigation. During the call confirming the arrangements, Ms Lyons stated that the vehicles were at “Express Concrete”, which is not the designated Operating Centre. It was only then that the Operator applied to add Express Concrete as an Operating Centre. 

10) On 29 November 2022 Ms Lyons was accompanied by a man who introduced himself as ‘Sean Wright’ and said, “I am advising Tracey”. At one point Mr Wright intimated that he worked in the yard. The records were in one large ‘bag for life’ containing lever arch files. The VE has asked Ms Lyons twice who Mr Wright is employed by, but she said she did not know. It was after the visit that a fellow Examiner said it was likely Shaun Alan Wright, Transport Manager on one of the Dancon Services Limited’s Licences. The following VE oral evidence of knowledge and documents obtained during the visit and before referring the case to OTC is of direct relevance to this decision: 

The VE drove passed the previous operating centre and it was being demolished. It was no longer suitable or available. Ms Lyons admitted being based at Express Concrete for 3 months. 

Ms Lyons deferred all responses to questions about drivers and their training to Mr Wright and Mr Wright produced such documentation as were available.  

When the VE tried to engage with Ms Lyons generally, she was vague and mainly looked to Mr Wright. 

When it came to the maintenance systems Ms Lyons had little of relevance to bring to the conversation. The best he could get from Mr Wright and Ms Lyons was that there is a mobile fitter who came to the yard, but he may take a vehicle away for work to be done. 

There are no written agreements in relation to ‘spot hire or day hire’. It is all verbal and that is just the ways it is done. It may have just been general sub-contracting but there is no supporting evidence. 

Ms Lyons was able to explain that the drivers were sourced via Conscar a ‘sort of’ agency and she confirmed they are not employed by DHL. The driver daily defect sheets show drivers engaged full time and Ms Lyons told the VE that the drivers take the vehicle keys home at night. This suggests that the drivers should be directly employed by DHL to meet HMRC guidance and ensure proper control over the drivers 

Ms Lyons blamed the maintenance contractor for the recent “S” marked tyre prohibition without any apparent wider investigation.  

After the visit, once aware of Mr Wright and the connection to Dancon Services Limited, the VE asked Ms Lyons about DSL. At first Ms Lyons said she did not know Dancon Services. It was only when pressed Ms Lyons acknowledged the director of Dancon Services Limited is her brother but said she did not know anything else.  

The VE told Ms Lyons that he knew at least one of her vehicles was previously specified on her brother’s Licence, but she was again vague. The VE made it clear that the connection would be pointed out in his report, and she should respond at that point. She does not mention it at any point. 

The VE requested a copy of the ‘binder’ insurance policy for the Operator’s specified vehicles from its insurers. The policy produced by QBE (page77) is for Dancon (Services) Limited. Without wider explanation it does not cover DHL. 

8. Determination

Based on the evidence summarised above and the Operator’s own admissions in writing, I record the following adverse findings: 

• Unauthorised use of an operating centre for at least 3 months – section 26(1)(a) of the 1995 Act, which is also a criminal offence as per section 7 of the said Act.

• The Operator’s vehicles have received prohibitions – section 26(1)(c)(iii) of the 1995 Act.

• The Operator failed to fulfil the statement made on application that vehicles would be inspected six weekly - section 26(1)(e) of the 1995 Act.

• It has failed to meet the Licence undertaking to keep vehicles fit and serviceable - section 26(1)(f) of the 1995 Act.

• Material change: It changed maintenance contractor without notifying OTC within 28 days – section 26(1)(f) of the 1995 Act.

There is an inaccurate belief in some parts of the industry that the Guide to Maintaining Roadworthiness (GTMR) is ‘mere’ guidance and can be dispensed with if the Operator chooses any different approach. The GTMR contains a mixture of legislative requirements and best practice (alongside setting out what is the ‘bare minimum’). Whilst not statutory guidance, GTMR is a collaboration between DVSA, TCs, trade associations and other industry experts. Compliance with GTMR for the operational fleet mix in question, whilst not having statutory authority, is strong evidence of appropriate and safe systems. If GTMR is put to one side then, subject to the legal provisions, the substitute must be equally robust in ensuring roadworthiness. By way of example Regulation 18(1) of the Construction and Use Regulations 1986 requires that “Every part of every braking system and the means of operation thereof fitted to a vehicle shall be maintained in good and efficient working order and properly adjusted”. This legal requirement underpins what then follows in GTMR about measured brake performance testing at each PMI. As per the Upper Tribunal in 2022/1227 Lineage UK Transport Limited “…brake testing procedures are of particular importance from the point of view of road safety”. The importance of GTMR in assisting the industry was recognised in 2014/058 Angus Smales t/a Angus Smales Eventing and Lineage confirms it remains as relevant as ever. Ms Lyons disdain for GTMR evidenced by her response to the VE on 29/11/22 (paragraph 5 above) is strong evidence toward explaining the chaotic position the Operator is in.  

The call-in letter did not specifically refer to ‘fronting’ (as defined by the UT in 2012/071 Silvertree Transport Limited) and Dancon Services because it was not investigated to that level in relation to DHL. From the evidence at the hearing, I am satisfied this is, at least in part, because of Ms Lyons’ lack of candour in the face of direct questions from the VE. The call-in letter does say “In particular the Traffic Commissioner will consider the prohibition notices, your application to surrender the licence and links to Dancon Services.” Whilst acknowledging the seriousness of the case, Ms Lyons letter to my office fails to provide any further explanations on any aspect of the call-in letter and PI bundle. Ms Lyons failed to submit records and other evidence required to assess whether any improvements happened after the DVSA visit and if mandatory grounds to hold a Licence remain in place. These documents may also have shed some transparency on any arrangements with Dancon Services. A request to surrender the Licence does not override the obligation to co-operate, especially where there may be mischief behind such a request. Ms Lyon’s knew that the decision on whether to accept surrender would only happen after consideration of all the evidence at the hearing conclusion. It was in her interests to submit anything helpful, with external help if necessary. 

To check the veracity of Ms Lyons statement that she knew nothing of her brother’s business, I asked the PI caseworker during the hearing to contact the VOL team for more details of self-service users on Dancon Services than in the bundle Case Summary. The VOL team confirmed that Shaun Wright and Ms Lyons were granted VOL user accounts for Dancon Services on 15 March 2022 by her brother (the sole director Danny Lyons) and Danny Lyons removed her access on 12 April 2023. This undermines Ms Lyons evidence to a significant degree - why would someone with no knowledge/involvement/connection need to access Dancon Services Licence record - when taken together with vehicle specification links.  What is apparent, in the absence of further oral and/or written evidence, is an unacceptable blurring of the lines between DHL and Dancon Services. The point of effective systems, which in turn should include proper internal (and as appropriate) external auditing, are to ensure demonstrable arms-length, safe and fair transport operations. The evidence before me on balance demonstrates that they are absent here to a significant and unacceptable degree.  

The breaches of the legislation, licence conditions and undertakings are inextricably linked with Ms Lyons failure to properly undertake the role of transport manager in a professional and transparent manner. It remains unclear whether she took any meaningful part in the management of the transport operations. For the majority of the VE investigation Ms Lyons was vague and deferred on certain topics to Mr Wright. These are not the actions of an individual exercising continuous and effective management of the transport operations. The evidence in this case demonstrates that Ms Lyons discarded control over safety to a significant degree

In the pre hearing written representations the Operator suggests that Ms Lyons found the MIVR stressful and did not respond well to questioning (para 49).  The Operator submits that these were two family businesses being run alongside each other from the same office doing the same work. It was not their intention to blur the lines (there was no reason why Mr Lyons could not simply grow his own business) but it is accepted that this is what ultimately occurred (para 52). If Mr Wright had not been involved in the DHL MIVR and if Ms Lyons did not lie about the involvement of Mr Wright and links to her brother’s business then this may be a plausible assertion. When I raised paragraph 10 of my DHL decision with Mr Wright he said that he and Ms Lyons work in the same office, she was stumbling with the questions, and he simply wanted to help. He acknowledged in hindsight that he should have made full disclosure to the VE that DSL effectively ran the vehicles.  Mr Wright’s evidence is not compelling. By November 2022 there was no clear blue water between the two entities.  DHL had 3 weeks’ notice of the MIVR and so Mr Lyons, Mr Wright and Ms Lyons had 3 weeks to prepare. Mr Wright did not just happen to be in the office. Mr Wright and Ms Lyons went to VE Simpson with a ‘bag for life’ containing records in a lever arch file. Ms Lyons deferred to Mr Wright on many questions, but Mr Wright only described himself to the VE as an adviser and intimated that he sometimes worked in the yard. Ms Lyons said twice that she did not know who Mr Wright worked for.

I have asked myself if Mr Wright’s submission that he did not think he was doing anything wrong with his answers to the VE in November 2022 is plausible. Mr Lyons confirmed to me in evidence that the ‘DHL’ vehicles were doing DSL’s Tarmac work. DSL held all the records. DSL were paying the drivers through ‘Conscar’ and DSL was doing all the work that a director and transport manager should be doing. There is no evidence before me that Ms Lyons ever ran DHL as a separate business. Even if she did that approach was long gone by November 2022 when a VE will look at up to 15 months of records. Mr Wright joined DSL as Operations Manager in 2018. When the Eastern Licence was granted in June 2022 he included being the nominated Transport Manager for that Licence to his duties. Even if there was no intention for the blurring of the lines, there was a benefit in trying to hide the blurring when the VE attended in November 2022. The ‘benefit’ was for any non-compliance not to taint the repute of DSL, who from June 2022 had the prospect of further valuable HS2 work which by 15 December 2022 say the West Midland’s Licence application being uploaded by Mr Lyons.

On balance, whatever the intention was separation did not happen. If Ms Lyons and Mr Wright thought all was in order there was no need for this opacity. Mr Wright’s representation to the VE were so far from the truth that I find it more likely than not a deliberate attempt to mislead. This impacts on the good repute of DSL and Mr Wright’s own good repute as a Transport Manager. As does the fact that DSL were operating more vehicles than declared on its Licence.

Even though DSL failed to include the DHL specified vehicles data for the requested 2023 period (see paragraph 23 below), the TE identified 3 vehicles which were being operated by DSL whilst nominated on DHL prior to the period he requested. The ‘merging’ of the Licenses is admitted whether intentional or not. DHL was authorised for 15 vehicles until after the ‘S’ marked prohibition on 3 November 2022, when it was voluntarily reduced to 4 vehicles. The VOL record shows that from 15 July 2021 there were 3 vehicles continuously specified on DHL and from 13 April 2022 there were 4 vehicles continuously specified, right up to the revocation date of 18 April 2023. In addition, between 16 May 2022 and 8 September 2022 there were 6 vehicles specified on DHL. Those vehicles were in the possession of DSL and should have been specified on DSL Licences within 28 days of first being in possession. For some of that period there was no margin and authorisation exceeded. The extent cannot be determined due to the opacity previously referred to.

On the evidence before me set out above, I find that it is more likely than not that DSL have operated up to 6 vehicles more than specified over a sustained period, the “S” marked prohibition should most likely have attached to one of the DSL Licences and it would have brought forward the failings in the DSL systems and approach sooner (noting the MIVR for DHL was 29/11/22 and for DSL 2 May 2023 Eastern and 28 June 2023 SEMTA). Accordingly, I make the decision under section 26(1)(b) and (h) of the 1995 Act in paragraphs 1 and 4 above. Where there is opacity I cannot say if all the unlawful operation happened on the SEMTA Licence or if it included the ETA Licence. These finding also impacts good repute, more of which below.

8.1 Compliance

In terms of maintenance, the DVSA original investigation findings are set out in paragraph 8 above. However, my starting point is what was found at the MIVR for DHL not the original DSL reports for the reasons stated above. There are 6 and 7 months between the DHL and DSL DVSA in person attendances. DSL were on notice form March 2023 that it was also to come under DVSA scrutiny (page 186). In terms of the SEMTA Licence there is a direct correlation with those for DHL even 7 months later. A maintenance contract with a new provider to include measured brake performance testing is signed off on 1 May 2023 for the Eastern Licence. The MIVR response (page 159/60) suggesting this was something Mr Lyons and Mr Wright had already identified for themselves is disingenuous – it came from the MIVR of VE Simpson and discussions on and after 29 November 2022. Further the attempts in SEMTA occurred later still, with a letter not going to the existing provider until 7 July 2023 (page 178).

The Traffic Examiner investigation covered both SEMTA and Eastern Licences at the same time. The section 99ZA letter dated 6 October 2023 required: All drivers’ hours/tachograph records for all your Drivers and all your Vehicles from 1st January 2023 to the 31st August 2023. This should include all drivers employed during this period including agency drivers and all vehicles operated. If unable to provide the full date range, please supply as much as you can and give an explanation for the missing dates. By then the DHL Licence was long revoked and it would have been necessary to review its own transport operations in the aftermath of the DVSA DHL investigation. If the Operator were being transparent it could and should have included the 4 DHL specified vehicles and drivers between 1 January 2023 and cessation of the DHL blurring, but it did not. The Traffic Examiner says that during his visit Mr Lyons was “unable” to give an explanation on the disconnect of “lock in” and “lock out” and DHL links (P.239). In light of the chronology and deliberate opacity set out to date, in my judgement it is more likely than not that the Mr Lyons selected not to.

By the time of this Inquiry there were improvements in relation to the Eastern Licence but there still needs to be a better audit trail to make it easier for DVSA to see when repairs are done and an assessment of roadworthiness if the repairs are to be done away from a PMI. There were also improvements in SEMTA, but it is disappointing that advice previously given by Mr Abbott to assist the vehicles having a simulated laden roller brake test (use of chains) had not been followed through at all. The traffic side of the business was positive. However, the issue in relation to vehicles being operated in the West Midlands Traffic Area and the driver employment challenges remain.

In light of the compliance issues and admissions set out, I make formal findings under section 26 (b), (c)(iii), (f) and (h) of the 1995 Act as per paragraphs 1 and 4 above. These finding also impacts good repute, more of which below.

8.2 Vehicle Operation in the West Midlands Traffic Area (‘WMTA’).

On 15 December 2022 DSL applied for a Licence authorising 10 vehicles in WMTA. The application nominated Mr Wright as the Transport Manager and an operating centre at BBV Main Compound, B4115 Ashrow Road, Ashrow, Warwick, Warwickshire, CV8 2TZ. Whilst also in a different traffic area, it is 22 miles from the nearest ETA operating centre and that was only available for 8 vehicles. The other operating centre is a further 10 miles away. The two closest SEMTA operating centres (N1 and NW10) would only cover 3 vehicles). The definition of an operating centre in section 7(3) of the 1995 Act is “ …. the base or centre at which the vehicle is normally kept, and references to an operating centre of the holder of a heavy goods vehicle licence are references to any place which is an operating centre for heavy goods vehicles used under that licence”. The WMTA application was to support further extension work on HS2.

The MIVR on the DSL ETA Licence in May 2023 conducted by  VE Barry Gallagher includes …. “3a. There are two authorised operating centres specified, both of which are “TARMAC” run HS2 sites. 3b. During the week the vehicles are parked in laybys and service stations and only park at the operating centres over the weekend” (page 141). Where vehicles are operating in this way, unless tramping, they are ‘normally kept’ in that area. After receiving the MIVR response the VE includes in his conclusions “The Director Mr Lyons and the Transport Manager Mr Wright have accepted there is an issue with parking at the operating centre during the week and have provided mitigation. A meeting with high level managers at TARMAC/HS2 has taken place to try to resolve this issue. I feel confident that the operator is moving towards a solution which is acceptable” (page 152). This was signed off by the VE on 2 June 2023. There is no reference on the SEMTA MIVR conducted by VE Sebastian Abbott to My Lyons or Mr Wright mentioning vehicles parking outside of SEMTA.

The Operator’s representations received on 10 May 2024 include for the ETA Licence at para 26 “…drivers do still occasionally tramp out over-night. The HS2 line is approximately 140 miles long, and if a driver cannot return to the operating centre at the end of the working day he will stay out overnight. All vehicles return to the operating centre at the weekend when not in use” (my emphasis”).  In relation to the WMTA application those representations include at para 37 an admission that it moved 10 SEMTA specified vehicles to the BBV compound in Coventry. There is no exact date given for the decision to take this step or when it was done. In the post hearing submission received on 4 June 2024 at paragraph 20 it says that there is a sleeper cab in every vehicle, drivers are frequently away from home, and they park at the operating centre “wherever possible”. This may be so but the application for the Kenilworth compound is a direct acknowledgement that this is where the vehicles need to be normally kept meeting the licensing requirements and deliver the HS2 contract in that area. The reference to drivers sleeping in cabs should only be relevant beyond that requirement. Further in so far as the work is “agile” it may be more than one compound specification is needed. This is an approach regularly adopted for motorway and other strategic road network repairs and improvements. HS2 is no different and indeed slower moving in terms of works.

Mr Lyons expressed disappointment and the failure to receive an interim Licence. An interim Licence is still a Licence and therefore an interim cannot follow unless a TC/DTC is satisfied on good repute and professional competence – section 24(2) of the 1995 Act. No matter the amount of chasing said to have been undertaken (which is not recorded on the Licence), the outcome would be the same whilst DVSA were uncovering issues. The DHL investigation on 29 November 2022 onwards should have served as a warning to DSL that it may come unstuck on its own Licences let alone an application. In June 2023 it offered to reduce the SEMTA Licence by the same number granted on an interim for WMTA but again this misses the point. If an Operator and/or Transport Manager close their eyes to the obvious then negative outcomes from purely commercial considerations are entirely at the Operator’s risk. I do agree with the Operator that OTC Licensing could have done more to keep the Operator informed on progress formally and this will be taken forward elsewhere.

The reality is that there remains an opaqueness about what was done and when. I agreed a time limited interim post hearing only to regularise the position pending this decision, so vehicles did not have to return to SEMTA after the hearing. That does not in any way undermine what I have said about interim licences. I do find there has been unlawful operation of vehicles in WMTA by DSL over a sustained period. The only mitigation is that since the revocation of DHL, it has not included operating beyond the authorisation.

8.3 Driver Employment

TE Brown identified that the Operator only has self-employed drivers who are all sourced from an agency called “Conscar Limited”. There was no contract available between either companies or drivers and the Operator. Mr Lyons told the TE that “he is not involved with the driver’s tax affairs” (p.175). The mischief here is three-fold (i) Mr Lyons has deemed knowledge that the arrangement does not comply with the law, operator licensing requirements and HMRC rules; (ii) even after raised by the TE, Mr Wright failed to take any steps to regularise the position until after the call-in letter and (iii) the changes as of 22 May 2024 were limited. The reasoning is not just around fair competition but also ‘control’ and the ability to direct and discipline the drivers. A fuller description is to be found in the STC Statutory Document 0 (paras 58 to 60), 2019/069 GS Couriers (Nottingham) Ltd “It is well established that unless a driver is an owner-driver, it will be a very rare case in which the HMRC will conclude that the driver is legally self-employed” and in the full decision of 2019/54 Bridgestep Ltd & Tom Bridge. These principles are well established and there is no good reason for any Operator to enter into commercial contracts where the driver relationship is not appropriate. The post hearing submissions include reference to challenges across the HS2 arena but that is an arena the Operator entered into voluntarily and has expanded its obligations since 2022 with full knowledge. I am referring the general issue back to DVSA to take up with those responsible for HS2 delivery in relation to all contracted Operators. This Operator is expected to co-operate with any requests arising. I reserve the right to reconsider this aspect if further information comes to light. [I have arranged for a delayed publication of this decision to enable any further steps to be taken and any pre-publication redaction considered.]

9. Conclusion

The failings listed above are disappointing for an Operator which has held a Licence since 2013 and was permitted to expand into a second traffic area in June 2022. The positives and negatives are set out in detail in the oral and written evidence and representations. I gave clear steers during the hearing of my disquiet around candour and compliance up to the hearing. The Operator acknowledges that this case falls within the ‘SEVERE to SERIOUS’ band in STC Stat Doc 10 Annex 4. Shortly before closing the Operator’s solicitor acknowledged that I am likely to retain grave concerns.  I was asked to balance it with the fact the last PI was 2013 to consider the SEMTA Licence application. It then remained unblemished until 2022.

I heard evidence of some ill health which went on longer than expected. I am asked to accept in the post hearing written representations that Mr Lyons was only absent from work for 7 weeks from April 2023 (para 43). However, the pre hearing representations and Mr Lyons oral evidence confirmed that he had an aortic valve replacement on 6 March 2023. Mr Lyons had received a diagnosis 8 months earlier but was little troubled until February 2023. However, the representations received in advance stated that in the last two years (i.e back to June 2022 when the business expanded) he had suffered from “significant health complications”.

Mr Lyons does accept that he spread himself too thin for some time. Mr Lyons avers a certain acknowledgement by bringing in Mr Holmes in September 2023 as an overall Compliance Manager. Mr Holmes was a credible witness.  Mr Holmes has limited expertise in the actual role of transport manager and the practical considerations required. Mr Holmes has never worked in the concrete industry. By his own admission a lot of time initially was spent sorting out the filing system and the move across to a more electronic approach. Mr Holmes acknowledges he only found out about the WMTA application when going through the records. He told the Operator the arrangements until grant must be lawful if he is accepted as a Transport Manager. Mr Holmes accepts the way he handled that aspect needed more rigour and the learning curve has been steep across the board. Mr Holmes has assured me that he will be guarding his own good repute if accepted on the SEMTA Licence.

Mr Wright was not a compelling witness. Mr Wright fails to understand the significance of time which must be dedicated only to the Transport Manager role, as opposed to operations manager. His approach in terms of OTC forms and oral evidence demonstrated a lackadaisical approach to separation. Mr Wright told me that he did not realise that he had to be so specific. In light of the clear requirements on the TM1 form and the copious advice and guidance in STC Statutory Document No. 3, this is not credible. The TM1 form he signed in May 2022 (pages 115 – 118) fails to declare his wider operations manager role across the two Licences (held since October 2018 and to be ongoing). Mr Wright only declares a full time TM role on the ETA Licence.  Mr Wright did not disclose to OTC that he was temporarily on yet further responsibilities to support the sole director who was also the sole Transport Manager on the SEMTA Licence. The oral evidence taken together is that Mr Wright was Mr Lyons deputy in terms of compliance on the SEMTA Licence, including where his health challenges impact to varying degrees. Mr Wright did not specifically dedicate his time to then Transport Manager role at all. Whether it was as operations manager or transport manager had limited distinction in either of their minds.  Mr Wright has been inextricably linked in the unlawful operation in WMTA. This is over and above my findings that he deliberately and directly misled DVSA at an in-person investigation into DHL. It was only by a chance discussion between Examiners that the connection to DSL was made. Whilst I note the personal references with the post hearing submissions, I can only give them limited weight in light of my adverse findings.

I am asked to consider the two transport managers separately but as can be seen from the above this is challenging. There is cross over with Mr Lyons director and transport manager responsibilities with the work undertaken by Mr Wright. From my adverse findings above it is inevitable that I find both Mr Lyons and Mr Wright no longer retain their good repute as transport managers. My only distinctions are in terms of length of disqualification and separating Mr Lyons good repute as a Transport Manager in terms of his conduct informing the good repute of the Operator. 

I find the starting point for disqualification of Mr Wright as 3 years. This is not a case of breach of undertakings alone with improvements at the hearing. It involves misleading statements and false declarations. That said I am satisfied that Mr Wright has had a very salutary lesson through this PI process. Accordingly, I have significantly reduced the period and reached the decision set out in paragraph 5 above.  The period of disqualification will require him to work alongside nominated transport managers and abide by a distinction of roles. Mr Wright will need to respect the reporting lines and Mr Lyons will need to ensure that Mr Wright’s compliance role description is amended accordingly. Further I have granted a period of grace for the ETA Licence to be reviewed and appropriate applications made. It also means that Mr Wright cannot be an additional Transport Manager on the WMTA Licence now granted in full. Mr Lyons will have to review whether he wants a second Transport Manager on there.

In my judgement, the period of disqualification for Mr Lyons cannot be determined at this time. The DVSA findings on the SEMTA Licence in 2023 have no place on such an established Licence. The blending of the DHL business and WMTA operation are significant aggravating features. I note the ‘mitigation’, but lawful and fair operation and road safety comes first. In my judgement Mr Lyons does not have the capacity or competence in the common sense meaning of the term to exercise continuous and effective management of transport operations. Accordingly, I have reached the decision set out in paragraph 3 above.  It is open for Mr Lyons to apply in the future for the disqualification to be lifted and the merits assessed at that time.  

This brings me to the rest of my decision. The starting point is revocation and consideration of disqualification. Even where I step back from disqualification based on the positives, this is still a revocation case. There was unlawful operation and unsatisfactory driver employment arrangements as we sat in the Public Inquiry, the vehicles having only just returned to SEMTA from WMTA immediately prior to the hearing. On balance, I have stepped back just from revocation based on the clear history prior to 2022. However, a curtailment is appropriate and proportionate rather than a voluntary reduction. I have curtailed the SEMTA Licence, not curtailed the ETA Licence and granted the WMTA Licence in a way which enables the current operating needs to be met but limits/prevents expansion for a period for the new structure, systems, individuals and approach settle. Accordingly, I have reached the decisions set out in paragraphs 1, 2, 4, 6 and 7 above. The decision is based on my understanding of the representations, namely it will cause challenges but not materially impact. I am told this necessary for the business to remain viable. I have given an opportunity here but if the Operator faces a further Public Inquiry in the future I cannot exclude the possibility of a less favourable outcome.

I appreciate this is a long decision for what may be considered a moderate outcome. However, it is necessary here to lay out the full picture in case there is further mischief in the future, whether Operator, Transport Managers or both.

Miss Sarah Bell

Traffic Commissioner London & South East

1 August 2024