Decision

The written decision for LPH Logistics Ltd t/a DPD Local (OC2014476), Iquest Logistics Ltd t/a DPD Local (OC2028573) and Jeffrey James Stubbs – transport manager

Published 9 October 2020

In the North Western Traffic Area.

Redacted decision of the Traffic Commissioner for the North West of England.

In the matter of the Goods Vehicles (Licensing of Operators) Act 1995 (‘The Act’).

Public Inquiry held at Golborne on 1 September 2020.

1. Decision

1.1 LPH Logistics Ltd t/a DPD Local [OC2014476]

On findings under sections 13(2)(c), 13A(2)(d), 13A(3)(a), 13(3)(c)(i), 26(1)(h), 27(1)(b) and schedule 3 of the Act.

A formal warning is recorded against the operator licence.

LPH Logistics Limited does not meet the requirement of professional competence as at 3 September 2020.

A period of grace is granted until 31 December 2020 for the operator to designate a new transport manager who meets the requirements of the Act.

There will be an undertaking set down as agreed by the operator and as follows:

By 30 November 2020 Carol Higham and Louise Saddik will attend an operator licence awareness training course run by a trade association (Logistics UK or RHA) or by another accredited training provider. Attendance may be in person or by participating in a virtual online course run by a training provider whose virtual course satisfies the criteria for such courses established by the traffic commissioners. A copy of the certificate of attendance will be forwarded to the Office of the Traffic Commissioner before 15 December 2020.

1.2 Iquest Logistics Ltd t/a DPD Local [OC2028573]

On findings under sections 13(2)(c), 13A(2)(d), 13A(3)(a), 13(3)(c)(i) and schedule 3 of the Act

The application for a standard national operator’s licence is refused.

1.3 Jeffrey James Stubbs

Jeffrey James Smith has lost his good repute as a transport manager, pursuant to Schedule 3 paragraph 1 of the 1995 Act. Under paragraph 16(2) of that Schedule, he is disqualified, with immediate effect and until 28 April 2022, from acting as a transport manager on any operator’s licence.

2. Background

This public inquiry was prompted by a new application for a Standard National Goods Vehicle operator’s licence by Iquest Logistics Limited OC2028573 (“Iquest”). The application was initially for an authority of 4 vehicles but has since been varied to 2 vehicles.

Iquest is a subsidiary of LPH Logistics Limited (“LPH”) which was issued with a Standard National Goods Vehicle operator’s licence authorising the use of 1 vehicle on 16 August 2018 (OC2014476). The directors of both companies are Carol Higham, Louise Saddik and Hassan Saddik.

The Transport Manager for LPH since the operator’s licence was issued was Jeffrey James Stubbs. He was also the nominated Transport Manager on the Iquest application.

Mr Stubbs was convicted on 28 April 2014 of 3 serious criminal offences within the meaning of paragraph 3 of schedule 3 of the Act.

The convictions were not declared on either the application for the LPH or Iquest licences. The Office of the Traffic Commissioner (OTC) were unaware of the convictions when processing the application by LPH in 2018 and the licence was granted under delegated powers.

The convictions were reported to my office earlier this year by Greater Manchester Police following the publication of the licence application by Iquest.

LPH has no previous regulatory history.

The calling-in letter to LPH as an existing licence holder referred to failure to comply with the licence condition to notify of events which affect good repute, the convictions of servants/agents and to notify material changes in the circumstances of the licence holder namely fitness.

The calling-in letter to the applicant Iquest referred to the need to be satisfied as to the good repute and professional competence of the company and its designated Transport Manager.

The calling in letter to Mr Stubbs referred to issues for him as transport manger as good repute and professional competence.

3. The hearing

The public inquiry was listed before me at Golborne on 1 September 2020. Carol Higham appeared on behalf of both companies and her fellow director. Mr Stubbs was also present. All parties were legally represented by Mr Andrew Woolfall of Backhouse Jones solicitors.

Prior to the hearing, I was served with bank statements for the operators covering the most recent 3-month period. These demonstrated financial standing well in excess of the required level for both LPH and Iquest.

I was also provided with the maintenance contract and inspection reports for the single vehicle currently operated by LPH together with a sample of driver defect reports and tachograph records. Theses did not reveal any issues with the maintenance of the vehicle itself or compliance with drivers’ hours by the driver.

The application for the Iquest licence was completed and signed by Louise Saddik. Whilst I would have preferred to have heard evidence from her directly, I have no reason to believe her account would have varied from that given by Carol Higham. I am content that Ms Higham was able to speak on behalf of all the directors and that Ms Saddik’s attendance is unlikely to have made any material difference to the hearing or the outcome.

3.1 Evidence of Carol Higham

Ms Higham gave evidence explaining the companies’ structure and the nature of their business. Ms Higham and Mrs Saddik are sisters and Mr Stubbs is their uncle. Both companies have been trading for some years as holders of parcel delivery franchises for DPD. The companies mainly rely on a fleet of smaller commercial vehicles either owned by them or supplied by owner-drivers.

LPH is based in Blackburn and employs around 30 individuals with around 25 vans. The Blackburn depot is overseen by Carol Higham with support from depot manager David Jones.

Iquest is based in Eccles and employs around 50 individuals with around 30 vans. The Eccles depot is overseen by Louise Saddik with support from depot manager Tony Austin.

The companies deliver parcels to a range of addresses in their local area including private homes. However, the large goods vehicle on the LPH licence is only used to deliver goods to commercial premises. The same limitation will also apply to the use of the LGVs proposed by Iquest,

In 2018 it was decided to apply for an operator’s licence for LPH due to customer demand for services requiring a larger vehicle.

Carol Higham gave evidence that she completed the GV79 application form at the time. She confirmed that she was aware of Mr Stubbs’ previous convictions but decided not to disclose this on the application form as she did not consider it was transport related. Ms Higham confirmed she had not sought further guidance or advice on the point. She had not consulted the GV79g guidance notes which accompany the guidance documents.

Ms Higham characterised this omission as an oversight. She denied that she had consciously decided not to disclose the convictions. Ms Higham accepted that with hindsight she ought to have disclosed the convictions and/or considered designating an alternative transport manager. Ms Higham gave evidence that she believed Mrs Saddik had approached the completion of the Iquest application in the same way and had also decided that the convictions were not relevant for disclosure.

Ms Higham confirmed that DPD generally required drivers employed on its behalf to undergo Disclosure Barring Service (“DBS”) checks. She had not undertaken such checks for Mr Stubbs as he was a family member.

I asked Ms Higham if she would have employed Mr Stubbs had he been a stranger and had disclosed his convictions. Ms Higham said she would probably not have employed him in such circumstances. However she went on to clarify that she was reassured about Mr Stubbs as he had lived with her mother after his release from prison [REDACTED]. She understood that the Probation Service was content with that arrangement. Ms Higham also explained that Iquest had inherited some staff who had previous convictions and they had been retained. The revelation of a conviction in a DBS check did not necessarily mean the companies would not employ an individual.

Ms Higham explained that management of the LPH licence was primarily the responsibility of the depot manager David Jones and Mr Stubbs (who reported to Mr Jones). Ms Higham said she had regular discussions with them about the management of the goods vehicle and licence. Ms Higham said she undertook spot checks of the documentation and occasionally checked the vehicle itself. She conceded this was not done by her on a weekly basis.

Ms Higham said she was unaware that the vehicle had not been registered on the licence or that the name of the maintenance provider had not been updated on the Vehicle Operator’s Licence system (VOL). She accepted she was the person who originally entered the name of the maintenance provider during the application and she sought to accept responsibility for not ensuing it was changed after the operator reached agreement on a new service contract. Mr Jones and Mr Stubbs were the persons with access to VOL for LPH.

Ms Higham confirmed that neither she nor Mrs Saddik had any previous experience of goods vehicle operator licensing.

3.2 Evidence of Jeffrey Stubbs

Mr Stubbs explained he had many years’ experience as a HGV driver. Prior to his involvement with LPH he had not been involved in the management of a transport operation.

[REDACTED].

Mr Stubbs described the offences in his own words as involving an “abuse of trust”. The offences did not come to light immediately and Mr Stubbs returned to the UK. The offences were reported some 6 to 7 years later. Mr Stubbs was prosecuted before a court martial (as a civilian) in 2014 and pleaded guilty to the charges.

On 28 April 2014 Mr Stubbs was sentenced on one offence to 36 months’ imprisonment and to 20 months on each of the two other offences. I accept that those sentences were to run concurrently for a total of 36 months. The rehabilitation period for these convictions is 7 years expiring on 28 April 2024.

Mr Stubbs explained that he was released from prison after 18 months in November 2015. He was supervised by the Probation Service for 12 months but has not had any further involvement with the police or authorities since then. [REDACTED].

Mr Stubbs was employed by his nieces at LPH initially as a van driver and he then moved on to operational manager duties. He no longer undertakes driving work. In 2017 it was decided that Mr Stubbs should obtain a transport manager qualification in advance of LPH’s application for an operator’s licence. Mr Stubbs obtained his Certificate of Professional Competence in October 2017. I was told he would be willing to attend a refresher course if required.

Mr Stubbs said he had assumed that there was no need to disclose his convictions on applying to be TM for LPH as the matters were not transport related. He accepted that he had not cross referred to the guidance notes for completion of the application and had not sought any other advice or guidance. Mr Stubbs confirmed he was well aware of the gravity of his convictions and had to consider their disclosure in other situations.

When it came to completing the TM application for Iquest, Mr Stubbs further assumed there was no need to disclose his convictions as this had not been questioned when he made his previous application for LPH.

Mr Stubbs accepted he had omitted to record the registration number of the vehicle used by LPH and the mileage on any of the driver defect reports which he had countersigned. He explained that the registration number was on the cover of the book used but he had overlooked the need to provide a copy of that in evidence.

Mr Stubbs was unaware that the vehicle in LPH’s possession had not been recorded on the licence. He was unaware of the requirement to do that within 28 days and appeared to be confused about the use of the online Vehicle Operator Licensing system.

When it was put to him that the maintenance provider nominated on VOL differed from the provider who was evidently servicing and inspecting the company’s vehicle, Mr Stubbs again said he was unaware of that omission. Ms Higham confirmed that the nominated provider Wards of Burnley had not been used since the licence was issued and the actual work had always been undertaken by Ciceleys. She was also unaware that VOL had not been updated.

4. The law and submissions

As Mr Stubbs has 3 convictions each which resulted in a prison sentence in excess of 3 months, the provisions of paragraph 2 of Schedule 3 of the Act apply namely that a traffic commissioner shall determine that an individual is not of good repute if that individual has more than one conviction of a serious offence.

In submissions, I was also reminded of the provisions in Schedule 3 paragraph 5(2)(b) that a traffic commissioner “may also disregard an offence if such time as he thinks appropriate has elapsed since the date of the conviction.”

Mr Woolfall also referred me to the Upper Tribunal’s decision in Martin Joseph Formby t/a G & G Transport T2012/034. It was submitted that the view of the Upper Tribunal (following Article 6.3 of EC Regulation 1071/2009) was that the effect of paragraph 5(2)(b) is that a conviction can be disregarded earlier that the statutory date of rehabilitation if sufficient other rehabilitative measures have been taken.

I accept that statement of general principle by the Upper Tribunal but would also note that the decision made it clear that the rehabilitation of the individual was not the only relevant consideration. The Upper Tribunal’s decision in Formby contains a reminder that operator licencing is based on Traffic Commissioners (as well as the public and other operators) being able to trust those to whom they grant operator’s licences to operate in compliance with the regulatory regime.

The conclusion of the Upper Tribunal in Formby on the particular facts of that case was that, “the reasonable opinion of right-thinking people, whether members of the public or law-abiding participants in the industry, would be that it is still too soon to grant the Appellant an operator’s licence.”

I was invited to consider granting a period of grace for LPH to appoint a replacement Transport Manger should I find that the repute of Mr Stubbs was lost. I was also invited to grant the application for Iquest on the basis that it was a wholly owned subsidiary of LPH and could start operating on that basis pending the appointment of a new Transport Manager.

5. Consideration

5.1 Jeffrey James Stubbs, Transport Manager

I did not have any independent evidence in relation to Mr Stubbs convictions beyond the fact of those convictions and the sentence passed. Mr Stubbs did not seek to challenge those details.

As Mr Stubbs conceded the convictions involved an abuse of trust. I find they involved a serious abuse of authority and breach of trust. Mr Stubbs had been employed as [REDACTED], a position which involved considerable responsibility for [REDACTED].

Even though the convictions do not relate to transport matters, I do consider the circumstances are relevant to the question of whether I can trust Mr Stubbs to operate compliantly as a Transport Manager. The convictions relate to offences committed whilst Mr Stubbs held a management position which he was expected to undertake to a high standard by adhering to the law and principles of professional conduct and ethics. I draw a clear parallel with the expectations of transport managers in operator licencing.

The convictions demonstrate that Mr Stubbs clearly fell well short of that expectation and I find they are highly relevant to assessing his fitness to act as a transport manager.

The convictions date back to 2014 (although I accept the conduct itself dates back further to 2006/2007). Mr Stubbs has completed the custodial and licence element of the sentence which I treat as a positive factor. However, he remains subject [REDACTED]. There remains 4 years until the convictions can be treated as spent for the purposes of the Rehabilitation of Offenders Act 1974 (and I also note that remaining period would have been 6 years if convictions had been disclosed as required when the LPH licence was considered in 2018).

I have balanced these factors and conclude that the seriousness and nature of the convictions (including their relevance to the TM role) are such that it is far too soon to disregard them. I do not consider that appropriate time has elapsed for convictions to be disregarded under the provisions of paragraph 5(2)(b).

As a result I must apply the provisions of paragraph 2 of Schedule 3 and determine that Mr Stubbs is not of good repute as a transport manager.

I will add that there are additional grounds on which I make adverse findings as to Mr Stubbs’ repute.

First, there is the failure to disclose the convictions on either the application for appointment as Transport Manager for LPH or the more recent application by Iquest.

I give Mr Stubbs the benefit of the doubt that he did not act deliberately to mislead the Traffic Commissioner. However, he ought to have been fully aware of the need to disclose the convictions on the applications. Mr Stubbs was very conscious of the seriousness of the convictions and the continuing restrictions that resulted for his everyday life. It was very reckless of him to complete the application form without even consulting the readily available guidance notes to confirm if the convictions required disclosure or not.

Second, there are the issues with Mr Stubbs’ conduct of his role as transport manager for LPH. The failure to ensure a vehicle had been recorded on the licence since its grant in 2018 relates to one of the most basic functions of managing an operator’s licence. It is equally unacceptable that Mr Stubbs failed to notice that the maintenance provider details had not been updated.

These matters were underpinned by the impression I took from Mr Stubbs’ evidence that he had little understanding of the requirements of operator licensing and appeared to be ill-equipped to develop that understating further. This was also consistent with his failure to carefully consider and seek guidance on the information he included in his transport manager applications. I find it very concerning that within 3 years of a CPC qualification, it is already considered beneficial for Mr Stubbs to attend a refresher course.

In the light of all these findings, I consider a period of disqualification is appropriate.

I have considered if the disqualification should be until such time as the convictions are spent in 2024. However I have concluded that would be disproportionate and that Mr Stubbs should be able to ask to be treated as rehabilitated sooner.

I confirm my finding that Mr Stubbs has lost his good repute. I disqualify him as a transport manager until 28 April 2022 (when there will be 2 years remaining until the offences). The effect of this order is that Mr Stubbs will have the opportunity to apply to act as a transport manager after that date; it does not mean his good repute will automatically be restored on that date.

5.2 LPH Operator’s Licence

This is an existing licence which was issued in August 2018. I take as a positive the absence of any adverse regulatory history in the intervening two years. I am also satisfied the operator’s single vehicle is being well maintained and that there is compliance with drivers’ hours regulations (albeit there are the aforementioned concerns about some aspects of recording information on the licence).

I am also satisfied that if Mr Stubbs’ convictions had been disclosed as required on the making of the application for a licence by LPH in 2018, the application would have been called in for a public inquiry. However, I consider it is likely that the licence would have been granted if an alternative transport manager had been nominated at that time.

I do not find that Ms Higham deliberately sought to mislead by omitting to disclose Mr Stubbs’ convictions in the LPH application. However, she was well aware of those convictions and ought to have taken far greater steps to confirm whether or not the convictions were required to be disclosed.

It was clear from Ms Higham’s evidence that she had approached Mr Stubbs’ employment in manner different to general employees due to their family relationship and her personal knowledge of him. This was evidenced by the fact he was not asked to compete a DBS check as would have been expected of other recruits to the business.

I am concerned this familial connection led to a lack of objectivity on the part of Ms Higham and her fellow directors and that insufficient oversight was given to Mr Stubbs’ role as transport manager.

This is reflected in the errors made in relation to the management of vehicle details and maintenance providers on VOL. Whilst Ms Higham claimed she did undertake some supervisory role in relation to the licence, my impression was that it was largely left to Mr Stubbs as Transport Manager supported by the depot manager.

I find it is also telling that neither LPH nor Iquest attended the public inquiry with a firm proposal for an alternative designation as Transport Manager. Although it is clear that some thought has been given to possible named candidates, it also seems the director were clinging to the hope that Mr Stubbs would not be prevented from acting as their transport manager.

The failure to disclose Mr Stubbs convictions is a very serious matter but in considering what action to take I have considered what trust I can have that the operator will be compliant in future (applying the Priority Freight question).

I was reassured by Ms Higham’s evidence that she fully understood the seriousness of the position. It is clear that Ms Higham and her fellow directors run a successful business with the single goods vehicle forming only one small part. I have confidence that Ms Higham (and her fellow directors) have the capability to fully understand the requirements of operator’s licensing and that the lessons of the appearance at public inquiry will be heeded.

I am further reassured by the indication that Ms Higham and Ms Saddik will be willing to undertake to attend an operator licence awareness training course.

The possibility of an audit of the company’s systems was also offered. My concerns about maintenance and driver’s hours are not such that I feel it necessary to require an audit report and I am content for the directors to reach their own decision about the benefits.

I have balanced the failure to disclose Mr Stubbs’ convictions with the matters outlined above. I am also conscious that my decision means that Mr Stubbs has been removed as transport manager which was the issue of greatest concern.

I therefore find the repute of the operator is tarnished but not lost. I record a formal warning on the licence and accept the undertaking offered for the directors’ attendance at an awareness course.

I formally find that as at the date of this decision, the operator lacks the required professional competence as a result of Mr Stubbs’ disqualification.

As requested by the operator, I grant a period of grace for the appointment of a qualified transport manager to 31 December 2020 initially. Any request for this period to be extended should be supported by evidence of the reasons for such a request.

I confirm the undertaking, as agreed by the operator, is as follows:

By 30 November 2020 Carol Higham and Louise Saddik will attend an operator licence awareness training course run by a trade association (Logistics UK or RHA) or by another accredited training provider. Attendance may be in person or by participating in a virtual online course run by a training provider whose virtual course satisfies the criteria for such courses established by the traffic commissioners. A copy of the certificate of attendance will be forwarded to the Office of the Traffic Commissioner before 15 December 2020.

5.3 Iquest Licence Application

The consequence of the decision I have made in relation to Mr Stubbs is that the application for a standard operator’s licence made by Iquest does not meet the requirements of the Act in that the company has not nominated a transport manager who meets the requirements to be of good repute and not prohibited from being so designated.

I therefore refuse the application for an operator’ licence by Iquest.

It is disappointing that the applicant had not prepared an alternative nomination for transport manager in advance of the hearing. Had I been presented with a suitably qualified alternative candidate, I may well have been able to grant the application.

The applicant was on notice that a determination on their application would be made at the public inquiry and ought to have been aware of the need to meet all the requirements. As such, I am not prepared to delay that determination or consider contrived solutions such as allowing the grant under the auspices of the LPH licence.

I can however indicate that if a new application is submitted promptly by Iquest with the nomination of a suitably qualified transport manager (and nothing else has materially changed in the applicant’s circumstances since the public inquiry) I am content for an interim licence to be granted without further referral to me. Similarly if the directors chose to address the situation by seeking to vary the LPH licence to allow operations at Eccles, I would be content for an interim variation to be granted without referral to me provided all statutory requirements were met.

Gerallt Evans

Traffic Commissioner

for the North West of England

3 September 2020