Logistics: Bite-Size Insights - September 2024

In this edition of Logistics: Bite-Size Insights, we consider a Court of Appeal decision highlighting the importance of carrying out necessary checks to prevent clandestine entrants, the latest post-Brexit border requirements and the UK’s new legislative agenda.

A timely reminder of the implications of failing to carry out the necessary checks to prevent clandestine entrants

KLG Trucking SRL v Secretary of State for the Home Department [02.07.24]

In this case, the Court of Appeal found that a county court had made a mistake (in part) in finding that a vehicle owner, KLG, was liable to pay a penalty under the Immigration and Asylum Act 1999 s.32.

KLG collected a consignment from Italy to be delivered at the United Kingdom Control Zone in Calais. Upon arrival, eight clandestine entrants were found inside the vehicle. Penalty notices were issued to the driver and to KLG, and a fine of £4,500 per clandestine entrant was issued (resulting in a £36,000 fine).

KLG appealed the penalty notice against them. The county court upheld the penalty as it was satisfied that KLG had not complied with the Carriers’ Liability Regulations 2022 (Reg 2E(2)) as the checklist found in the possession of the driver showed that no checks of the vehicle had been carried out within the previous 24 hours. See our earlier articles on the requirements of the Carriers’ Liability Regulations 2022 – here and here.

KLG appealed to the Court of Appeal which held that KLG had not breached 2E(2) of the Regulations.

However, it went on to rule that the mere fact that a vehicle owner had complied with the Regulations did not provide a good reason for declining to impose any penalty. The penalty itself was reduced to £18,000, due to the discrepancies in the records of KLG and that of the driver.

This serves as a handy reminder for hauliers to check that all prevention measures are in in place. Hauliers should also consider their insurance terms as cover may be subject to certain security requirements being in place; for example, padlocks to be used on all vehicles. Failing which, hauliers could find themselves with a hefty fine or a claim from its customer with no insurance to assist.

The financial impact of Brexit rumbles on …

Since January 2024, EU food products have required an Export Health Certificate (EHC). Border inspections have been taking place from April 2024 and further ‘safety and security’ declarations on all goods will be required from October 2024. This is part of the previous government’s three phase implementation plan.

Small and medium-sized exporters of food to the EU now face monthly charges due to the implementation of the EHC requirements. It has been suggested by industry commentators that whilst an EHC is £117.50 per product type, charges could still run into tens of thousands of pounds. Smaller haulage operators are already struggling with their margins, and these added costs could force many businesses to come out of the industry completely or stop exports of such products.

Groups, including the British Chambers of Commerce, the Cold Chain Federation and the Horticultural Trades Association, urged the Government to either delay the introduction of the charges or do more to reduce the impact on small businesses. However, this plea fell on deaf ears.

It is equally challenging for food imports. The new border inspections that have been implemented has been estimated to add £1 billion a year in costs to the food industry. The end result – added costs for the consumer. In the midst of the cost of living crisis, these charges become prohibitive to an increasingly expensive supply chain.

With these ever increasing charges there is of course added pressures in maintaining commercial relationships and getting paid on time. For hauliers, this will inevitably lead to cashflow issues and considerations will need to be had for insurers if hauliers attract liability through an inability to pay invoices.

New UK Government’s legislative agenda

British Prime Minister Keir Starmer is currently exploring options with his European counterparts that will address irregular migration. This supports the new government’s stated priority in this area, as outlined in King Charles’ speech earlier this year, setting out the UK Government’s legislative agenda for the forthcoming parliamentary session.

One Bill presented was the Border Security, Asylum and Immigration Bill which proposes giving the new Border Security Command increased powers to investigate involvement in organised immigration crime, including stop and searches at the border.

While this Bill has not yet been formally introduced, it could result in a more robust border security system which will impact cross channel hauliers.