The ‘Grey Fleet’ –are you neglecting a major risk?

 

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“Managing the Grey Fleet – mitigate the risk of private vehicles used for business” has been produced by Lex Autolease’s team of experienced consultants.

Although the Grey Fleet – a vehicle used for work purposes which is not owned or leased by the organisation itself – plays a crucial role for many UK businesses, there are a number of potential issues which could open them up to prosecution, civil litigation and reputational damage.

Lex Autolease has published a report which discusses these challenges in detail, whilst highlighting ways to address and reduce the Grey Fleet risk.

It is estimated that there are 14 million Grey Fleet vehicles in the UK today, compared to just one million company cars. These range from vehicles owned by employees under ‘cash for car’ schemes to individuals’ privately owned cars, with the private sector making up over 85% of the Grey Fleet according to the British Vehicle Rental and Leasing Association (BVRLA).

Despite being so prevalent, there is often a lack of knowledge surrounding the management of private individuals’ vehicles used for business purposes. In fact, many fleet decision-makers and drivers are unaware of the financial, safety and environmental risks associated with Grey Fleet use.

A lack of control  

“The Grey Fleet can pose a very real risk, with the potential for prosecution and civil litigation if it is not managed effectively.”

To begin with, many companies do not even know how large their Grey Fleet is.

In addition, although an organisation will effectively monitor the policies, insurance, MOT and routine servicing of its own fleet, these same controls often do not apply to Grey Fleet vehicles.

A recent survey by Lex Autolease revealed that 44% of organisations don’t always check a Grey Fleet vehicle’s MOT cover, for example. Added to this, 3% of surveyed employees admit to driving their car for work without a valid MOT in the last 12 months.

Somewhat worryingly, the survey also showed that a third of organisations believed they faced ‘no significant risk from employees who use their own vehicles for work’. The reality is far different. In fact, the Grey Fleet can pose a very real risk, with the potential for prosecution and civil litigation if it is not managed effectively.

Your Duty of Care responsibilities

Under current health and safety laws, employers owe the same duty of care to employees driving their own private vehicles as they do for employees who drive an organisation’s owned, leased or hired vehicles.

Failure to comply can expose a company to fines, and even corporate manslaughter charges, should an accident result in the death of the driver or a third party due to complicit negligence on behalf of the employer.

As such, employers must develop more robust strategies to manage employee-owned vehicles used for work-related journeys.

 

Having a designated person within the organisation overseeing the use of Grey Fleet vehicles can also be extremely beneficial. After all, the effective management of these vehicles – and the associated risks – must go beyond a box-ticking exercise.

“Although having a robust policy in place is the first step towards reducing Grey Fleet risks, getting buy-in from staff is also a vital part of the process.”

Regain control – creating a vehicle policy

A good starting point for those looking to better manage the various risks involved with their Grey Fleet is to create a risk management framework within which they - and their employees - can successfully operate.

One of the key components of this framework is a defined Grey Fleet policy. The idea, of course, is to help ensure all vehicles being used on behalf of the organisation are properly maintained and conform to road traffic legislation, and that drivers are legally entitled to use that vehicle for work purposes.

The policy should therefore set out parameters such as age limits on cars, mileage costs, required vehicle checks, and the consequences of non-compliance.

The policy should also describe whether employees will be expected to self-certify their cars as fit for business usage, or whether the organisation wants any Grey Fleet vehicle to be brought in for a physical check from a trained member of staff before it is first used for work purposes.

As well as physical inspections, documentation such as the driver’s licence, current insurance - which needs to cover business activities - and MOT and maintenance (such as last service record) documents should also be checked before the vehicle is first used for work purposes.

Basic checks such as these should help an organisation demonstrate that it is doing what it can to supervise its Grey Fleet. This is important because should a work-related road incident occur, the organisation will need to provide evidence that they have taken steps to ensure their controls are “reasonable and proportionate to the level of risk”.

Annual Grey Fleet checks and random checks are also a good idea to help ensure the vehicles remain in line with the company’s policy.

Compliance incentives – the need for a Drivers Handbook

Although having a robust policy in place is the first step towards reducing Grey Fleet risks, getting buy-in from staff is also a vital part of the process. One way to encourage employees to support vehicle checks and maintenance is to create a Drivers’ Handbook which clearly sets out the policy and contains the required vehicle checklist for those that are self-certifying.

In addition, in order to encourage employees to share documents and information to support vehicle checks, potential penalties could be incorporated within employee’s contracts. This could involve not making mileage payments to that driver until they have declared their vehicle as being up to minimum standards.

Having a designated person within the organisation overseeing the use of Grey Fleet vehicles can also be extremely beneficial. After all, the effective management of these vehicles – and the associated risks – must go beyond a box-ticking exercise.

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