Bounce Back Loans and The Traffic Commissioner
In several recent Public Inquiries in which we have been involved Traffic Commissioners have shown an unhealthy interest in “Bounce Back” loans taken out by operators at the beginning of the Covid 19 pandemic. These loans were taken out under rules requiring that the maximum amount loaned must be equal to or less than 25% of the turnover of the business, in 2019-20 and in any event no more than £50k (requiring a turnover of £200k). As one of the main items requested in the call-in letter for a Public Inquiry is bank statements to prove financial standing, the Traffic Commissioners pay attention when a smaller truck operation has had a £50k loan, with bank accounts demonstrating a turnover considerably shy of £200k.
One of the problems of the scheme was that few people had their 2019-20 accounts ready in May 2020 to show the turnover of their businesses and, such was the hurry to get the loans out to those who needed them, the banks accepted the business’ estimate of what their turnover would be for 2019-20. This led to some very optimistic estimates, or to the misunderstanding that the estimate was for future turnover.
Plainly, a loan obtained by fraudulent representations goes straight to the heart of an operator’s good repute and creates difficulties at Public Inquiry – here the Licence is readily at risk. It is usually the case that instructions received would amount to a complete defence in a criminal trial, centred around lack of dishonesty. Whether that defence would be believed either by the Traffic Commissioner or the prosecuting authorities is a different question. As P G Wodehouse observed of policemen, there is something in the job that “…warps a man’s mind and ruins that sunny faith in his fellow human beings which is the foundation of a lovable character.”
The dichotomy for the advocate is how to advise a client. It is highly probable that a Traffic Commissioner, when presented with admissions of an untrue estimate of the turnover of a business, would feel themselves obliged to report the matter. If the operator fails to answer questions at the Public Inquiry, then this may lead the Traffic Commissioner to conclude that the operator is not complying with the Inquiry and thus is not cooperating with his Regulator. If he does answer questions, and is not believed, then he is likely to get his collar felt.
A Traffic Commissioner investigating a Bounce Back loan would have to be careful; the only reason for the questions about a loan is that “there are grounds to suspect an offence may have been committed.” So the advocate must decide on the best approach: should the operator be cautioned before answering the TC’s questions (and perhaps then not answer)? He certainly would be if it were the police who were asking the questions.
Even were the operator to be cautioned at the PI and then answered the questions put by the TC, the next question on the TC’s mind would likely be that of the reliability of the answers given, especially with an unrepresented operator. Witnesses at a Public Inquiry are enjoined to tell the truth, with the implied consequence that things will go badly for their livelihood if they do not. The threatened loss of a business, with the consequent loss of livelihood and years of work might well lead to the operator telling the Traffic Commissioner what the witness thinks that he wants to hear, rather than what actually happened. This might occasion an interesting argument, in subsequent criminal proceedings, under sections 76 and 78 of the Police and Criminal Evidence Act 1984 on the reliability of the answers given at the Public Inquiry, and subsequent police interviews based upon those answers.
Smith Bowyer Clarke deals with cases before the Traffic Commissioner and in the Criminal Courts. If you have concerns about a Bounce Back Loan that you have taken out, then speak to one of our lawyers.