Understanding safety ratings – Truck News

Many shippers will only do business with a carrier that has a Satisfactory safety rating. If a carrier maintains an overall violation rate of no more than 70% and does not fail a facility audit, there should be no problem maintaining a Satisfactory safety rating, right? 

A carrier that has put into place safety and compliance systems to minimize collisions, convictions, and out-of-service inspections should be able to keep its overall violation rate below 70%, and if its record-keeping practices with respect to safety, hours-of-service, and vehicle maintenance are up-to-date and in compliance, they should pass a facility audit. 

In other words, the overall violation rate and passing a facility audit are within a carrier’s control, and a safe and compliant carrier should have no trouble maintaining a Satisfactory safety rating.

Unfortunately, it is not as simple as that.

In Ontario, the Highway Traffic Act (HTA) provides that when assigning a safety rating to a carrier, the Registrar of Motor Vehicles (Registrar) shall have regard to the carrier’s safety record. 

This term is defined under the HTA to include any sanctions, warning letters, interviews, convictions, collisions, inspections, and the results of a facility audit. In addition, the Registrar may also consider the safety record of a person who is related to the carrier, when assigning a safety rating. 

Under the HTA “related” is broadly defined. It includes a carrier and person who are related individuals, a carrier and person who is (or was) a partner of the other, or have or have had partners in common, a carrier and person who directly or indirectly controls or controlled or manages or managed the other, or a carrier and the person have or have had common officers or directors, or they are or have been controlled, directly or indirectly by the same shareholders.

The Registrar’s ability to consider the safety record of a related carrier makes sense in the context of the HTA’s overall “anti-avoidance regime” which addresses the situation where a carrier tries to escape its poor safety record by setting up a new entity and starting fresh. 

But the very broad definition may capture a carrier that is related not because of an anti-avoidance tactic, but due to historic factors.

Responding to safety ratings

It is therefore important that a carrier responds to any proposed downgrade to its safety rating, which it has the right to do by way of written submissions delivered to the Registrar within 30 days of notice of the proposed change. 

There is no right to an oral hearing. Once the Registrar assigns the safety rating the decision is final –there is no right of appeal. 

If the downgrade to Conditional is due to the “related” carrier failing a facility audit, the Conditional rating remains in place for at least six months and until that related carrier passes a facility audit. The only avenue open to a carrier that has been downgraded to a Conditional safety rating is through a court proceeding called an Application for Judicial Review, brought before the Divisional Court. 

The Divisional Court reviews the Registrar’s decision on the standard of reasonableness – based on the information before the Registrar, including the carrier’s submissions — was the decision reasonable?  The Divisional Court does not consider the assignment of the safety rating anew.  

Application for Judicial Review

The Registrar’s written decisions to assign a Conditional safety rating are not a matter of public record.  The significant cost of an Application for Judicial Review and the very high hurdle to overcome to be successful in these hearings means that carriers are unlikely to seek judicial review, with the result that there is no jurisprudence to guide a carrier on how best to respond to a proposed downgrade to their safety rating.

The National Safety Code Standard 14 defines a safety rating as an evaluation of a carrier’s safety performance and so a strong safety record is key, but a carrier needs to also be mindful of who it engages in management, or who it partners with, as that may lead to unintended consequences.