Applying for an Operator’s Licence (O Licence) is more than just completing a form—it's a demonstration of trustworthiness. The Traffic Commissioner (TC) will only grant a licence if satisfied that the applicant can be relied upon to comply with the responsibilities that come with it. That trust starts with the application.

The Application Form – A Critical First Impression

For new applicants, the first and most important step is completing the application form correctly. Done properly, a licence can often be granted within the target timeframe of six weeks or less. Done incorrectly, and the process can stall or even result in a proposed refusal and a call to attend a public inquiry (PI).

One of our clients experienced exactly that.

The Issue: An Honest Mistake with Serious Consequences

Our client had submitted an application which, on its face, appeared to be incomplete. Specifically, it failed to declare a historic association with a previous O Licence application. While the omission was a genuine mistake, it raised a red flag for the TC.

The Office of the Traffic Commissioner (OTC) treated the matter seriously. The failure to declare past associations can suggest negligence—or worse—and it called into question the applicant’s reliability.

Our Approach: Full Disclosure and Positive Evidence

We assisted our client in preparing a comprehensive written submission to the TC's office in advance of the hearing. This included:

• A clear explanation of how the error occurred.
  
  
• Evidence showing that there was no intent to mislead.
  
  
• Detailed information about the client’s proposed compliance systems.
  
  
• Supporting documentation showing that the error had brought no advantage—only the disadvantage of triggering a PI.
  
  

The Outcome: Licence Granted with Conditions

At the public inquiry, the client gave open and honest answers about the error and demonstrated an up-to-date understanding of the maintenance and compliance obligations expected of O Licence holders.

The TC was ultimately satisfied that the application had been made in good faith. The licence was granted, with a condition that the operator complete an independent systems audit within six months and submit the findings to the OTC.

Key Takeaway: Accuracy is Essential

This case serves as a clear reminder of the importance of getting the application right first time. Even minor errors can result in delays, additional scrutiny, and the stress and cost of a public inquiry.

If you're applying for an O Licence, it pays to seek professional guidance from the start. Our team can help you navigate the process, ensure your paperwork is accurate and complete, and give you the best chance of a smooth application.

Being called to a Public Inquiry is a serious matter for any operator. But facing two inquiries within a year can put an operator’s very survival at risk. In this case, our client—a licensed operator—found themselves before the Traffic Commissioner for the second time in under twelve months. The issue? Failure to follow through on a straightforward undertaking given at the first hearing.

The First Public Inquiry

The operator initially faced a Public Inquiry due to several maintenance failings, along with wider compliance concerns. On paper, the case looked serious. However, the company was committed to improvement and had started taking corrective action even before the hearing date was set.

We were instructed in good time and provided detailed advice not just on the maintenance issues raised, but also on other areas of compliance that had not been fully appreciated by the operator. The company took on board our recommendations and made a robust response to the DVSA’s findings. At the inquiry, the Traffic Commissioner acknowledged the positive steps taken, and the outcome was a formal warning—no more.

The Missed Undertaking

One of the undertakings given at the first hearing was for the operator to arrange an independent systems audit within six months. This was a clear and reasonable requirement. Unfortunately, the audit was not carried out within the required timeframe, and no communication was made with the Traffic Commissioner’s office.

When the TC’s office followed up, the operator explained that the failure had been an honest oversight. An audit was booked immediately, but by then it was too late to avoid the consequences. A second Public Inquiry was called—this time with the O Licence at serious risk.

The Second Hearing

We were instructed once again. The operator accepted our further advice and offered several new undertakings to address the situation. As before, the company’s director and transport manager presented well at the hearing.

In our legal submissions, we emphasised that this was a compliant and responsible operator that had learned from past mistakes and was not a threat to road safety or fair competition. We acknowledged the seriousness of the repeat appearance but highlighted the progress made and the company’s genuine efforts to get things right.

The Outcome

Despite being unimpressed by the need for a second hearing, the Traffic Commissioner accepted that the business had taken appropriate action and showed genuine intent to comply. While revocation was considered, the TC decided—just—to stop short of it.

The result was a short, two-week curtailment of vehicle authority. Given the circumstances, this was a remarkable outcome.

Our client recognised how close they had come to losing their licence altogether and expressed their sincere thanks for our guidance and representation throughout both proceedings.

When selling a business, whether through an asset sale or share sale, it is important to identify any personal guarantees or indemnities you may have signed and to understand the risks of ongoing liabilities under supplier contracts and other agreements. Without taking the proper steps, you could remain personally or financially exposed even after the sale is completed.

This guide explains the key risks and the actions you should take to protect yourself.

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1. Personal Guarantees and Indemnities: What Are They?

A personal guarantee is a legally binding commitment where you, as an individual, agree to be personally responsible for a company’s debt or obligations or in relation to your business.

An indemnity is a contractual promise to cover losses or damages incurred by another party, often used in situations involving financial obligations, supplier contracts, or leases.

You may have signed personal guarantees or indemnities during your time as a business owner or director for purposes such as:

• Bank loans, overdrafts, or credit facilities
• Commercial property leases
• Supplier contracts or trade credit arrangements
• Equipment finance agreements or hire-purchase contracts
• Utility contracts and service agreements

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2. Why Are Personal Guarantees and Indemnities a Risk When Selling a Business?

Ongoing Liability After the Sale

Personal guarantees and indemnities do not automatically end when you sell the business or your shares in the company. This means that, unless you obtain a formal release, you could still be held personally liable for the company’s debts or obligations if the buyer or new owner defaults on payments.

Example Scenario:

You provided a personal guarantee for the company’s £20,000 bank loan. After selling the business, the buyer defaults on the loan. Because you signed the personal guarantee, the bank could pursue you personally for repayment, even though you no longer own the business.

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3. Risks Associated with Asset Sales and Supplier Contracts

In an asset sale, you are selling specific business assets (e.g., equipment, contracts, intellectual property, goodwill) but the original company remains in existence. Unlike a share sale, where the company itself is sold, this structure can create risks related to supplier and service contracts.

Ongoing Liability Under Supplier Contracts

Unless supplier contracts are terminated, assigned, or novated to the buyer, the original company—and by extension, you—may remain liable for ongoing obligations under these agreements. This could expose you to:

• Claims for unpaid invoices or debts
• Penalties for breaches of contract after the sale
• Liability for product or service issues under pre-existing warranties

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4. Practical Advice to Manage These Risks

To protect yourself from ongoing liabilities under personal guarantees, indemnities, and contracts, we advise the following steps:



Step 1: Identify All Guarantees and Indemnities

• Review company records to identify any guarantees or indemnities you may have signed personally.
• Consider common areas such as bank loans, credit lines, supplier contracts, and property leases.
• If you are unsure whether a personal guarantee or indemnity exists, we advise you to make written enquiries to banks, suppliers, and landlords.

Step 2: Secure a Release from Personal Guarantees

• Contact the relevant lender, supplier, or landlord to request a formal release from the personal guarantee or indemnity.
• If a release is not possible, consider negotiating indemnities or guarantees from the buyer as part of the sale agreement to cover your risk.
• Ensure that any release or indemnity is properly documented in writing.

Step 3: Address Ongoing Supplier and Service Contracts

If you are selling the business through an asset sale, take the following steps to address contracts:

• Terminate contracts: If the buyer does not want to continue a particular contract, you should negotiate the termination of that contract with the supplier or service provider to avoid any ongoing liability.
• Assign or novate contracts: Where the buyer wishes to take over the contracts, you should arrange for either an assignment (where the buyer assumes the benefits of the contract but you may still remain liable for obligations) or a novation (where the buyer takes on full responsibility, and you are released from liability).
• Ensure that any assignment or novation is properly documented and signed by all relevant parties.

Step 4: Negotiate Indemnities from the Buyer

• Where it is not possible to secure a release or novation, consider negotiating a contractual indemnity from the buyer.
• This indemnity should state that the buyer will reimburse you for any claims or liabilities arising under personal guarantees, supplier contracts, or other obligations that remain in your name.

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5. Understanding the Risks If You Do Not Act

If you do not act on this advice, you could face serious financial consequences, including:

• Being personally liable for outstanding debts under personal guarantees.
• Ongoing liability for obligations under supplier or service contracts, even if the buyer defaults.
• Legal action from lenders, suppliers, or landlords seeking to enforce guarantees or indemnities.

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6. Checklist: Actions to Take Before Completion of the Sale

✅ Identify all personal guarantees and indemnities you have signed.

✅ Make written enquiries to banks, suppliers, landlords, and other organisations to confirm the existence of any guarantees.

✅ Seek formal releases from personal guarantees where possible.

✅ Negotiate assignment or novation of supplier contracts as part of the asset sale process.

✅ Secure indemnities from the buyer where releases or novations are not possible.

✅ Document all agreements related to releases, novations, or indemnities to protect yourself after the sale.

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Note : This guide is for general information purposes only and does not constitute legal advice. Please consult us for advice specific to your situation.

Recently, we were instructed well in advance—approximately five weeks before the hearing—to represent a client facing serious regulatory challenges. This lead time was crucial, allowing us to prepare a comprehensive case and avoid the pitfalls that often accompany last-minute instructions, including potential criticism from the TC for insufficient preparation. 

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We recently represented a commercial vehicle operator at a public inquiry before the Traffic Commissioner (TC). The operator faced a number of serious compliance concerns that had triggered regulatory scrutiny, including:

* Failure to present vehicles for MOT testing on time

* Breaches of drivers’ hours rules

* Inadequate vehicle maintenance procedures

* Operating more vehicles than the licence authorised

While the issue of exceeding the authorised number of vehicles was primarily a technical error rather than a deliberate or flagrant breach, the cumulative effect of the operator’s compliance history had understandably raised alarm bells with the Office of the Traffic Commissioner.

Fortunately, we were instructed approximately four weeks before the scheduled hearing — allowing enough time for meaningful intervention. From the outset, we emphasised to the operator that significant work would be needed to prepare properly for the hearing and to demonstrate that lessons had been learned.

The operator was cooperative and proactive in acting on our advice. Key improvements were implemented swiftly, including:

* The company director attending a full-day Operator Licence Awareness Training (OLAT) course

* The transport manager undertaking a two-day Transport Manager refresher course

* A full review and restructuring of the company’s compliance systems

* Investment in upgraded compliance software and hardware to better manage maintenance records and driver hours

In addition, the company adopted straightforward and cost-effective practices for tracking key compliance items, such as drivers’ hours monitoring and wheel removal/retorque checks. As part of our ongoing approach, we always aim to keep our clients’ compliance costs proportionate and manageable, particularly where they are willing to act quickly and follow our expert guidance.

We also explained a central principle of the operator licensing system: "trust". The TC’s decision-making framework is rooted in whether the operator can be trusted to operate compliantly going forward. In practice, this means two things:

1. Documentary evidence - submitted in advance of the hearing must be comprehensive, properly ordered, and clearly explained. We managed the submission of this evidence electronically, ensuring deadlines were met and the material was easy for the TC to follow.

2. Presentation at the hearing - is equally important. We prepared the director and transport manager by briefing them on what kind of issues would come up during the hearing.  We carefully planned what evidence and submissions to use during the hearing and how to set out the case efficiently.  

On the day of the hearing, which lasted approximately two hours, the operator was able to present a well prepared and transparent account of the steps taken to rectify past failings. The TC tested the evidence carefully through questioning but appeared satisfied with the company’s current level of compliance and the seriousness with which the issues had been addressed.

Ultimately, the Traffic Commissioner issued a formal warning rather than taking regulatory action against the licence. The warning made clear that any future non-compliance or further appearances before the TC would likely lead to much harsher consequences.

Our client was relieved and pleased with the outcome and expressed their appreciation for the support and direction we provided throughout the process. They confirmed that they would not hesitate to engage us again should the need arise.