Britannia Bus Ltd

A Traffic Commissioner must follow the two-step process in Article 13.1 of Regulation (EC) No 1071/2009 when granting a period of grace for an operator to remedy a failure to satisfy financial-standing requirements. The first step requires the statutory notice under regulation 9 of the Public Service Vehicles (Operators' Licences) Regulations 1995. A period of grace cannot dispense with that notice, even where the operator has itself requested the period. Failure to follow the process is a material error of law where the omission may have affected the operator’s decision to request a public inquiry and the outcome of the revocation decision.

Britannia Bus Ltd held a standard public service vehicle operator’s licence. The Traffic Commissioner concluded that the company no longer satisfied the financial-standing requirement in section 14ZA(2)(c) of the Public Passenger Vehicles Act 1981, granted a period of grace under section 17(1A), refused an extension, and revoked the licence under section 17.

The company appealed under section 50(4)(c), arguing that the revocation breached section 17(4) because no public inquiry had been held and was disproportionate. The central issue was whether the Traffic Commissioner had lawfully granted the period of grace without first giving the statutory notice required by regulation 9.

1. Appeal allowed. The Traffic Commissioner’s revocation of the operator’s licence, notified on 22 May 2024, was set aside.
2. Under section 17(1), revocation is compulsory where the holder of a standard licence no longer satisfies the requirements in section 14ZA(2). Section 17(1A) permits the Traffic Commissioner, before revocation, to serve a notice setting a time limit in accordance with Article 13.1 of Regulation (EC) No 1071/2009. Section 17(4) prevents action under section 17(1) without a public inquiry where the licence holder requests one.
3. Article 13.1 requires a two-step process. First, the competent authority must notify the undertaking when it establishes that the undertaking runs the risk of no longer fulfilling the Article 3 requirements. Secondly, where a requirement is no longer satisfied, the authority may set a time limit for rectification. The first step is implemented here by the notice required by regulation 9 of the Public Service Vehicles (Operators' Licences) Regulations 1995.
4. Following Egertons Recovery Group Ltd [2022] UKUT 141 (AAC), the statutory notice could not be dispensed with merely because the operator had first requested a period of grace. The notice informs the operator of the grounds, allows representations, and provides the period in which to request a public inquiry. Once a period of grace has been granted, the opportunity to request an inquiry is in effect lost.
5. The Traffic Commissioner therefore erred in law by moving directly to the second step through the letter of 19 February 2024. The error was material because compliance with the correct procedure might have led the appellant to request an inquiry while that option remained open, and the inquiry might have produced a different outcome.
6. The revocation was set aside. No further order was necessary. The Traffic Commissioner remained able to take any lawful action concerning compliance, provided the required procedures were followed. The other grounds of appeal were unnecessary to determine.

• Upper Tribunal (Administrative Appeals Chamber): allowed the appeal and set aside the Traffic Commissioner’s revocation notified on 22 May 2024.
• Traffic Commissioner in the East of England Traffic Area: revoked the operator’s licence under section 17 of the Public Passenger Vehicles Act 1981 for failure to satisfy the financial-standing requirement.