Workers Compensation and Third Party Insurance Fraud in the Taxi

10h. Workers Compensation and Third Party Insurance Fraud in the Taxi industry.

In December 1994 a letter was written to the DOT drawing attention tothe non-compliance of certain owners & operators with their legalresponsibilities in regards to workers compensation and compulsorythird party insurance. It was pointed out that non-compliance herewas leaving non-owner drivers unfairly exposed to legal claims andcourt actions that were rightfully only the responsibility of theowner/operators [R1]. An acknowledgment was received from JohnMcLaughlin indicating the matter would be investigated.[R2]

Overlapping correspondence was also exchanged suggesting that simplerecourse to a requirement for owner/operators to have displayed intheir taxi vehicle an authority ID card with full details of ownerinsurance cover, etc would greatly assist with problems related totraffic incidents, accidents and insurance matters.[R3-4] The DOTresponse, while sympathetic, was a fob-off; it indicated that thematter was on hold (within the DOT) until it had been "raised at aTaxi Council meeting". [R4] The "Taxi Council" discussed thisproposal and replied to the DOT that they did not feel an authorityID card for owners (containing insurance details) was warranted. TheDOT in response did nothing. Meanwhile bailee drivers continued to bepersecuted by courts, police, other authorities, but especially bynegligent owners who wished to continue the practice of avoidinglegal responsibilities for third party insurance and workerscompensation.

The resistance of the "Taxi Council" and the DOT to implementing asystem whereby non-owner drivers could readily check the identity andlegal coverage governing the vehicles they were driving raised otherimportant issues of public policy. An example here can be gleanedfrom correspondence sent to the Minister for Industrial RelationsJeff Shaw on 18th November 1997[J1-2]. This letter documented someseven to eight breaches of the regulations under the PTA and awardconditions of employment under the IRA. The Minister passed theletter on to his Director General [of the DIR] Warwick McDonald tohandle. [J-3].

The McDonald reply on 10th December 1997 [J3] revealed in fullthe "Catch 22" dilemma facing taxi drivers who wish to complainagainst shonky operators. McDonald's letter stated " … Where bailorsinsist on breaching these laws the DIR will enforce the legislation.However the DIR cannot investigate alleged breaches until a complaintform has been lodged at its offices.... It is essential.. .you areable to clearly establish the identity of the bailor. Without suchinformation the DIR can take no action."[J3]. However, in theoriginal letter of complaint[J1-2], the driver had supplied allavailable personal details such as mobile phone number, home phonenumber and work address of the operator. It was clearly stated thatthe owner had refused to identify himself in full. An industry wideauthority ID card for owners/operators would have avoided thisdilemma and removed the DIR's escape clause for its own inaction inthis case.

But the matter didn't end there. A letter of complaint about the sameincident had also been forwarded to John Bryson, the head officer ofthe Compliance Division of the DOT. [AF-1] This led to somebuckpassing. The reply came not from the Department, but from theMinister's Office on the 21st January 1998. On behalf of the MinisterCarl Scully, the Parliamentary Secretary for the Minister ofTransport, Kevin Moss M.P., stated, inter alia, the Taxi ComplianceTask Force has identified the operator in question" and willbe "undertaking a full audit of the taxi operations to determine ifthe Taxi-Cab Service Operator Accreditation Standards are beingcomplied with." [A F -3].

Based on this Ministerial reassurance that this shonky operator hadbeen clearly identified, and that action was finally proceedingagainst him by the Compliance Division of the DOT, a subsequentletter was then forwarded to John McLoughlin the Executive Directorof the DOT on the 5th of February 1998. [AI-1]. This letter, aftermaking reference back to the original one sent to the ComplianceDivision of the DOT the previous November, reiterated the knowndetails on the operator, and, requested the full name and particularsso that they could be forwarded to the DIR for possible prosecutionby that Department for breaches of the Industrial Relations Act aswell.

Yet despite the Minister's earlier assurances to the complainant [AF-3], the Regional Manager of the DOT ,Brian Scarfe, (on behalf of theExec. Dir. /DOT John McLoughlin), offered the startlingresponse, "....Based on the information you have supplied theDepartment is unable to identify (the taxi operator in question) asyou have not provided sufficient information." [AI-2]. The obviousquestion here is whether it is the Minister or the Department runningthe show. Clearly someone has a vested interest in not enforcing thelaws and regulations governing the NSW taxi industry properly.

Thus it came as no surprise that the complainant was separatelymaintaining a paper war with the DOT over the failure of the Dept. toimplement the simple reform of owner/Operator accreditation IDslisting full names, DOT authorisation, address and insurance detailsas a means of curtailing "lawlessness, tax evasion, money launderingand violations of the DOT and DIR regulations". [AE-1]. The responsefrom the DOT was predictable. The matter "is receiving attention"and "we'll be in touch" [AE-2].

Source: Sydney Taxi Corruption