Michael Sheldrick, Automotive Information Network

Negligent Entrustment. It's a phrase that haunts fleet managers. And well it should, according to Richard D. Alaniz, a senior partner with the Houston law firm of Alaniz and Schraeder. Alaniz told the recent AFLA conference that crashes cost employers almost $60 billion annually, and that on-the-job highway crashes cost employers more than $25,000 per crash, more than $128,000 per injury, and over $3.8 million per fatality.

Negligent entrustment claims, which often involve accidents with loss of life and serious bodily injuries, are becoming more common, say Alaniz. Even more worrisome, an emerging trend of punitive damages means that large verdicts can result. Companies must learn to protect themselves, says Alaniz. To those who say, "So what? I have insurance," he has a simple answer: "Punitives." The harsh reality is that negligent entrustment (NE) can, and often does, support a claim for punitive damages. Most insurance policies don't cover punitive damages, and even if they do, an NE claim involving serious injury or death can exceed policy limits.

Alaniz urges all fleet managers to protect themselves against NE by developing rigorous programs that will demonstrate that their company took pains to identify incompetent drivers and not put them behind the wheel. This is because NE cases are premised on the company's knowledge -- starkly put, whether it knew, or should have known that a driver was incompetent, and quite possibly was likely a risky driver.

The cornerstone of what might be called an NE Protection program, say Alaniz, would be corporate compliance with the Federal Motor Carrier Safety Regulations (FMCSR). While these regulations apply to interstate trucks above 10,000 lbs or carrying hazardous cargo, they are increasingly being used to measure the qualification of all so-called "professional drivers," regardless of the size of the vehicle.

There is a long list of FMCSR requirements, not all of which apply to every vehicle in a fleet or its drivers. But Alaniz suggests that employers maintain a qualification file, which includes all of the documents required in hiring and employing drivers. These include obtaining violation reports from any states where a driver is licensed, a list of previous accidents and violations, and a road test. He further suggests annual reviews to determine if a driver is still qualified.

But wait.There's more. Beyond the FMCSR requirements, Alaniz suggests that companies seriously consider implementing a standard developed by the American Society of Safety Engineers -- ANSI Z15.1.2006. It establishes best practices for all classes of employers and vehicles. It's not mandatory, he says, but adherence to it is strong evidence in any court action that the company was not negligent. ANSI Z15, as it's commonly called, establishes minimum standards of hiring, training, disciplinary procedures, safety programs, vehicle maintenance, and reporting procedures for accidents.

"Be Prudent Entrustor," Alaniz urged his audience. His prescription:

• Maintain an extensive and complete qualification file as part of a proactive safety program
• Evaluate and review all employees who drive company vehicles
• Review driving records once a year
• Get authorization to obtain moving violation reports (MVRs) and review them regularly
• Enforce consistent disciplinary standards and procedures

The Center for Professional Fleet Certification Elects Officers

The Center for Professional Fleet Certification ("The Center"), an alliance of fleet industry associations, entities, and universities formed to advance the fleet management profession by establishing standards of excellence, recently held its first meeting, discussed and went over its bylaws, and elected Officers and initial Directors.

The Center endorses and promotes the Certified Automotive Fleet Manager (CAFM) and Certified Automotive Fleet Specialist (CAFS) programs as the individual certification programs of choice in the fleet industry. Organizations join The Center by endorsing and supporting the programs endorsed by the alliance and have the ability to provide training services and reference products for those certification programs. Its ultimate goal is to lead the CAFM designation within the fleet management profession to the same level of recognition as the CPA designation has within the accounting field.

The Center elected the following Officers:

• President: Marvin Fletcher, CAFM, Director of Fleet Services, County of Hanover Fleet Services, Ashland, VA
• Vice President: John Brewington, Jr., CAFM, President, Brewington & Company, Mount Airy, NC
• Secretary: Jon Crull, CAFM, Deland, FL
• Treasurer: Ruth Alfson, CAFM, Manager, Fleet Center of Excellence, Serco Group, Inc., Fairborn, OH

The initial list of Directors includes:

• Bryan Flansburg, CAFM, Director, University of Colorado Transportation Services, Boulder, CO
• Christopher Amos, CAFM, City of St. Louis Equipment Services Division, St. Louis, MO
• Janis Christensen, CAFM, Director, Corporate Fleet Management Services, Mercury Associates, Rossmoor, CA
• Shawna Laird, Business Manager, representing Rocky Mountain Fleet Management Association
• The Managing Director is Patrick McCarren, Kingston, NJ.

PHH Arval Announces Winners of 2010 Business Impact Awards

PHH Arval recently announced the winners of its 2010 Business Impact Awards, which honor fleet managers for their achievements in operating their fleets at peak performance. The winners are:

• Organizational Leadership: Pete Shunning, Watson Pharmaceuticals, Inc., who, in less than a year, streamlined internal processes and instituted best practices and new fleet policies that should result in significant savings for Watson.
• Change Management: Tracy McCann, Mylan, Inc., who successfully consolidated three leasing suppliers and managed a global implementation across several continents in less than six months, achieving substantial synergies and savings for her fleet.
• Innovation: Mike Butsch, Joy Global, Inc., who was recognized for his creative problem-solving and focus on innovation in the areas of safety, telematics, and green practices. His approach produced significant savings for Joy Global.
• Safety: Kimberly Fisher, Cardinal Health, Inc.., who implemented a new safety program that includes safe driver recognition awards, online driver training, and policies addressing high-risk drivers. These practices have resulted in a 12% decrease in overall accident expense and a safer fleet.
• Lifetime Achievement: Barb Bonanti, STERIS Corporation, whose consistent use of best practices over her 43-year career with the company has resulted in a best-in-class fleet operation, maintaining operating costs among the lowest in PHH Arval’s client base. She is also a valued member of the PHH Client Advisory Board.