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Employees risk confiscation of the company car when driving recklessly

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Legal news
calendar 30. May 2021
globus Denmark

Pursuant to a new act, it will be possible to confiscate the company car if an employee has driven in it recklessly. The reason is that under the new rules, it is not decisive who the owner of the vehicle is. Confiscation is therefore possible regardless of who owns or leases the company car. We have taken a closer look at the new rules and have considered what companies can do to avoid having the company car confiscated.

The Danish Parliament has adopted a new Act on reckless driving, which substantially impacts companies that have company cars at their employees’ disposal. Pursuant to the new rules, the police can seize and then confiscate a company car, if an employee has driven recklessly in it.

With the new rules, the police can confiscate the car irrespective of it being owned or leased by the company, and not the employee. It is therefore not decisive who owns or leases the car. What is decisive is first and foremost if the car has been driven recklessly.

As a result, confiscation is also a possibility if a family member, to whom the employee has lend the car, drives it recklessly. Reckless driving is defined as particularly careless driving, driving more than 200 km per hour or more, or drunk driving with a per mile exceeding 2,00.

The new rules entered into force on 31 March 2021.

What can companies do to avoid confiscation?

Companies can avoid confiscation under the new rules in some situations. For example, where confiscation would be disproportionately intrusive. However, in this connection, it plays a role if the company could have foreseen that the company car would be used for reckless driving.

Moreover, companies can introduce different measures in an attempt to avoid that employees will drive recklessly in the company car. This includes, among other measures, making it clear to employees that they can be held liable if the company car gets confiscated.

Should an employee then, nonetheless, drive recklessly and have the company car confiscated as a consequence, the company can submit a claim for compensation during the employee’s criminal proceedings.

Examples of measures that companies can introduce to prevent confiscation of the company car and ensure a potential claim for compensation could include:

  • That there is a clear prohibition against reckless driving in the company car
  • That the company checks that employees have not previously been punished for reckless driving
  • That employees must ensure that other users of the company car, including family members, have not previously been punished for reckless driving, or intend to drive recklessly
  • That it is clear to employees that they must inform the company of any legal proceedings which includes a risk of confiscation of the company car
  • That employees can be held liable towards the company in the event of confiscation
  • That reckless driving can result in employment-related sanctions, including summary dismissal

IUNO’s opinion

It is still unclear to what extent companies can prevent confiscation of the company car if an employee drives in it recklessly. Nevertheless, companies can introduce different measures to ensure proof that it was not possible for the company to foresee the reckless driving.

IUNO recommends that companies draft up new policies or updates existing policies on reckless driving. The new requirements can also be included as part of the employees’ employment contract or as an addendum to their existing employment contracts.

In any circumstance, companies are responsible for ensuring that the work is not organized in a manner that includes a risk of reckless driving. This could for example be the case, if employees do not have the time for taking breaks and have to rush when driving between destinations.

[Act on changing law on road traffic of 27 March 2021]

The Danish Parliament has adopted a new Act on reckless driving, which substantially impacts companies that have company cars at their employees’ disposal. Pursuant to the new rules, the police can seize and then confiscate a company car, if an employee has driven recklessly in it.

With the new rules, the police can confiscate the car irrespective of it being owned or leased by the company, and not the employee. It is therefore not decisive who owns or leases the car. What is decisive is first and foremost if the car has been driven recklessly.

As a result, confiscation is also a possibility if a family member, to whom the employee has lend the car, drives it recklessly. Reckless driving is defined as particularly careless driving, driving more than 200 km per hour or more, or drunk driving with a per mile exceeding 2,00.

The new rules entered into force on 31 March 2021.

What can companies do to avoid confiscation?

Companies can avoid confiscation under the new rules in some situations. For example, where confiscation would be disproportionately intrusive. However, in this connection, it plays a role if the company could have foreseen that the company car would be used for reckless driving.

Moreover, companies can introduce different measures in an attempt to avoid that employees will drive recklessly in the company car. This includes, among other measures, making it clear to employees that they can be held liable if the company car gets confiscated.

Should an employee then, nonetheless, drive recklessly and have the company car confiscated as a consequence, the company can submit a claim for compensation during the employee’s criminal proceedings.

Examples of measures that companies can introduce to prevent confiscation of the company car and ensure a potential claim for compensation could include:

  • That there is a clear prohibition against reckless driving in the company car
  • That the company checks that employees have not previously been punished for reckless driving
  • That employees must ensure that other users of the company car, including family members, have not previously been punished for reckless driving, or intend to drive recklessly
  • That it is clear to employees that they must inform the company of any legal proceedings which includes a risk of confiscation of the company car
  • That employees can be held liable towards the company in the event of confiscation
  • That reckless driving can result in employment-related sanctions, including summary dismissal

IUNO’s opinion

It is still unclear to what extent companies can prevent confiscation of the company car if an employee drives in it recklessly. Nevertheless, companies can introduce different measures to ensure proof that it was not possible for the company to foresee the reckless driving.

IUNO recommends that companies draft up new policies or updates existing policies on reckless driving. The new requirements can also be included as part of the employees’ employment contract or as an addendum to their existing employment contracts.

In any circumstance, companies are responsible for ensuring that the work is not organized in a manner that includes a risk of reckless driving. This could for example be the case, if employees do not have the time for taking breaks and have to rush when driving between destinations.

[Act on changing law on road traffic of 27 March 2021]

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Anders

Etgen Reitz

Partner

Søren

Hessellund Klausen

Partner

Kirsten

Astrup

Associate

Cecillie

Groth Henriksen

Associate

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