Electronic Logging Devices (ELDs) in Canada mark a significant step toward potentially shifting liability in commercial trucking. ELDs automatically track driver’s driving and on-duty hours using the data from the Electronic Control Module (ECM) of the vehicle SOR/2005-313 77(1). Flagging violations that could indicate driver fatigue or out-of-service conditions SOR/2005-313 section 91. The Federal Hours of Service SOR/2005-313 87 (1) requires that carriers monitor the driver’s compliance in real-time, using the data from the ELD, with the ultimate goal of preventing out-of-service drivers from operating on public roads. This regulation could be used to impact liability determinations and insurance claims in the event of a collision. By documenting instances where drivers were operating in out-of-service condition, ELDs expose both the driver and the carrier to increased liability and, potentially, significant financial penalties.
Liability and ELD Data in Black Swan Scenarios
The continuous recording and monitoring of driving and on-duty times not only keeps drivers in check but also holds carriers accountable for a driver’s compliance. If a driver is within 30 minutes of a duty status limit or off-duty requirement the ELD alerts the driver and the carrier. The ELD alerts the driver and the carrier if any device or connection issues are detected or any periods of driving time with no driver logged in to the ELD device. This setup ensures that carriers have a real-time mechanism for preventing overworked drivers from being on the road. If an accident occurs while a driver is in an out-of-service condition, both the driver and the carrier are liable because, a driver in an out-of- service condition is not supposed to be driving. A driver in an out-of- service condition is required to immediately stop and not continue driving until the out-of- service condition is resolved. If the driver was following the regulations the driver would not have been in the location of the incident because they would not have been driving.
The Federal Hours of Service SOR/2005-313 section 91 are the out-of- service conditions:
91 (1) (b) driving time or off-duty time requirements.
91 (1) (c) no RODS – fail to produce.
91 (1) (d) duplicate RODS, inaccurate information and falsification.
91 (1) (e) falsified/destroyed RODS or supporting document.
91 (1) (f) ELD that has a disabled, deactivated, disengaged, jammed or otherwise blocked. ELD that has been re-engineered, reprogrammed or otherwise tampered with so that it does not accurately record and retain the data that is required to be recorded and retained.
If a driver is found to be in an out-of-service condition due to tampering, SOR/2005-313 86 (3), the driver is out-of-service until the tampering is corrected, which may be longer than the maximum 72 hours. 91 (4) The out-of-service declaration in respect of a driver who contravenes section 86 continues to apply beyond the 72 hours until the driver rectifies the record of duty status, if applicable, and provides it to the director or inspector so that the director or inspector is able to determine whether the driver has complied with these Regulations.
Tampering: SOR/2005-313 86 (3) No motor carrier shall request, require or allow any person to, and no person shall, disable, deactivate, disengage, jam or otherwise block or degrade a signal transmission or reception, or re-engineer, reprogram or otherwise tamper with an ELD so that the device does not accurately record and retain the data that is required to be recorded and retained.
Scenario 1: Driver Exceeding a Daily Limit
Driver has exceeded a daily limit SOR/2005-313 91 (1) (b) and is in an out-of-service condition at the time of an accident. The fault lies entirely with both the driver and the carrier because SOR/2005-313 87 (2), the carrier is to take immediate action when non-compliance is detected. ELD RODS are real-time information; detection of an out-of-service condition is immediate, and the carrier is obligated to prevent drivers from operating in such a state. In such cases, the insurance company may decline the claim, as the driver should not have been on the road at that time. This shifts the liability from the broke driver to the carrier, who has money, assets and substantial insurance coverage.
Scenario 2: Malfunction, Disconnected ELD and Unidentified Driving Event
If an ELD malfunctions or loses connection to the engine control module (ECM), it triggers a visual and/or audible alarm for both the driver and the carrier. The carrier and the driver are supposed to work together to correct and clear the data diagnostic codes. If the malfunction protocol was not followed or the device is in a chronic malfunction because the ELD is not connected to the ECM or not receiving power that is tampering, SOR/2005-313 86 (3). With data missing or compromised, there is no way to verify the driver’s actual driving time, making it possible for an insurance claim to be denied. A driver that does not log in to the ELD will incur unidentified driving events and will not be able to generate a RODS SOR/2005-313 91(1) (c). The carrier is responsible to assign the driving time to the correct driver, the Technical Standard 3.1.6.
The Canadian Insurance Model
Canada’s insurance models, divided into public (no-fault) and private (tort-based) systems, also influence how ELDs could impact claims. In no-fault provinces, each driver’s insurance typically covers their own costs, limiting cross-claims for damages. However, in tort-based provinces like Alberta, at-fault drivers can be sued for damages, opening the door for high-dollar claims against carriers. In cases where ELDs reveal negligent oversight by the carrier, plaintiffs could target carriers, leading to “nuclear verdicts” similar to those in the United States. “Nuclear verdicts"—verdicts costing over $10 million in damages—are common in American trucking accident cases. Trucking litigation data between 2006 and 2019 showed 26 cases over $1 million from 2006 to 2011. In the last five years of that data set, 300 cases cost over $1 million. A recent study from the U.S. Chamber of Commerce Institute for Legal Reform showed that between June 2020 and April 2023, the average award was $27.5 million.
Given the growing availability of data from the ELD and ECM (engine control module), it is possible that insurance companies will begin to request these records as part of claim investigations involving a commercial truck. With such evidence, insurers can make stronger arguments for denying coverage when non-compliance is documented. Historically trucking companies involved in an accident blame the driver, maybe get a shockingly low administrative penalty from the provincial government, get an insurance premium bump and continue on unscathed. How many drivers are in jail compared to company owners and safety officers? Exactly, murderers get convicted using GPS data why not ELD and ECM data?
Case Study: Tracey Morgan Walmart Crash as a Liability Example
The 2014 Tracey Morgan Walmart crash underscores the consequences of driver fatigue and the accountability of carriers in managing compliance. In that case, Walmart’s driver had been on duty for over 23 hours, with minimal sleep before his shift. Although Walmart had telematics data on critical driving events, it did not act on these insights, which could have prevented the accident. The $90 million settlement, influenced by Walmart’s failure to mitigate fatigue risks, exemplifies how data-based liability can result in significant penalties.
Conclusion
The shift to ELD’s in Canadian trucking introduces a new level of accountability, where drivers and carriers could be held to real-time monitoring standards. This technology empowers insurers and regulators to have a seat in the cab with the driver. As ELDs continue to integrate into the regulatory and insurance frameworks, carriers may face increased financial risk if they fail to act on data insights, making comprehensive compliance essential for both safety and business resilience. Insurance companies make money by increasing rates or paying less claims, a real time, certified record of non-compliance is probably enough evidence to deny a claim.The federal and provincial governments do a terrible job of monitoring or enforcing anything when it comes to commercial vehicle safety. If the governments are not going to do their jobs, then the insurance companies will have to do it.
If you smash up your vehicle driving drunk your insurance company is not going to pay for your new car. In commercial policies these are called exclusions, check out my next week blog where I explain exclusions and why insurance companies won’t have to pay.
