Excessive invoices on police-initiated towing and recovery bills following motor vehicle accidents involving commercial vehicles have plagued the transportation industry, with the problem growing worse over the last several years. One of the reasons we have recently seen an increase in excessive invoices is an attempt by towing companies authorized by various law enforcement agencies to perform towing and recoveries following an accident. The towing companies have been attempting to charge for their services by the pound based on the vehicle’s weight and cargo, rather than by the hour. The per-pound billing practices have absolutely no relation to the nature, type, and amount of work involved in a particular towing and recovery and lead to excessive invoices for motor carriers. Compounding the problem, in many instances, is the towing companies’ refusal to release the vehicle and cargo unless and until the excessive invoices are paid. This leaves motor carriers, especially smaller motor carriers, with few options other than to pay the excessive invoice to secure the return of the vehicles and cargo and get the vehicle back on the road. The billing and business practices of companies performing police-initiated tows are not unique to Maryland. It is a problem facing the trucking industry nationwide. In response to the growing problem, some states have enacted laws utilizing a variety of ways to address the issues with some of the strategies, including setting maximum rates for police-initiated tows or requiring the return of vehicles after payment of a small deposit.
Due to the combined efforts of the Maryland Motor Truck Association and the Owner-Operator Independent Drivers Association, Maryland is the most recent state to pass legislation to combat the problem of excessive invoices for police-initiated towing and recoveries. This is despite strong opposition from the towing industry. Although Governor Hogan has not yet signed the legislation into law, under the new legislation, the following provisions will take effect on October 1, 2022:
- While there is no rate-setting requirement by the Maryland State Police (MSP), all towing companies on the police-initiated towing lists are required to provide their maximum rates when they apply annually for the MSP tow program. The MSP must make those rates available to the public upon request.
- The MSP must establish a complaint and disciplinary process where towers can be expelled from their list.
- Motor carriers must be allowed to use the tower of their choice and bypass the MSP list as long as the motor carrier’s preferred tower can arrive at an accident scene in 30 minutes or less, except where the MSP believes allowing the use of the motor carrier’s preferred tower creates a safety risk.
- If there is a dispute over the amount of an invoice and the towing company is in possession of the cargo:
- If the cargo is owned by a person or entity other than the motor carrier involved, the tower must release the cargo to its owner or designee without any payment being made.
- If the cargo is owned by the motor carrier, the motor carrier must provide insurance information demonstrating it has sufficient coverage to cover the cost of the cargo cleanup. If it does not have sufficient coverage, the motor carrier will have to sign a letter of guarantee for payment of the cargo clean-up before the cargo is released.
These additional provisions take effect on October 1, 2023, under the new legislation:
Per pound billing will be banned in Maryland on police-initiated tows.
- A tower must release a motor carrier’s equipment (truck and trailer) with payment of a 20% deposit of the amount on the invoice.
The General Assembly will also be forming a legislative workgroup to further study various other issues related to police-initiated tows, including the number of towing companies on the MSP tow list, potential parameters for establishing fair and reasonable per pound billing rates, the number and nature of complaints filed with the MSP on towing related issues, and the number and nature of complaints filed with the Maryland Insurance Administration regarding towing related issues.
This new legislation is a step in the right direction in addressing the issue of excessive invoicing and protecting motor carriers from unreasonable and egregious billing and business practices.
Written by counsel Renee Bowen.