Limits & Defences

Defences for Carrier

A number of potential defences are open to the carrier.  The burden of proving that the loss, damage or delay is due to one of the grounds of defence provided for, lies on the carrier. If the carrier can show that it did not cause the loss or damage, such as where it was inevitable, then he will not be liable.  If the loss, damage or delay is caused partly by an event for which the carrier is liable and partly by one for which he is exonerated (such as the negligence of the claimant), liability may be apportioned.

The carrier is relieved of liability if the loss, damage or delay was caused by the wrongful act or neglect of the claimant.  The carrier is relieved of liability, if the loss, damage or delay was caused by the instructions of the claimant given otherwise than as a result of a wrongful act or neglect on the part of the carrier.  Wrongful in this context implies fault, such as negligence.

The carrier is relieved of liability for loss, damage or delay caused by an inherent vice in the goods. An inherent vice refers to an inherent defect.  It must not be a defect that arises externally.  Goods should be in a position to survive the ordinary circumstances of carriage, assuming that the carrier has dealt with them with reasonable care.

Vice in this context is wider than defects in the goods themselves.  It may arise from the manner in which they are packed and presented.  An Inherent vice is one that is not generally found in all goods of that type, at that time.


Dangerous Goods or Special Handling

In the case of dangerous goods, the carrier’s liability is dependent on whether it has been informed of the exact nature of the danger, and if necessary of the precautions to be taken.  The burden of proving, that the carrier knew by other means of the nature of the danger, rests with the sender or the consignee.  Certain goods are inherently and notoriously dangerous.  In other cases, the carrier must be specifically advised of the danger.

Similar principles may apply to non-dangerous goods which require special handling or treatment.  If the carrier has not been given the requisite information, the carrier may be able to show that the loss or damage is due to the wrongful neglect or the instructions of the client.

The CMR provides that the goods of a dangerous nature which in the circumstances, the carrier did not know to be dangerous, may at any time or place be unloaded, destroyed or rendered harmless by the carrier without compensation.  The sender is liable for all expenses, loss, and damage arising out of their handing and for their carriage.


Carrier Relying on Instructions

The liability of the carrier for the consequences arising from the loss or the incorrect use of the documents specified in and accompanying the consignment note or deposited with the carrier are those applicable to an agent. The compensation payable by the carrier shall not exceed that payable in the event of the loss of goods.  The agent’s duty is to exercise reasonable care.

A carrier who has not carried out the instructions of the sender / consignor with regard to the disposal of the goods or who has carried them out without requiring the first copy of the consignment note to be produced is liable to the person entitled to make a claim for any loss or damage thereby caused.


Carrier’s Defences I

The carrier is relieved of liability if the loss, damage or delay was caused by circumstances which the carrier could not avoid and which he was unable to prevent.  The standards require something between taking every conceivable precaution and doing what is reasonable in accordance with current practice. The standard is measured relative to a carrier with standard knowledge and skill.

Unavoidable circumstances may manifest themselves in the course of carriage, in any number of ways.  Regard is had to the measures which the carrier should take to mitigate or avoid the damage, delay or loss arising from the risks concerned.

The carrier must observe the law, in particular, the laws relating to driving hours and the health, safety and welfare of drivers.  The standards of the industry will determine largely, what is required.  However, industry practice may be rejected, if it is flawed and inadequate.

If the claimant alleges breach of duty by the carrier, he must give evidence of what could or should have been done, in order to avoid the loss.  The carrier may rebut the claim on the basis that the measure would not have avoided the loss, or that the measure is beyond the standard of care required.


Carrier’s Defences II

If there is an accident in which the goods are damaged, the carrier will be commonly liable for the loss.  If the accident arises from extraordinary circumstances, it may be possible to show that the carrier has not breached the requite standard of care.

The carrier may defend the claim on the basis of the special risks attaching to the goods.  If the vehicle was specially equipped to protect the goods, (for example from a temperature perspective), the carrier must show that he took steps incumbent on him, with respect to the choice, maintenance and use of such equipment. The carrier is liable unless he could have avoided by taking the requisite care, the loss, damage or delay which has occurred and its consequences.

Although theft and robbery are largely unavoidable, carriers have duties to take steps to avoid obvious risks.  Basic anti-theft security should be provided. In some circumstance, the employment of security guards or extra security would be required to meet the standard.  In many cases, the additional measures would not necessarily have prevented the loss, in which event there is no liability.  In other cases, the carrier or his employees may have exposed the goods to obvious risks, such as by leaving them unattended, in which event the negligence may clearly cause the loss.


Ineffective Defences

Bad weather is not generally a defence.  A carrier is expected to anticipate and mitigate the risks arising from weather conditions.  Even in highly exceptional weather circumstances, the driver may be expected to take steps to protect the goods.

The carrier must generally mitigate against the possibility of delay.  Even if the delay is unavoidable at a given point in time, the carrier may be liable for failure to deal with the risks which caused the delay.  Similarly, many risks which may cause a delay from inadequate administrative and paperwork compliance, are carried by the carrier and do not afford a defence.

The CMR provides that the carrier shall not be relieved of liability by reason of the defective condition of the vehicle used by him in order to perform the carriage nor the wrongful act or neglect of the person from whom he may have hired the vehicle or of any agents or employees of the latter. The fitness of the vehicle refers to the vehicle as such and also to its fitness, ability and capacity to receive the goods of the type concerned.


Limits to Compensation

Limits to compensation apply under the Convention.  They do not apply to separate contract dealings which are outside the scope of the CMR.  However, the Convention is broad in scope so that there is a relatively narrow scope for the exceptions to apply.

In the case of loss of the whole consignment, the compensation may not exceed the amount payable in the case of total loss.  In the case of part of the consignment being damaged, the amount payable by way of compensation may not exceed the amount payable in the case of loss of the part affected.

The measure of total loss is their value at the time and place of acceptance for carriage.  This is however subject to financial limits provided for by the Convention.  Compensation is not to exceed 8.33 units of account per kilogram of gross weight.  The units of account are the IMF’s Special Drawing Rights.  There is provision for conversion of them into a domestic currency.  The gross weight includes packing.

Where a single consignment is damaged, and the damage renders the remaining parts less useful, even if only temporarily until the repair or replacement of the damaged parts, the limits for total loss apply.  Otherwise, the limit is for a partial loss.


Damage to Part

If parts of a single consignment which are consigned under a single contract are damaged to different extents, some below the limit per weight and others above it, the carrier may seek to have the liability measured as an aggregate of liability of the parts as if they were separate consignments.  By this method, the total liability will be less than the liability for the total damage to the whole, when subjected to the per kilogram limit for the whole.

However, the rule is that the assessment must be for the whole. This is particularly appropriate where the carriage is based on the weight as a whole, and the rights of disposal apply to the whole consignment.  This may lead to an anomaly, but the contrary would lead to greater anomalies as to compensation levels depending on circumstances, such as the way goods were packaged and labelled.

If a single load, consists of different consignments under different consignment notes, they are treated separately.  In the case of groupage, whereby a number of different consignments travel under a single note which is silent as to the value of the goods and sent to a single consignee, the court will look at the reality and substance. If there are more than one sender and one consignee, they will be in reality several contracts for carriage under a single consignment note.  In this case, liability is assessed by reference to the weight of the part concerned.


Delay

In the case of delay, a carrier must pay compensation for damage not exceeding the carriage charges.  These are the charges for the entire journey and not simply those relating to a part or stage of the journey or for part of one consignment.  The limit as to delay may be disapplied in the case of special interest, such as where there is the pre-agreed critical deadline for delivery.

Compensation for loss or damage to goods is measured under the Convention by reference to their value at the place and time of acceptance for carriage.  This may exclude other types of loss such as wasted expenditure. The right to recover wasted expenditure is argued to follow from the Convention as a matter of logical necessity.


Limits Varied

The general limits of liability may be increased by a contract by the parties.  A declaration may be made that the value of the cargo exceeds limit which would otherwise apply.  In this case, the value is the actual value of the goods, fixed under the CMR.

A consignor with a special interest in the arrival of the goods may declare a special interest.  In this event, he may claim consequential loss of a kind for which the carrier would not otherwise be liable.

The CMR provides that the sender may against payment of a surcharge, to be agreed, declare on the consignment note, a value of the goods exceeding the standard limits, in which case, the amount of the declared value applies as the limit.


Declaration of Special Interest

The sender may against payment of a surcharge to be agreed upon, fix the amount of a special interest in delivery, in the case of loss or damage or of an agreed time limit being exceeded by entering such amount on the consignment note.

If a declaration of a special interest in delivery has been made, compensation for the additional loss approved may be claimed up to the total amount of the interest declared independently of the compensation provided for above.

In each event, the claimant must prove actual loss of the amount concerned, claimed. This may cover consequential loss.  In the normal course, the carrier applies a higher charge for the greater risk which it undertakes.

The consignor must agree the higher limit with the appropriate authorised party within the carrier. The driver does not usually have authority to bind the carrier to higher limits in variance of the contract between the consignor and carrier.


Wilful Misconduct Disapplies Limits I

A carrier may not avail himself of the provisions of Chapter IV of the CMR, which exclude or limit his liability or which shift the burden of proof, if the damage was caused by his wilful misconduct or by such default on his part, as in accordance with the law of the court or tribunal seized of the case is considered equivalent to wilful misconduct.

In case of wilful misconduct by agents, employees or persons of whose services he makes use for the performance of the carriage, acting within the scope of their employment, the carrier is bound.  This may extend to the heft of goods in the course of an employee’s employment, where the employee is obliged to take care of the goods.

Wilful misconduct appears to require intentional or reckless action.  It implies a standard of failure worse than negligence or possibly gross negligence.  It implies that the person knows or should know that the damage will result.  The loss must be intended, or he must be reckless as to whether it will occur.


Wilful Misconduct Disapplies Limits II

The probability of the loss is not necessarily decisive.  Misconduct is wilful if it increases the risk and the carrier is aware of this.  Accordingly, if in the case of an emergency, a carrier which in the heat of the moment in which damage was probable, whatever course is chosen, chooses a particular course, it is unlikely to be wilful misconduct, unless he deliberately chooses a course likely to cause the greater damage.

The damage must be caused by the wilful misconduct.  Negligence or even gross negligence is probably insufficient.  Wilful misconduct or an equivalent default extends the limitation period to three years.

The carrier is deprived of provisions of the chapter which exclude or limit his liability or which shift the burden of proof, as set out above.

The provisions refer to wilful misconduct and default as it applies in accordance with the law of the court seized of the case, equivalent to wilful misconduct.  It appears the additional words have no relevance at common law.  There are such concepts in continental law jurisdictions.


References and Sources

Convention and Legislation

Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 19th day of May, 1956

Protocol to the Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 5th day of July, 1978

Protocol to the Convention on the Contract for the International Carriage of Goods by Road (CMR) done at Geneva on the 27th of May 2008

International Carriage of Goods by Road Act, 1990.

Books

International Carriage of Goods by Road: CMR 6th Edition ‎ 2014 Malcolm Clarke

C.M.R. : Contracts for the International Carriage of Goods by Road 3rd Ed 2014  Donald James Hill

The Law of Transport and Road Haulage (1999) J. Canny  (Author)