Liability Limitation under International Road Carriage Convention
January 30 2008
In a recent case decided in June 2006 the Federal Court of Justice dealt with a damages claim resulting from the loss of transported goods during cross-border transportation which was subject to the Convention on the Contract for the International Carriage of Goods by Road. The court addressed whether the carrier could rely on the limitation on liability according to Article 23(3) of the convention.
The carrier had been instructed to transport a pallet of 800 computer hard disks from Germany to France by road. The carriage was performed by a hooded lorry. When the driver stopped overnight and slept in the cab of the lorry in a motorway service area in France, the goods were stolen by thieves who cut open the hood of the lorry.
The transport insurer compensated its insured, having instructed the carrier with the transport for the loss of the goods, and asserted a damage claim against the carrier for the full value of the transported goods. The insurer argued that the carrier could not rely on the limitation of liability according to Article 23(3) (ie, that compensation should not exceed 8.33 units of account per kilogram of gross weight lost). It argued that the carrier caused the loss of the goods in a manner to be considered as equivalent to wilful misconduct. Therefore, according to Article 29(1) of the convention, the carrier could not avail itself of the provisions to limit its liability. The insurer claimed that the carrier had not taken the necessary safety precautions because the driver did not use a trunk lorry and because he spent the night in an unguarded parking area.
The Federal Court dismissed the action of the insurer. According to the court, a default on the part of a carrier can qualify as equivalent to wilful misconduct only if the carrier seriously violates its contractual duties and thereby disregards the security interests of the contract partner in a severe manner. Further, it held that the carrier must be conscious of the high probability of the occurrence of damage, which means that it must be obvious to the carrier that violation of its duties is likely to cause damages. The court decided that these conditions were not met.
The court stated that the carrier did not seriously violate its contractual duties. The carrier admitted that the computer hard disks had a high value, could easily be sold and were therefore at increased risk of theft. The court pointed out that this would normally give rise to the carrier taking specific security measures. However, in this case the carrier had no reason to assume an increased risk for the goods because it knew only that it was to transport 800 single computer parts, but had no specific knowledge of what kind of computer parts it carried. For this reason the court concluded that the carrier had no obligation to take specific safety measures and, therefore, did not have to use a trunk lorry instead of a hooded lorry. Also, according to the court, the driver could not be blamed for spending the night in an unguarded parking area. Since he did not have to assume an increased risk of theft, the driver did not act recklessly in this respect because the parking lot was illuminated and the driver stayed in the lorry.
This is a surprising decision which seems to reveal a new trend. The court of second instance, the Munich Court of Appeal, which issued a different judgment, was also forced to realize this. Its decision was set aside by the Federal Court of Justice ruling. In the past, several higher regional courts have decided against the carrier in similar cases and ruled that the carrier could not limit its liability according to Article 23(3). In future, they may have to take a different view in such cases. The customers of transport firms must also take the appropriate steps following this decision. If goods are to be transported and there is an increased risk of theft, the carrier should be explicitly instructed to take certain safety measures. Further, the carrier should be informed in detail about the specific kind of goods it is to transport. Otherwise it may be difficult for the customer or the transport insurer to claim the full value of stolen goods from the carrier.
For further information on this topic please contact Jan Backhaus at Dabelstein & Passehl by telephone (+49 40 31 77 970) or by fax (+49 40 31 77 97 77) or by email (j.backhaus@da-pa.com).
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