October 31 2012
On February 23 2012 the Hamm Court of Appeal clarified the extent of a freight forwarder's liability for damage which occurred due to self-evident improper loading.
The shipper claimed compensation from the carrier for damage to a machine which was caused due to self-evident insufficient fastening.
The freight forwarder had been engaged to transport a bed-type milling machine to the shipper's factory. The loading was carried out by several of the shipper's employees, as well as the carrier's truck driver. The 15-ton machine had been fixed with only 15 straps in the truck. Due to its improper fastening the machine shifted and was destroyed during transportation. The shipper argued that it did not have the necessary technical knowledge regarding the fastening of the cargo; hence its employees relied on the truck driver's experience. The carrier argued that the damage was caused due to the lack of proper loading, for which the shipper was responsible; consequently, according to Section 427(1) No 3 of the Commercial Code, it was relieved of its liability. Moreover, it argued that the shipper had the best knowledge of its goods.
The Essen District Court granted part of the claim. It found that the machine had been damaged due to improper fastening which was self-evident to the carrier's truck driver. The court ordered that the claim be split in favour of the carrier, as each side should take responsibility for the other in this respect.
The Hamm Court of Appeal confirmed the decision of the Essen District Court, but modified this decision to such an extent that the freight forwarder was ordered to pay half of the claim. It stated that the requirements of Section 425(1) of the code on the carrier's liability for damage to goods between taking over the goods and their delivery were fulfilled and that liability should not be excluded.
According to Section 412 of the Commercial Code, the shipper is responsible for proper loading, unless agreed otherwise. If a carrier's driver assists with loading and makes a mistake, this mistake shall be attributed to the shipper. The shipper cannot be released from liability due to its lack of technical knowledge. Accordingly, the carrier is essentially entitled to rely on the exclusion of liability.
However, this shall not apply if the loading error is self-evident – as in this case – and the driver does not mention this. The reason for this decision is that the loading error was not causative of the damage. Despite the lack of proper loading in this case, such a loading error did not exclude the carrier's liability, as it was also responsible for the improper fastening of the cargo. If inadequate loading was self-evident the carrier's truck driver was obliged to inform the shipper about the lack of proper fastening of the cargo, which could endanger operating safety. As the information was not passed on the carrier also caused the damage, and thus incurred liability. In this respect, the Hamm Court of Appeal stated that the freight forwarder was, according to Section 428 of the Commercial Code, responsible for the omissions of its truck driver to the same extent as for its own acts and omissions.
The court's decision is a Judgment of Solomon that extends the carrier's liability during loading, which contrasts with the wording of the Commercial Code and other court decisions. However, the court's reasoning, as well as its result (ie, the splitting of the claim between the parties), is correct. On one hand, if the shipper does not have the requisite technical knowledge, it cannot rely on the driver's experience only in respect of proper loading; rather, it must advise the driver of its lack of know how. On the other hand, the freight forwarder has a general legal obligation to keep safe the goods which have been handed over for transportation; thus if the cargo's safety is endangered it must advise the shipper accordingly, especially if the danger (ie, improper loading) is self-evident to the carrier's truck driver.
The decision further demonstrates that sometimes both parties underestimate their duties in respect of loading cargo. In particular, according to the law and respective interpretation, it is for the shipper to load, stow and secure the goods so as to provide for their safe transportation, as well as to unload them. If the shipper intends that these activities be carried out by the freight forwarder or its employees, this obligation must be transferred explicitly (ie, by means of contract). Otherwise, such intended assignment cannot be derived from the circumstances. Consequently, the Hamm Court of Appeal granted only half of the claim to the shipper.
For further information please contact Alexandra Siedschlag or Marco G Remiorz at Dabelstein & Passehl by telephone (+49 40 31 77 97 0), fax (+49 40 31 77 97 77) or email (email@example.com or firstname.lastname@example.org).
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