Calculating carriers' contributory negligence

Facts
Hamburg Regional Court decision
Hamburg Higher Regional Court decision
Comment

Facts

A dispute arose over claims for damages due to the loss of a shipload of two construction cranes, which had fallen overboard in heavy seas. The ship had been damaged by the cranes going overboard and had to cut short its voyage and anchor in a port to be repaired. The weather in the Bay of Biscay, where the accident occurred, was typical of the season in which the voyage took place.

According to a court-appointed expert, the causes of the damage were a defective substructure of the cargo on the ship and a lack of cargo securing. The substructure had been constructed by the cargo owner (the charterer), while the obligation to secure the cargo lay with its contractual partner (the carrier). Both defects were considered causative in the damages case and even if one of them had not occurred, the damage would have resulted from the other.

The carrier's insurer (the plaintiff) brought an action for €2.3 million in damages against the carrier, which in its defence explained, among other things, the offsetting against the damage caused to the ship.

Hamburg Regional Court decision

The Hamburg Regional Court rejected that the carrier had carelessly caused the damage and considered the weight-based basic liability of 2 standard drawing rights (SDRs) per kg to apply. The consignment weighed 163,000kg. However, as neither cause of damage could be ignored without the damaging event ceasing to exist, both were afforded equal weight in the court's opinion and each of the asserted claims was reduced by 50%. As a result, the plaintiff was entitled to only 1 SDR per kg in damages. The counterclaims were regarded as undecided and mostly rejected. The parties' appealed this rejection.

Hamburg Higher Regional Court decision

The Hamburg Higher Regional Court first examined the contractual agreements (Decision 6 U 222/16 of 8 November 2018). Although charterers may also be responsible for securing cargo, in the case at hand the court considered that the parties had shared the responsibility for performing the necessary activities (ie, the charterer had been responsible for constructing the substructure, while the carrier had been responsible for securing the load). However, both services were defective. Contrary to the regional court's view, the Hamburg Higher Regional Court considered the charterer primarily responsible (ie, 70%) for causing the damage. The plaintiff's appeal was nevertheless partially successful.

The Hamburg Higher Regional Court ruled that the liability had been miscalculated and that the contributory negligence should have been examined before the limitations of liability. The court opined that, in view of Section 254 of the Civil Code, contributory negligence should be considered after or in conjunction with determining concrete damages and before the limitations of liability. Accordingly, the total damages asserted by the plaintiff was reduced by 70%, but the plaintiff was nevertheless awarded the basic liability of 2 SDRs per kg. The plaintiff's damages (after the share of contributory negligence deduction) were still above the basic liability of 2 SDR per kg, totalling approximately €660,000. Thus, the charterer's contributory negligence had no impact on the carrier's liability. The defendant's counterclaims remain undecided.

Comment

The Hamburg Higher Regional Court's decision is unconvincing and conflicts with the examination sequence typically preferred by the Federal Court of Justice.

The Federal Court of Justice regularly applies Section 254 of the Civil Code as a corrective if a carrier is found liable without limitation due to grossly negligent behaviour or wilful misconduct, but only if its contributory negligence may have contributed to the damage (eg, Federal Court of Justice Decision I ZR 132/05 of 3 July 2008, in which the court affirmed a reduction of damages to zero because a carrier had abandoned goods for transport, which were excluded according to the carrier's conditions of carriage). Both the Federal Court of Justice and the Hamburg Regional Court examine the amount of limited or unlimited liability first and, in the case of unlimited liability, any contributory negligence which may be attributed to the claimant.

For further information on this topic please contact Carsten Vyvers at Arnecke Sibeth Dabelstein by telephone (+49 69 97 98 85 0) or email (c.vyvers@asd-law.com). The Arnecke Sibeth Dabelstein website can be accessed at www.asd-law.com.