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09 May 2012
On January 12 2012 the Federal Court of Justice clarified the extent of a forwarder's (road carrier) liability for damages occurred before loading on a truck. Furthermore, the court clarified the liability for damage to the consignment.
The shipper claimed compensation for damage to a consignment against the freight forwarder, which had been engaged to transport a machine to an exhibition and back.
After the exhibition, the shipper's employees disassembled the machine with the help of the forwarder's forklift operator. The machine parts were left on the exhibition stand for several days before they were loaded onto a truck and transported back to the shipper, where they arrived heavily damaged.
The lower instance court and the appeal court granted the claim in full. They argued that the machine had been damaged in the custody of the forwarder and concluded that the forwarder had acted with gross negligence. This decision was based on an assumption that the parts had fallen off the forklift during loading.
The Federal Court of Justice confirmed the liability of the forwarder, but within the limitation of liability of 8.33 special drawing rights per kilogram.
The federal court stated that the forwarder (which acted on a fixed price basis and was thus to be treated like a road carrier) was liable for the period of storage on the exhibition stand, even though it had not taken over the parts to start the actual transport. If the parties have agreed – as they did in this case – that the forwarder must load the goods, the liability of the forwarder under Section 425 of the Commercial Code begins once the parts are in its custody, even if this is several days before actual loading. However, the contract of carriage must have already been concluded. If the parts are then stored by the forwarder due to a lack of transport capacity, the forwarder is liable under Section 425 of the Commercial Code. If the forwarder has only stored the consignment without having been instructed with the carriage – even if this may subsequently be intended – then it is not liable under German transportation law, although it may be held liable under German storage law.
The federal court further granted the claim only within the limitation of liability, denying gross negligence. The court confirmed the general obligation of a forwarder under German law to investigate the cause of damage, and that it may be held liable in full if it has not fulfilled this obligation properly. However, in this case the assumption that parts might have fallen off the forklift during loading was insufficient, as this could also have resulted from the forklift operator's simple negligence, and there were no further indications of gross negligence.
The federal court rejected the claimant's argument that the forwarder had not fulfilled its obligation to investigate the cause of the damage. This was because an employee of the exhibitor had noted the name of the driver and the company of the actual carrier which had taken over the goods. Thus, the court saw no difference between the level of information to which the claimant and the forwarder had access. Such a difference usually gives rise to the forwarder's obligation to investigate and describe the cause of the damage, as the shipper normally has no insight into the operations of the forwarder and its subcontractors. However, in this particular case, the claimant had the chance to speak to the driver of the actual carrier in order to obtain more information about the cause of the damage and potentially to put together an argument for gross negligence. Therefore, the federal court denied gross negligence and granted the claim only within the limitation of liability.
The first part of the decision extends the liability of a forwarder to pre-transport storage under German transport law, even if the transport begins several days later. However, this applies only when the forwarder has already been instructed with the transport.
The second part of the decision makes it even more difficult for claimants to obtain full compensation in the case of damage to a consignment when the shipper and forwarder have access to the same information. However, in most cases, the shipper has no possibility to find out the contact details of the actual carrier. In such cases, it can still be argued that the carrier is not entitled to rely on the limitation of liability, as long as it has not fulfilled its obligation to investigate the cause of the damage. However, if the carrier can convince the court that it has tried its best to discover the cause of the damage, but has nevertheless failed to do so, it is possible that the carrier will not be held liable beyond the limitation of liability.
The situation is different in cases of loss of a consignment, where the carrier has not only the duty to investigate but also the duty to explain in detail how the consignment was handled during the entire transport. If the consignment is lost, there is still a good chance to obtain full compensation beyond the limitation of liability. If there is damage to the consignment, compensation varies depending on the facts of each case, but it is generally more difficult to exceed the limitation.
For further information on this topic please contact Steffen Maelicke or Olaf Hartenstein at Dabelstein & Passehl by telephone (+49 40 31 779 70), fax (+49 40 31 779 777) or email (firstname.lastname@example.org or email@example.com).
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