Annemieke Spijker November 11 2015 Roadblocks: who foots the bill for cargo loss or damage in the event of delay? AKD | Shipping & Transport - Netherlands Annemieke Spijker Shipping & Transport IntroductionCMR ConventionType of damageShort time limitInvoking force majeureCommentIntroductionDemonstrations by disaffected farmers blocked several major highways in France and Belgium recently, resulting in increased costs and reduced profits for the road haulage industry and financial loss for cargo interests due to delay and damage. This raises the question of whether and to what extent the road carrier is liable for such loss and damage. This update highlights some important points to bear in mind when it comes to the assessment of claims for losses due to delay.CMR ConventionUnder the Convention on the Contract for the International Carriage of Goods by Road (CMR Convention), a road carrier must deliver its cargo in good condition and on time. In principle, failure to do so means that the carrier will be liable and – pursuant to Article 23 of the convention – obliged to pay compensation. For loss or damage, compensation will not exceed 8.33 special drawing rights (SDRs) per kilogram. The compensation limit for loss due to delay is equal to the carriage charges, according to Article 23(5).These limits do not apply if the loss due to delay is caused by intent or wilful recklessness on the part of the carrier – something which is very difficult to prove in the Netherlands. Indeed, in case of delay due to roadblocks, the necessary burden of proof cannot be met, so carriers will be able to rely on these limits if they are deemed liable. Further, they will be relieved entirely of liability in the event of force majeure.Type of damageDamage to goods caused by demonstrations or due to quality deterioration during a longer-than-expected road transit qualifies not as loss resulting from delay, but rather as material damage. The compensation limit of 8.33 SDR per kilogram therefore applies.Loss due to delay which the owner of the consignment may sustain would include, for example, loss caused by a factory shutdown or a contractual penalty which a seller incurs when delivery of goods to the purchaser is late. Unlike in the case of material damage to the goods, this type of consequential damage qualifies for compensation and falls under the category of loss due to delay. However, the liability is equal to the carriage charges, meaning that the carrier does not have unlimited liability, and carriers' liability insurance policies might provide cover only up to such amount.If delay occurs during a specific leg of the carriage which forms part of a combined (multimodal) transportation performed by the carrier, the carrier's liability is limited to the total amount of the carriage charges agreed for the entire combined carriage. Therefore, the client is not limited to reclaiming only the carriage charges for the road carriage leg (during which the delay occurred), but may also reclaim regarding (for example) the sea or air leg, for which substantially higher freight charges will likely have been agreed.Short time limitA very short time limit applies to compensation claims for loss due to delay. Pursuant to Article 30(3) of the CMR Convention, the claimant must send written notice of a possible claim for loss due to delay within 21 days of the goods being placed at the disposal of the consignee. If this reservation in writing is not sent in time, the claim lapses and the carrier need pay nothing. The time limit starts to run on the date of delivery of the goods and refers to calendar days (ie, not working days).If the goods are not delivered at all, two possible scenarios arise:Loss of the consignment caused by delay (eg, through decay) constitutes material damage. In such cases other provisions of the CMR Convention apply, including the regular one-year limitation period provided in Article 32.If delivery fails because the consignee or owner no longer wants the cargo to be delivered (eg, because it has sustained financial damage or loss), the situation is regarded as delay. In such cases the time limit usually starts to run on the date on which an attempt was made to deliver the goods or the consignee declared that it was unwilling to take delivery. In order to claim compensation from the carrier for loss due to delay, it is therefore necessary to send a reservation in writing to the carrier in good time.Invoking force majeure The Netherlands has little case law on whether carriers can invoke force majeure in the event of delay caused by a demonstration blocking a highway. However, existing case law (eg, on border blockades) produces the following conclusions:Whether a delay constitutes force majeure on the part of the carrier depends on the factual circumstances of the case.The carrier must prove that force majeure exists.In the event of a delay caused by a border blockade, the determining factors are:the foreseeability of the blockade;knowledge of the blockade; andthe actions of the carrier or other relevant party.If, on departure, the parties do not and cannot foresee that there will be a border blockade, force majeure exists. In that case the blockade cannot be considered as a business risk attributable to the carrier. Case law further indicates the following:A relevant press report is sufficient to show that there was a border blockade, unless the other party contradicts that fact.If a driver knows about a border blockade, he or she must attempt to limit its consequences (eg, by choosing a different border crossing). If it is afterwards plausible that no alternative existed or that the driver was unaware of the blockade, force majeure exists.The carrier must prove that the driver enquired properly about the possibility of a blockade. If a delay occurs despite favourable expectations, force majeure can be invoked.Where a claimant seeks to recover a loss from a carrier due to delay or damage caused by decay, the carrier can invoke force majeure. However, it is difficult for the carrier to do so successfully. Based on the case law that exists, it would seem that carriers must prove that they could not have foreseen the blockade or chosen a different route. In the event of failure to meet that burden of proof, force majeure will not hold.In the recent road blockades in France, angry farmers forced open stationary trucks and removed goods. A reliance on force majeure will have a better chance of succeeding in connection with such cargo damage because these events are so unusual that the carrier could not take them into account beforehand. Further, there is very little one can do about them. If a truck is stuck in a traffic jam, properly locked, and the driver has not given angry demonstrators cause to storm his or her particular vehicle, he or she might be said to have taken 'any reasonably required measure'; as a result, the carrier should be able to prove circumstances beyond its control.CommentThe recent roadblocks provide food for thought. In order to recover loss and damage, operators and their insurers must send a reservation in writing to the carrier within 21 days of delivery of the goods. There is no guarantee that the carriers will subsequently be able to rely on force majeure as a defence; factors must be assessed on a case-by-case basis. Absent intent or gross negligence, carriers can rely on the relevant liability limit. Accordingly, they are liable only up to the amount of the carriage charges for loss due to delay and up to 8.33 SDR per kilogram for material damage to the consignment.So who foots the bill for loss or damage in case of delay due to roadblocks? The answer: all parties involved in the venture.For further information on this topic please contact Annemieke Spijker at AKD by telephone (+31 88 253 5000) or email ([email protected]). The AKD website can be accessed at www.akd.nl.