Part 2: Corona virus and liability implications for the transport sector
In the first part of this blog we looked at the liability regime in case of delays under the CMR and national law. We also touched on the possible escape from this regime by invoking force majeure. In this part we will elaborate on the latter.
A translation to the current situation provides the following picture. On the one hand, the carrier will have to prove that there are certain unavoidable circumstances. These circumstances include the unforeseeable occurrence of the corona virus and the ensuing consequences and measures thereof.
Secondly, the carrier will have to prove that, as a diligent carrier, he has taken the measures reasonably required to prevent the damage. It cannot be ruled out that the necessary legal and factual discussions may arise in this respect. After all, when has the carrier complied with this? Should a diligent carrier take into account increasing waiting times or even the possibility that he will be confronted with closed borders? In this respect the question can be asked, for example, to what extent the carrier can be required to adjust the transport to the latest reports and developments regarding government measures. For example, a carrier can avoid in advance certain routes and border crossings that are known to cause significant delays. If a carrier does not or insufficiently take these aspects into account, it may be considered that the delay damage should be for his own account.
In my opinion, the situation is different if, during transport, the carrier is suddenly confronted – even for these times – with unforeseeable measures or circumstances leading to the delay damage. Think of a carrier that arrives at a border crossing and at the same time the government of that country unexpectedly decides, contrary to earlier reports, to close that border crossing. Or the situation in which the carrier almost arrives at its destination and is confronted with unforeseen measures or circumstances that prevent it from delivering the goods. An successful appeal to force majeure via the CMR or the law is more likely in these cases.
Liability carrier: a pig in a poke?
But if the carrier is liable, then that liability is limited to the freight rate (International) and twice the freight rate (National), respectively. The carrier therefore enjoys considerable protection. It is only possible to evade this protection in case of intent or deliberate recklessness (ex article 29 CMR). The chance of this succeeding in the Netherlands is small.
Other escape possibilities
General terms and conditions
In the foregoing attention has been drawn to the CMR’s force majeure clause and the law. In practice, however, it is customary for (the general terms and conditions of) contracts to also provide for force majeure. Not infrequently, specific arrangements are made for the outbreak of a pandemic. Force majeure in that situation may or may not be excluded. This differs from case to case. Wolfs Advocaten will soon make a blog about this in relation to AVC / LSV 2014 and Fenex.
Unforeseen circumstances
There are also two legal lifebuoys. Under special circumstances it is possible to invoke article 6:258 of the Dutch Civil Code. By invoking this article, the court can – in brief – change the consequences of an agreement or dissolve it in whole or in part due to unforeseen circumstances.
Reasonableness and fairness
Finally, after invoking article 6:248 of the Dutch Civil Code, the court may disapply (parts of) the contract, insofar as this would be unacceptable in the given circumstances according to standards of reasonableness and fairness. However, both provisions must be applied cautiously by the court.
Advice needed?
Do you have questions on this subject or do you need advice? Feel free to contact one of our lawyers, such as Arsen Mukuchian, author of this blog, Lotte Oostdam or John Wolfs.
March 24, 2020
Contributing Advisors
