Article 29 of the CMR - wilful misconduct; a handy reminder

If wilful misconduct is established in accordance with Article 29 of the CMR, the carrier cannot rely on the limits of liability in Article 23 of the CMR.

Background

Article 29 of the CMR provides:

1. "The carrier shall not be entitled to avail himself of the provisions of this chapter which exclude or limit his liability or which shift the burden of proof if the damage was caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court or tribunal seized of the case, is considered as equivalent to wilful misconduct”.

While each case must be considered on its own facts, it is not, on the whole, easy to break limits using Article 29 in England. 

Whether a party can establish wilful misconduct has very serious consequences when, for example, we are dealing with lightweight valuable goods; the carrier would be able to limit their liability to negligible amounts if they can rely on the limits of the CMR.

Express delivery instructions  

One of the areas we are often asked to consider is whether ignoring express delivery instructions can amount to wilful misconduct. This goes hand in hand with the driver’s choice of a parking spot when resting or parking overnight. 

This is particularly relevant in the current climate where it is estimated that thefts whilst being shipped by road are expected to cost the economy in excess of £500 million per year. One compelling factor is the cost of living crisis which has resulted in an increase in people turning to sometimes unlawful means to make extra money.

Hauliers are also making savings, such as: cutting expenditure allowed for paid parking facilities that may have added security; cutting down on the requirement for two drivers for high value goods; or even using cheaper security measures, such as not purchasing padlocks for vehicle doors.   

English courts' approach

It is useful to revisit the authorities on wilful misconduct to remind insurers and insureds of the potential exposure when carrying goods under the CMR. 

In the case of Laceys Footwear (Wholesale) Ltd v Bowler International Freight Ltd & Anor [1997] the English Court of Appeal considered that an important circumstance when assessing wilful misconduct would be a deliberate disregard of express instructions clearly given and understood. The defendant failed to comply with delivery instructions, resulting in the vehicle being diverted. The defendant could not limit its liability by virtue of the Convention.

The disregard of instructions was also considered in Thomas Cook v Air Malta [1997] where the judge referred to the Laceys case and stated:

“In my judgment, it was open to the Judge to rule that by disobeying clear instructions and departing so far from the ordinary duty and responsibility of a driver to protect his load, the actions of Mr. Rojo amounted to misconduct”.

Comment

The supply chain is, and always has been, vulnerable to theft.  However, this is particularly more so in the current climate where individuals’ and companies’ profit margins are been squeezed. Thefts can range from small scale instances of pilferage by drivers and warehouse staff to larger, more organised theft, such as the release of goods by deception. 

It is important that hauliers and their insurers understand the potential consequences of cutting costs in security practices, as a haulier could find themselves on the end of a wilful misconduct claim with no ability to limit its liability.  It is also important to note that the situation is not assisted by the fact that, as estimated by the RHA, 11,000 additional safe and secure parking spaces are needed to prevent drivers being forced onto unsafe lay-bys overnight.

Hauliers should keep in mind that many freight liability policies may only provide cover up to the limits stipulated in the CMR, rather than the full liability if found guilty of wilful misconduct.