Updated RHA Conditions of Carriage – a more one-sided approach?
For many years, those involved in the road haulage industry have relied on the RHA Conditions of Carriage which, on the whole, have tried to strike a balance between protecting carriers with limits and exclusions of liability against certainty for customers using the services.
However, effective as of 1 September 2020, members of the Road Haulage Association (RHA) and insurers alike should be aware of and familiarise themselves with the key revisions to the 2020 RHA Conditions of Carriage. The new conditions adopt a somewhat different approach.
They have been drafted in a style which is clearly aimed at providing far more protection for the haulier and addressing some of the commercial issues which hauliers experience. As such, they have lost some of the balance which the earlier conditions attempted to achieve. It will be interesting to see whether such a shift in the balance of the terms impacts upon their use throughout the industry. The more one sided a set of standard terms, the less attractive they become to the party not represented by the changes.
The RHA has provided some explanatory notes and these provide a detailed explanation of the updated conditions. However, some key revisions are listed below:
Two new terms have been introduced:
This condition has been substantially revised. Under the new conditions, the carrier will not be liable for the loading or unloading of the vehicle. The condition goes a step further and states that the default position, unless agreed in writing separately, is that the customer indemnifies the carrier for loss, damage and injury which arises at loading or unloading.
It will be interesting to see how this works in practice where many hauliers are providing loading and discharging services. Some interesting arguments may arise as to whether hauliers are simply assisting in those operations (as envisaged by the conditions) or whether they are performing the loading and unloading. Moreover, it must be remembered that the haulier and the driver will bear a responsibility to check the condition and safety of the vehicle and the load. This is a non-delegable duty under the relevant road traffic legislation. That being the case, the carrier would appear to remain under the duty to stow and secure the cargo. There can be some difficult questions about the distinction between loading, stowing and securing of cargo.
The customer warrants that the cargo will not pollute the environment or harm human health if it were to escape.
The condition requires the customer to provide the carrier with all the necessary information regarding the cargo to comply with its obligations under domestic and EU legislation.
This clause defines “transit” and explains the period over which the carrier will be liable for loss or damage. Parties should note that once the carrier hands the goods over, that is the end of their responsibility.
This can have an important impact in modern contracts of carriage which are rarely now limited to simple carriage of goods. Parties often agree to certain documentary obligations and other ancillary duties which may be performed after “transit” has ended. This clause suggests that the carrier will have no liability for such obligations, regardless of the cause of the loss.
The limit of liability remains largely the same as before. In particular, the limit of £1,300 per tonne is unchanged and has indeed remained at this level for 30 years (the limit was increased to this level with the 1991 edition).
As the value of consignments increases (not just through inflation but the general nature of many consignments) this limit is increasingly losing any bearing on the consignments carried. The terms do, however, include a series of additional exclusions from liability. These include elements of loss which parties might traditionally see as being consequential loss such as, for example, loss of market, loss of profits and (expressed in terms) consequential and indirect loss. It is important to note exclusion for the loss of or corruption of data. Where carriers and their customers are often booking freight and other logistics services through integrated networks, these exclusions may become more important that initially anticipated.
The Lien has been spelt out in considerable detail. The carrier is granted both a general and a particular lien.
Of course, insofar as the carriage is subject to the CMR, the carrier must still bear in mind the decision in T Comedy v EMT . The general lien is likely to be seen as a derogation from the CMR and struck out. The latest edition of the conditions does not address this but, perhaps, a separate particular lien may be allowed to stand.
These are contractual conditions, which are undoubtedly in favour of the haulier, and must be incorporated in order to have effect. They do not have effect in default of other contract terms (as occurs in some Continental European countries which have commercial codes which apply such standard terms in default of agreement). Where members of the RHA have previously relied on the 2009 (or perhaps earlier) edition of the conditions and wish to switch to the latest version, it will be necessary to notify customers in writing of the update.