Updated RHA Conditions of Carriage – a more one-sided approach?

Condition 1

Two new terms have been introduced:

• Demurrage - which seeks include extra costs which members may charge as a consequence of the detention of their vehicle.
  
  Apparently these clauses were inserted to overcome the concerns of hauliers that certain larger customers (including, for example, supermarkets) were keeping vehicles waiting whilst loading slots became available. Whilst the right to charge for detention may be useful, rates will need to be agreed as it may well be difficult to show that a haulier has suffered any costs or charges from a few hours’ delay. It is unlikely that a court will simply allow a haulier to impose an arbitrary rate for such detention. Moreover, the right to charge detention doesn’t overcome the commercial difficulty faced by hauliers when dealing with such large customers. If a haulier enforces its express contractual right to charge such sums, it might find that this is the last such work it receives from some customers. An express right in the contract will not overcome that issue.
  
  

• Force majeure event – which includes a number of acts which excuse liability for the carrier. 
  
  The previous editions of the conditions imposed a strict liability on the carrier for loss or damage whilst the goods were in the carrier’s custody. The balance was then struck by imposing a list of exceptions and a limit of liability. The new conditions keep a series of exceptions and the limits of liability whilst but the strict liability has disappeared. The addition of a force majeure defence shifts the regime to a fault based liability. It will be interesting to see whether this shift in the carrier’s favour has an impact on the commerciality of the terms and indeed on a court’s assessment of their reasonableness.

Condition 4

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.

Condition 5

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.

Condition 7

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.

Condition 12

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.

Condition 15

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 [2007]. 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.