In international road transport, if the cargo is damaged or even completely lost due to, for example, theft, the default position is one of limited liability of the carrier based on the CMR treaty (hereinafter: the CMR-limit). This blog looks at this limited liability and its exceptions under Dutch law. For example, if a carrier played a (significant) role in the theft of your cargo. In that case, you have a problem: how can you recover the value of the cargo? That question is addressed here. We discuss the recent developments within case law where a plea based on the CMR limit was rejected.
For a long time, a strict application of the CMR limitation on for example theft prevailed in the Netherlands. This meant that the cargo interest had to prove that the carrier had intent to steal the cargo, or that it acted deliberately recklessly, equivalent to acting with intent. Intent meant that the carrier acted knowingly and willingly: he intended to steal the cargo and did so. Equivalent fault (in the Netherlands: deliberate recklessness) exists when the carrier behaves in such a way that he must be aware that damage may occur as a result of his actions, he is aware that the probability of damage is considerably higher than the probability of no damage occurring, while this does not prevent him from that (reckless) behaviour. This was a very high threshold, because in the vast majority of cases, proof of intent or deliberate recklessness was almost impossible to give. The cargo stakeholder (often the principal) had to prove that the carrier's conduct made it significantly more likely that the theft would occur than would otherwise be the case. Moreover, the cargo stakeholder had to prove that the driver actually knew at the time of his conduct that things would go wrong. Even in cases where the carrier deliberately and systematically ignores clear security instructions - making theft possible - this threshold was still not met, allowing the carrier to still invoke the CMR limit. For the carrier, reliance on the CMR limit was pretty much guaranteed in Dutch proceedings, but the courts seem to want to partially backtrack on that recently.
We will discuss the current state of case law using three recent examples. The first example concerns a case where the carrier is involved in the theft. In the second example, the carrier does not fulfil its legal obligation to substantiate its defence in the proceeding, and in the last case, the carrier engages a thief.
1 | Carrier involved in theft
After a transport, the (valuable) electronics cargo was found to be missing. According to the client, it was clear that the carrier's drivers were involved in the thefts. Indeed, the drivers confessed this to the police and were criminally prosecuted for it. The court concludes that the drivers had intent to commit the thefts. Therefore, the carrier is not entitled to invoke the CMR limit and has unlimited liability.
2 | Carrier does not provide sufficient justification
In the second case, seven pallets of electronics were stolen and exchanged for a cargo of titanium dioxide, a substance mainly used in paint, which caused damage to the remaining three pallets in the truck. In the proceedings, the carrier first argues - contradicting the principal's contention - that the cargo was never unloaded intermediately to make way for the titanium dioxide. According to him, the electronics and the substance had been loaded simultaneously. The court rejects this argument at once. The principal was able to prove with documents that the cargo was indeed loaded in two stages. Moreover, camera footage showed that the trailer of the truck the carrier used was completely full after loading the pallets. Thus, there was no more room for the titanium dioxide. The carrier then argued that it was up to its principal to prove that its drivers had acted intentionally or knowingly recklessly. This could not be proved. Nevertheless, the court ruled that the carrier could not claim the limited liability in the CMR Convention: in the event that a claim of intentional or deliberate recklessness is made, an aggravated duty of motivation applies to the carrier. He cannot then suffice with silence, but is obliged to disclose as much as possible. In any case, he must provide substantiated and documented evidence of the probable cause of the loss of the cargo, which, after all, took place within the domain of the carrier. In doing so, the court did not adopt a reversal of the burden of proof, but still accommodated the principal. On appeal, this judgment was upheld. Thus, the court of appeal also agreed with this approach.
3 | Carrier engages thief
The third example involves a client engaging a transport company (the first carrier), which in turn instructs another carrier to actually transport (the actual carrier). The actual carrier accepts the order and the cargo subsequently disappears into thin air. The principal then appeals to the first carrier. He is liable "as if it were his own acts [for the] acts of [...] whom he employs to effect the carriage", i.e. the actual carrier (article 3 CMR). The court accepted this argument. Moreover, an appeal by the actual carrier to spread the damage over the whole link is rejected. The actual carrier must therefore compensate the full amount of damage.
We have seen that, until recently, a carrier's reliance on the CMR limit was almost tantamount to a judgment in its favour, but this has now changed. Especially in cases where the carrier itself has had a hand in the theft, has not been open about the information available to him, or when he has engaged the actual thief, lower courts are deviating from the previous line in jurisprudence when it comes to the CMR limit and are ruling increasingly in favour of full liability for damages. This is more in line with the countries around us than before. It also now seems clear that when the CMR limit is invoked, one cannot patiently sit on one's hands and wait to see how the other party breaks down on the proof hurdle of intentional/deliberate recklessness. These are good moves to curb unjust limitations on the amount of damages to be compensated.
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