According to a resolution of the Polish Supreme Court dated 20 January 2022, III CZP 9/22, the perpetrator of a traffic accident and the insurance company - with which the perpetrator of the accident is bound by a contract on insurance of civil liability of motor vehicle holders for damage connected with the movement of such vehicles - shall be liable towards the road administrator for damage caused by contamination of the road with motor vehicle fluids.
In the practice of the Law Firm there are quite frequent cases in which it turns out that the transported goods have been stolen. These range from theft of goods during a driver's night-time rest, through the activities of organized criminal groups disguised as police officers, to subcontracting transport to a carrier with whom - after taking the goods - contact stops and as a result it turns out that the goods have been stolen.
In such a situation, the Ordering Party or another entity usually (for example Owner) issues a debit note to the carrier indicating that the carrier is responsible in full for the stolen goods.
In such a situation, the carrier should first examine whether the entity claiming compensation is entitled to claim compensation at all. Moreover, the carrier should report the damage to its insurer and without its consent should not submit any declarations of possible payments.
Subsequently, the carrier should examine its liability, i.e. whether it is liable for the damage at all and, if so, to what extent.
According to Article 17 (1) of the CMR Convention, the carrier is liable for the total or partial loss of the goods or for damage to them occurring between the time of acceptance of the goods and their delivery, as well as for delay in delivery (Article 17 of the CMR Convention). In the light of Article 3 of the CMR Convention, the carrier is liable for the acts and omissions of its employees and other carriers to whom it commissions the carriage, as for its own acts and omissions (Article 3 of the CMR Convention). Thus, there is a risk that the court, in any proceedings, will find that a driver who, for example, has parked in an unguarded car park or a dishonest cheat carrier who has stolen the goods is liable as for his own actions.
The carrier can evade liability only in situations strictly defined by law. According to Article 17 (2) of the CMR Convention, the carrier is exempted from liability, inter alia, if the loss of the goods was caused by circumstances which the carrier could not avoid and the consequences of which he was unable to prevent. It is up to the carrier to prove that the theft in question could not have been avoided (demonstrating, for example, that the driver parked the vehicle in a guarded car park, that the vehicle was adequately protected against theft and that there were two drivers in the vehicle to ensure better protection of the cargo). The court should then assess whether a specific event (theft, robbery) is a circumstance which the carrier could not avoid and the consequences of which he was unable to prevent. The Law Firm's experience shows that courts most often assume that cargo theft is a fairly common phenomenon, and thus one that can be predicted. Hence, proving the circumstances exempting from liability is very difficult, often even impossible.
Persons claiming compensation from the carrier most often claim it in full, citing the provisions of Article 29 of the CMR Convention, and thus the carrier's malicious intent or gross negligence (or, alternatively, the carrier's employees or any other person to whom the carrier refers for the performance of the carriage, if those employees or other persons act in the performance of their duties). In this regard, the carrier must also be aware of the need to defend himself. The carrier must also verify the amount of the loss reported and the evidence adduced to prove its existence and amount.
In case of theft, a properly formulated insurance policy proves useful for the carrier. It is therefore worth ensuring that it contains appropriate provisions to protect the carrier in the event of such situations. Policies often exclude the insurer's liability in such cases, which carriers discover only after the occurrence of an unpleasant event. Policies often also specify specific requirements to be met by carrier in order to protect cargo against theft. Failure to adapt to the required action is often combined with a refusal to pay compensation.
In the event of theft, the carrier should take appropriate defense, because it is not always the entitled persons who make claims (it often happens that claims are made by several different entities), the method of proving the damage is not always correct, the carrier can defend itself with a high degree of diligence in its actions, invoking the lack or at least limitation of its liability.
Ewa Kosowska-Czapla
Attorney-at-Law / Bankruptcy Adviser
The demand of the Orderer to submit carrier’s liability insurance in the international carriage which would the events specified in Article 29 of the CMR Convention.
One of our clients working for the transport industry has recently mentioned to us that his foreign contractors ask him increasingly more often if his carrier’s liability insurance for international carriage covers the liability for events specified in Article 29 of the CMR Convention.
According to the CMR convention, the carrier may in certain situations limit his liability, or the burden of proof is shifted in favour of the carrier, or the liability of the carrier may in some situations be excluded completely.
However, Article 29 forbids the carrier to avail himself of these convenient provisions. In some situations the carrier will always be held liable. It will happen when the damage occurred as a result of the wilful misconduct of the carrier (or by the agents or servants of the carrier or by any other persons of whose services he makes use for the performance of the carriage ) or default.
Insurance companies frequently refuse to pay the compensation quoting Article 29 of the Convention. They demonstrate that compensation may not be paid as given action was an instance of gross negligence.
General liability insurance does not require the insurance company to be held liable in this case. The insurers may only voluntarily take liability for such situations. In some insurance companies there is a possibility to include in the policy this type of situation, e.g. for an additional fee.
Therefore it is very important for the carrier whether his subcontractor has such an insurance. Our client also could ask his subcontractors about it as he is responsible for their actions. If it transpires that a subcontractor is liable because of his gross negligence (e.g. his driver parked the vehicle on an unguarded parking lot) and a damage occurred, then our Client will be liable for it jointly and severally. He may demand the payment of this amount directly from the subcontractor, but when the subcontractor is not insured against it and does not have the required amount, our client will not be able to enforce him to pay.
Often when the subcontractor is not insured in this respect, the carrier concludes a supplementary insurance contract, which means that the freight will have to take into account the cost of this supplementary contract.
Ewa Kosowska-Czapla
Attorney at law
Excessive conventional penalty for failure to send carriage documents within a specified period of time.
Our Office has recently analysed the principles of stipulating conventional penalties in transport orders. It happens quite often that Orderers stipulate high conventional penalties for failing to send carriage documents on time.
Liability for damages is not provided in the CMR Convention in the case when carriage documents were send too late, and when the conflict of law rules provide that the norms of Polish law shall apply in such situations, the contract will be assessed with the consideration of the provisions of Polish Civil Code.
As is stated in Article 483 § 1 of Polish Civil Code, one may stipulate in the contract that the damages resultant from failure to perform or from inadequate performance of a non-pecuniary obligation shall be redressed by the payment of a specified amount of money (the conventional penalty).
There is an opinion in the jurisdiction that when applying Article 483 § 1, one takes into consideration the legal character of those obligations (pecuniary or non-pecuniary) which belong to essentialia negotii, and not additional obligations (see the judgement of the Supreme Court of 19 December 2000, V CKN 171/100). Sending carriage and settlement documents is a secondary, not the main, aspect of performing the carriage contract. That is why stipulating in the contract a permanent and excessive conventional penalty (Article 484 § 2 Civil Code) which depends on the secondary obligation of sending the carriage documents on time should be deemed inadmissible.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention provides carrier’s liability also for a delay in the delivery.
Firstly, one must answer the question of what a delay is. According to Article 19 of the CMR Convention, a delay in delivery is said to occur when the goods have not been delivered within the agreed time-limit or when, failing an agreed time-limit, the actual duration of the carriage having regard to the circumstances of the case, and in particular, in the case of partial loads, the time required for making up a complete load in the normal way, exceeds the time it would be reasonable to allow a diligent carrier. Most commonly contracts for carriage specify exactly the time-limit of the delivery. The only problem that may occur is at the moment of handing over the goods. One should ascertain that an exact time and date of the delivery is entered into the consignment note. Proving that a delay in delivery has occurred is, however, insufficient to make a claim for compensation.
According to Article 23 point 5 of the Convention, if the claimant proves that damage has resulted from a delay in delivery, the carrier is obliged to pay compensation for such damage but not exceeding the carriage charges. In other words, compensation for a delay in delivery is payable only when a damage has occurred and also it is necessary for the claimant to prove that the damage has taken place. It happens every so often that despite the delay in delivery that the person commissioning the carriage receives full payment from his contractor and then proceeds to make claims for compensation against his subcontractor who has actually performed the carriage. In such situation one should require the damage to be proved by the claimant. The amount of the compensation has been limited to the amount of carriage charges.
By virtue of Article 30 point 3 of the Convention, no compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within twenty-one days from the time that the goods were placed at the disposal of the consignee. Ipso facto, in order to vindicate the claim, the claimant will have to prove not only that he has sent a reservation concerning the delay in writing, but also that he has kept the time limit specified by the Convention.
Ewa Kosowska-Czapla
Attorney at law
According to the provisions of the CMR Convention (which regulates international carriage of goods by road), the carrier is liable for the following:
The provisions of the Convention provide the possibility to limit the amount of compensation in case the liability of the carrier has already been established.
The carrier should be aware what (compensation) risk is involved in any given carriage. Knowing the risk may help to adapt the amount of freight and to ensure that he has appropriate insurance.
Total or partial loss of goods
If the carrier is liable for compensation in respect of total or partial loss of goods, the compensation is calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. In general, the market value of the goods at the place of accepting them is adapted. The value of goods is established according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to normal value of goods of the same kind and quality. Hence the amount of compensation may mot exceed the market value of goods.
Moreover, the CMR Convention provides quota limitation for compensation and the measure of compensation is the gross weight of the goods.
In addition, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in case of total loss and in proportion to the loss sustained in case of partial loss. Regarding other charges, there are discrepancies whether claims could be made to recover them (e.g. the costs of expert reports, return carriage, rescue action, cleaning, storage, disposal of goods, VAT. etc.).
The damage of the goods
In case of damage, the carrier shall be liable for the amount by which the goods have diminished in value, calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. To establish how much the goods have diminished in value, market prices are crucial. Therefore the price level after the goods have been damaged requires to be examined. Some claimants repair the goods and indicate the repair costs as the diminution in value; however, the repair costs will not always reflect the diminution in value and may be challenged as excessive.
Aside from the above, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of partial loss.
The compensation may not, however, exceed:
The delay of the delivery
In the case of delay, the compensation shall not exceed the carriage charges (Article 23 of the CMR Convention).
If the delay was connected to a damage of the goods, the compensation limits concerning the liability for the damage of the goods are applicable (see above), as the limit for delay, i.e. the amount of carriage charges, would in such cases be inappropriate. It is accepted that in the case of delay and the damage of the goods, one can cumulate the compensation for the damage of the goods and the compensation for the delay.
Interest
Apart from the duties mentioned above, a claimant is be entitled to claim interest on compensation payable. Such interest, calculated at 5% per annum, may accrue from the date on which the claim was sent in writing to the carrier or, if no such claim has been made, from the date on which legal proceedings were instituted.
The option to claim compensation exceeding the limits
There are three situations in which one may claim higher compensation from the carrier:
Declaration of the value of the goods
According to the provisions of the CMR Convention, the sender may, against payment of a surcharge to be agreed upon, declare in the consignment note a value for the goods exceeding the limit laid down in previous points, and in that case the amount of the declared value shall be substituted for the limit specified by the CMR Convention. There are thus two significant issues: firstly, the value must be entered into the consignment note and secondly, the sender must pay a surcharge. These conditions, however, are not always strictly observed. Regarding the entry to the consignment note, it is not always deemed necessary, it suffices that one is able to prove that the value of the goods has been declared in writing. And regarding the surcharge, it is often accepted that the surcharge is included in the carriage charges.
Declaration of a special interest in delivery
The sender may, against payment of a surcharge to be agreed upon, fix the amount of a special interest in delivery in the case of loss or damage or of the agreed time-limit being exceeded, by entering such amount in the consignment note. Then the sender may, independently of the compensation calculated as above, claim additional compensation, up to the total amount of the interest declared. However, the burden of proof that the damage has been done is on the sender. As was the case with declaring the value of the goods, the conditions that the special interest should be entered into a consignment note and a surcharge be paid are not always strictly observed.
Wilful misconduct or default
The issue of a wilful misconduct or default committed by the carrier or the agents of the carrier or by any other persons of whose services he makes use for the performance of the carriage, when they are acting within the scope of their employment, is an issue which requires a separate discussion as it exceeds the scope of this topic.
It is also important that said limits may be quoted also by subcontracting carriers, against whom e.g. the sender may claim compensation based on the principles of extra-contractual liability (that is, not the contract of carriage as he is not bound by it with the subcontractor and on the basis of which he could not claim compensation, but by virtue of e.g. a prohibited act).
Incidentally, it is worth mentioning that some carriers try to make contracts more favourable for them, including therein provisions stating that their liability is lower than the lower limits laid down in the CMR Convention. Nevertheless, in view of the fact that the provisions of the Convention are mandatory, such contractual provisions will be deemed null and void.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention is an international agreement signed in Geneva in 1956 (ratified by Poland in 1962) which regulates issues of international carriage of goods by road. This means that in some situations transport services provided by a Polish carrier may fall within the scope of this convention. Simply put, if a carriage of goods by road for reward is conducted from Poland to another state or to Poland from another state, then the provision of this conventions are applicable.
The provisions of the CMR Convention are of mandatory character. This means that the content of a transport order to perform an international carriage of goods cannot contradict this Convention. Should there be any such provisions in a contract, they will be null and void. Any persons wronged by such a contract may effectively defend themselves by quoting the provisions of the CMR Convention. In my other articles I have discussed the liability of a carrier for a delay in delivery (...), compensation limits concerning claims against a carrier for a delay in delivery or for loss of the goods and for damage thereto (...), and other issues. Even if these issues have been otherwise regulated in the transport order, the provisions of the CMR Convention are applicable in this respect.
The transport order is usually sent in the form of telefax message or electronic mail. The CMR Convention does not specify what form a transport order should take therefore the abovementioned are admissible. The sender and the carrier are parties to the contract. However, as the practice shows, the carrier often acts as the sender and a subcontractor is a carrier as he in fact performs the carriage. Ipso facto, the provisions of the CMR Convention are also applicable for a contract between a carrier and a subcontractor.
The Convention regulates, among others, the following issues:
If one would want to know in detail under what conditions the order must be performed and what should happen if the completion is not what has been agreed, it is worth to verify it with the CMR Convention.
Ewa Kosowska-Czapla
Attorney at law
In real life, the carriage order is increasingly more commonly performed not by a person accepting the order but by a carrier (who actually performs the carriage) with whom this person has a separate carriage order.
According to Article 3 of the CMR Convention, the carrier is responsible for the acts or omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own. Therefore, the carrier is responsible for subcontractor’s actions as if they were his own and the carrier cannot exclude his liability by showing the sender that it is a subcontractor who is liable for a damage to the goods or for a delay.
A subcontractor is responsible before the carrier who has ordered him the carriage, and not before the sender, for failure to perform or inadequate performance of the carriage. Hence the carrier should ensure that in the case of a damage, his claims against a subcontractor are properly insured.
It is worth to remember that the period of limitation of a claim against a subcontractor is equal to the period of limitation for a sender against a carrier, that is, the same as specified in general principles. The course of the limitation period is thus not affected by a potential date of payment of the compensation to the sender by the carrier as the claim against a subcontractor is not a recourse claim. Neither is the fact that the compensation has been paid significant to establish the liability for damages of a subcontractor. The subcontractor is liable before the carrier for the mere fact that the damage occurred and not for its potential redress.
Incidentally, I would like to point out that insurance companies often refuse to pay compensation, indicating that the carriage has been performed not by the insured party but by a subcontractor. It is worth therefore to ensure when signing an insurance policy that the insurance company expressly states that this policy covers also the liability for any subcontractor or that they at least do not exclude such liability.
Ewa Kosowska-Czapla
Attorney at law
It happens often in the practice of our Office that our Client is convinced that he or she has concluded a forwarding contract but this conviction is not always correct. In particular, the use of other firms while performing the order is not a sufficient condition to recognise oneself as a forwarder.
Whether a contract is a contract of carriage or a forwarding contract is of crucial importance. First of all, the liability for irregularities in carriage is different in both situations. Within the scope of Polish law, the forwarder is liable for the fault in choosing and therefore if he chose the carrier with due diligence, he is not liable for the carrier’s actions or default. By contrast, an international carrier employing a subcontractor will always be liable for their actions or default as for their own. In terms of the amount of compensation, with respect to a forwarding contract, the amount of compensation corresponds to the ordinary value of the goods. On the other hand, an international carrier by road may refer to the compensation limits laid down in the CMR Convention which are related to the weight of the goods (I have discussed this issue in detail in my previous article). If the forwarder performs the carriage himself, he has all the rights and obligations of a carrier.
The type of the contract – whether it is a contract for carriage or a forwarding contract – is determined, unfortunately, not by its title but most of all by its character (the obligations of the parties).
As the Regional Court in Szczecin showed in its verdict of 8 March 2013, file number VIII Ga 31/13, the essence of a forwarding contract is not the performance of a contract but only its organisation, including sending and receiving the goods, and performing other actions connected to the carriage. Such services are, therefore, professional assistance in handling the carriage (see the judgement of the Supreme Court of 18 January 1973, I CR 566/70, OSNC 1971/9/157).
The following questions may prove helpful when establishing if we deal with carriage or with forwarding:
Is the order limited to performing the carriage or does the scope of duties also include additional activities beyond the carriage and which could be recognised as forwarding services?
Has the transport order referred to the provisions of the CMR Convention?
Has one of the parties expressly stated when concluding the contract that they are forwarders and not carriers (when the order covers the carriage of goods and not the conclusion of a contract with another party)?
Has the payment been established in the form of freight or have there been any other components of the remuneration for performing the forwarding activities?
In case it is established that the concluded contracts are in fact contracts for carriage and not forwarding contracts, it is advisable to ensure one has carrier’s liability insurance, as the forwarder’s liability insurance does not fully protect the interest of the firm.
Ewa Kosowska-Czapla
Attorney-at-law
According to a resolution of the Polish Supreme Court dated 20 January 2022, III CZP 9/22, the perpetrator of a traffic accident and the insurance company - with which the perpetrator of the accident is bound by a contract on insurance of civil liability of motor vehicle holders for damage connected with the movement of such vehicles - shall be liable towards the road administrator for damage caused by contamination of the road with motor vehicle fluids.
In the practice of the Law Firm there are quite frequent cases in which it turns out that the transported goods have been stolen. These range from theft of goods during a driver's night-time rest, through the activities of organized criminal groups disguised as police officers, to subcontracting transport to a carrier with whom - after taking the goods - contact stops and as a result it turns out that the goods have been stolen.
In such a situation, the Ordering Party or another entity usually (for example Owner) issues a debit note to the carrier indicating that the carrier is responsible in full for the stolen goods.
In such a situation, the carrier should first examine whether the entity claiming compensation is entitled to claim compensation at all. Moreover, the carrier should report the damage to its insurer and without its consent should not submit any declarations of possible payments.
Subsequently, the carrier should examine its liability, i.e. whether it is liable for the damage at all and, if so, to what extent.
According to Article 17 (1) of the CMR Convention, the carrier is liable for the total or partial loss of the goods or for damage to them occurring between the time of acceptance of the goods and their delivery, as well as for delay in delivery (Article 17 of the CMR Convention). In the light of Article 3 of the CMR Convention, the carrier is liable for the acts and omissions of its employees and other carriers to whom it commissions the carriage, as for its own acts and omissions (Article 3 of the CMR Convention). Thus, there is a risk that the court, in any proceedings, will find that a driver who, for example, has parked in an unguarded car park or a dishonest cheat carrier who has stolen the goods is liable as for his own actions.
The carrier can evade liability only in situations strictly defined by law. According to Article 17 (2) of the CMR Convention, the carrier is exempted from liability, inter alia, if the loss of the goods was caused by circumstances which the carrier could not avoid and the consequences of which he was unable to prevent. It is up to the carrier to prove that the theft in question could not have been avoided (demonstrating, for example, that the driver parked the vehicle in a guarded car park, that the vehicle was adequately protected against theft and that there were two drivers in the vehicle to ensure better protection of the cargo). The court should then assess whether a specific event (theft, robbery) is a circumstance which the carrier could not avoid and the consequences of which he was unable to prevent. The Law Firm's experience shows that courts most often assume that cargo theft is a fairly common phenomenon, and thus one that can be predicted. Hence, proving the circumstances exempting from liability is very difficult, often even impossible.
Persons claiming compensation from the carrier most often claim it in full, citing the provisions of Article 29 of the CMR Convention, and thus the carrier's malicious intent or gross negligence (or, alternatively, the carrier's employees or any other person to whom the carrier refers for the performance of the carriage, if those employees or other persons act in the performance of their duties). In this regard, the carrier must also be aware of the need to defend himself. The carrier must also verify the amount of the loss reported and the evidence adduced to prove its existence and amount.
In case of theft, a properly formulated insurance policy proves useful for the carrier. It is therefore worth ensuring that it contains appropriate provisions to protect the carrier in the event of such situations. Policies often exclude the insurer's liability in such cases, which carriers discover only after the occurrence of an unpleasant event. Policies often also specify specific requirements to be met by carrier in order to protect cargo against theft. Failure to adapt to the required action is often combined with a refusal to pay compensation.
In the event of theft, the carrier should take appropriate defense, because it is not always the entitled persons who make claims (it often happens that claims are made by several different entities), the method of proving the damage is not always correct, the carrier can defend itself with a high degree of diligence in its actions, invoking the lack or at least limitation of its liability.
Ewa Kosowska-Czapla
Attorney-at-Law / Bankruptcy Adviser
The demand of the Orderer to submit carrier’s liability insurance in the international carriage which would the events specified in Article 29 of the CMR Convention.
One of our clients working for the transport industry has recently mentioned to us that his foreign contractors ask him increasingly more often if his carrier’s liability insurance for international carriage covers the liability for events specified in Article 29 of the CMR Convention.
According to the CMR convention, the carrier may in certain situations limit his liability, or the burden of proof is shifted in favour of the carrier, or the liability of the carrier may in some situations be excluded completely.
However, Article 29 forbids the carrier to avail himself of these convenient provisions. In some situations the carrier will always be held liable. It will happen when the damage occurred as a result of the wilful misconduct of the carrier (or by the agents or servants of the carrier or by any other persons of whose services he makes use for the performance of the carriage ) or default.
Insurance companies frequently refuse to pay the compensation quoting Article 29 of the Convention. They demonstrate that compensation may not be paid as given action was an instance of gross negligence.
General liability insurance does not require the insurance company to be held liable in this case. The insurers may only voluntarily take liability for such situations. In some insurance companies there is a possibility to include in the policy this type of situation, e.g. for an additional fee.
Therefore it is very important for the carrier whether his subcontractor has such an insurance. Our client also could ask his subcontractors about it as he is responsible for their actions. If it transpires that a subcontractor is liable because of his gross negligence (e.g. his driver parked the vehicle on an unguarded parking lot) and a damage occurred, then our Client will be liable for it jointly and severally. He may demand the payment of this amount directly from the subcontractor, but when the subcontractor is not insured against it and does not have the required amount, our client will not be able to enforce him to pay.
Often when the subcontractor is not insured in this respect, the carrier concludes a supplementary insurance contract, which means that the freight will have to take into account the cost of this supplementary contract.
Ewa Kosowska-Czapla
Attorney at law
Excessive conventional penalty for failure to send carriage documents within a specified period of time.
Our Office has recently analysed the principles of stipulating conventional penalties in transport orders. It happens quite often that Orderers stipulate high conventional penalties for failing to send carriage documents on time.
Liability for damages is not provided in the CMR Convention in the case when carriage documents were send too late, and when the conflict of law rules provide that the norms of Polish law shall apply in such situations, the contract will be assessed with the consideration of the provisions of Polish Civil Code.
As is stated in Article 483 § 1 of Polish Civil Code, one may stipulate in the contract that the damages resultant from failure to perform or from inadequate performance of a non-pecuniary obligation shall be redressed by the payment of a specified amount of money (the conventional penalty).
There is an opinion in the jurisdiction that when applying Article 483 § 1, one takes into consideration the legal character of those obligations (pecuniary or non-pecuniary) which belong to essentialia negotii, and not additional obligations (see the judgement of the Supreme Court of 19 December 2000, V CKN 171/100). Sending carriage and settlement documents is a secondary, not the main, aspect of performing the carriage contract. That is why stipulating in the contract a permanent and excessive conventional penalty (Article 484 § 2 Civil Code) which depends on the secondary obligation of sending the carriage documents on time should be deemed inadmissible.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention provides carrier’s liability also for a delay in the delivery.
Firstly, one must answer the question of what a delay is. According to Article 19 of the CMR Convention, a delay in delivery is said to occur when the goods have not been delivered within the agreed time-limit or when, failing an agreed time-limit, the actual duration of the carriage having regard to the circumstances of the case, and in particular, in the case of partial loads, the time required for making up a complete load in the normal way, exceeds the time it would be reasonable to allow a diligent carrier. Most commonly contracts for carriage specify exactly the time-limit of the delivery. The only problem that may occur is at the moment of handing over the goods. One should ascertain that an exact time and date of the delivery is entered into the consignment note. Proving that a delay in delivery has occurred is, however, insufficient to make a claim for compensation.
According to Article 23 point 5 of the Convention, if the claimant proves that damage has resulted from a delay in delivery, the carrier is obliged to pay compensation for such damage but not exceeding the carriage charges. In other words, compensation for a delay in delivery is payable only when a damage has occurred and also it is necessary for the claimant to prove that the damage has taken place. It happens every so often that despite the delay in delivery that the person commissioning the carriage receives full payment from his contractor and then proceeds to make claims for compensation against his subcontractor who has actually performed the carriage. In such situation one should require the damage to be proved by the claimant. The amount of the compensation has been limited to the amount of carriage charges.
By virtue of Article 30 point 3 of the Convention, no compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within twenty-one days from the time that the goods were placed at the disposal of the consignee. Ipso facto, in order to vindicate the claim, the claimant will have to prove not only that he has sent a reservation concerning the delay in writing, but also that he has kept the time limit specified by the Convention.
Ewa Kosowska-Czapla
Attorney at law
According to the provisions of the CMR Convention (which regulates international carriage of goods by road), the carrier is liable for the following:
The provisions of the Convention provide the possibility to limit the amount of compensation in case the liability of the carrier has already been established.
The carrier should be aware what (compensation) risk is involved in any given carriage. Knowing the risk may help to adapt the amount of freight and to ensure that he has appropriate insurance.
Total or partial loss of goods
If the carrier is liable for compensation in respect of total or partial loss of goods, the compensation is calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. In general, the market value of the goods at the place of accepting them is adapted. The value of goods is established according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to normal value of goods of the same kind and quality. Hence the amount of compensation may mot exceed the market value of goods.
Moreover, the CMR Convention provides quota limitation for compensation and the measure of compensation is the gross weight of the goods.
In addition, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in case of total loss and in proportion to the loss sustained in case of partial loss. Regarding other charges, there are discrepancies whether claims could be made to recover them (e.g. the costs of expert reports, return carriage, rescue action, cleaning, storage, disposal of goods, VAT. etc.).
The damage of the goods
In case of damage, the carrier shall be liable for the amount by which the goods have diminished in value, calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. To establish how much the goods have diminished in value, market prices are crucial. Therefore the price level after the goods have been damaged requires to be examined. Some claimants repair the goods and indicate the repair costs as the diminution in value; however, the repair costs will not always reflect the diminution in value and may be challenged as excessive.
Aside from the above, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of partial loss.
The compensation may not, however, exceed:
The delay of the delivery
In the case of delay, the compensation shall not exceed the carriage charges (Article 23 of the CMR Convention).
If the delay was connected to a damage of the goods, the compensation limits concerning the liability for the damage of the goods are applicable (see above), as the limit for delay, i.e. the amount of carriage charges, would in such cases be inappropriate. It is accepted that in the case of delay and the damage of the goods, one can cumulate the compensation for the damage of the goods and the compensation for the delay.
Interest
Apart from the duties mentioned above, a claimant is be entitled to claim interest on compensation payable. Such interest, calculated at 5% per annum, may accrue from the date on which the claim was sent in writing to the carrier or, if no such claim has been made, from the date on which legal proceedings were instituted.
The option to claim compensation exceeding the limits
There are three situations in which one may claim higher compensation from the carrier:
Declaration of the value of the goods
According to the provisions of the CMR Convention, the sender may, against payment of a surcharge to be agreed upon, declare in the consignment note a value for the goods exceeding the limit laid down in previous points, and in that case the amount of the declared value shall be substituted for the limit specified by the CMR Convention. There are thus two significant issues: firstly, the value must be entered into the consignment note and secondly, the sender must pay a surcharge. These conditions, however, are not always strictly observed. Regarding the entry to the consignment note, it is not always deemed necessary, it suffices that one is able to prove that the value of the goods has been declared in writing. And regarding the surcharge, it is often accepted that the surcharge is included in the carriage charges.
Declaration of a special interest in delivery
The sender may, against payment of a surcharge to be agreed upon, fix the amount of a special interest in delivery in the case of loss or damage or of the agreed time-limit being exceeded, by entering such amount in the consignment note. Then the sender may, independently of the compensation calculated as above, claim additional compensation, up to the total amount of the interest declared. However, the burden of proof that the damage has been done is on the sender. As was the case with declaring the value of the goods, the conditions that the special interest should be entered into a consignment note and a surcharge be paid are not always strictly observed.
Wilful misconduct or default
The issue of a wilful misconduct or default committed by the carrier or the agents of the carrier or by any other persons of whose services he makes use for the performance of the carriage, when they are acting within the scope of their employment, is an issue which requires a separate discussion as it exceeds the scope of this topic.
It is also important that said limits may be quoted also by subcontracting carriers, against whom e.g. the sender may claim compensation based on the principles of extra-contractual liability (that is, not the contract of carriage as he is not bound by it with the subcontractor and on the basis of which he could not claim compensation, but by virtue of e.g. a prohibited act).
Incidentally, it is worth mentioning that some carriers try to make contracts more favourable for them, including therein provisions stating that their liability is lower than the lower limits laid down in the CMR Convention. Nevertheless, in view of the fact that the provisions of the Convention are mandatory, such contractual provisions will be deemed null and void.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention is an international agreement signed in Geneva in 1956 (ratified by Poland in 1962) which regulates issues of international carriage of goods by road. This means that in some situations transport services provided by a Polish carrier may fall within the scope of this convention. Simply put, if a carriage of goods by road for reward is conducted from Poland to another state or to Poland from another state, then the provision of this conventions are applicable.
The provisions of the CMR Convention are of mandatory character. This means that the content of a transport order to perform an international carriage of goods cannot contradict this Convention. Should there be any such provisions in a contract, they will be null and void. Any persons wronged by such a contract may effectively defend themselves by quoting the provisions of the CMR Convention. In my other articles I have discussed the liability of a carrier for a delay in delivery (...), compensation limits concerning claims against a carrier for a delay in delivery or for loss of the goods and for damage thereto (...), and other issues. Even if these issues have been otherwise regulated in the transport order, the provisions of the CMR Convention are applicable in this respect.
The transport order is usually sent in the form of telefax message or electronic mail. The CMR Convention does not specify what form a transport order should take therefore the abovementioned are admissible. The sender and the carrier are parties to the contract. However, as the practice shows, the carrier often acts as the sender and a subcontractor is a carrier as he in fact performs the carriage. Ipso facto, the provisions of the CMR Convention are also applicable for a contract between a carrier and a subcontractor.
The Convention regulates, among others, the following issues:
If one would want to know in detail under what conditions the order must be performed and what should happen if the completion is not what has been agreed, it is worth to verify it with the CMR Convention.
Ewa Kosowska-Czapla
Attorney at law
In real life, the carriage order is increasingly more commonly performed not by a person accepting the order but by a carrier (who actually performs the carriage) with whom this person has a separate carriage order.
According to Article 3 of the CMR Convention, the carrier is responsible for the acts or omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own. Therefore, the carrier is responsible for subcontractor’s actions as if they were his own and the carrier cannot exclude his liability by showing the sender that it is a subcontractor who is liable for a damage to the goods or for a delay.
A subcontractor is responsible before the carrier who has ordered him the carriage, and not before the sender, for failure to perform or inadequate performance of the carriage. Hence the carrier should ensure that in the case of a damage, his claims against a subcontractor are properly insured.
It is worth to remember that the period of limitation of a claim against a subcontractor is equal to the period of limitation for a sender against a carrier, that is, the same as specified in general principles. The course of the limitation period is thus not affected by a potential date of payment of the compensation to the sender by the carrier as the claim against a subcontractor is not a recourse claim. Neither is the fact that the compensation has been paid significant to establish the liability for damages of a subcontractor. The subcontractor is liable before the carrier for the mere fact that the damage occurred and not for its potential redress.
Incidentally, I would like to point out that insurance companies often refuse to pay compensation, indicating that the carriage has been performed not by the insured party but by a subcontractor. It is worth therefore to ensure when signing an insurance policy that the insurance company expressly states that this policy covers also the liability for any subcontractor or that they at least do not exclude such liability.
Ewa Kosowska-Czapla
Attorney at law
It happens often in the practice of our Office that our Client is convinced that he or she has concluded a forwarding contract but this conviction is not always correct. In particular, the use of other firms while performing the order is not a sufficient condition to recognise oneself as a forwarder.
Whether a contract is a contract of carriage or a forwarding contract is of crucial importance. First of all, the liability for irregularities in carriage is different in both situations. Within the scope of Polish law, the forwarder is liable for the fault in choosing and therefore if he chose the carrier with due diligence, he is not liable for the carrier’s actions or default. By contrast, an international carrier employing a subcontractor will always be liable for their actions or default as for their own. In terms of the amount of compensation, with respect to a forwarding contract, the amount of compensation corresponds to the ordinary value of the goods. On the other hand, an international carrier by road may refer to the compensation limits laid down in the CMR Convention which are related to the weight of the goods (I have discussed this issue in detail in my previous article). If the forwarder performs the carriage himself, he has all the rights and obligations of a carrier.
The type of the contract – whether it is a contract for carriage or a forwarding contract – is determined, unfortunately, not by its title but most of all by its character (the obligations of the parties).
As the Regional Court in Szczecin showed in its verdict of 8 March 2013, file number VIII Ga 31/13, the essence of a forwarding contract is not the performance of a contract but only its organisation, including sending and receiving the goods, and performing other actions connected to the carriage. Such services are, therefore, professional assistance in handling the carriage (see the judgement of the Supreme Court of 18 January 1973, I CR 566/70, OSNC 1971/9/157).
The following questions may prove helpful when establishing if we deal with carriage or with forwarding:
Is the order limited to performing the carriage or does the scope of duties also include additional activities beyond the carriage and which could be recognised as forwarding services?
Has the transport order referred to the provisions of the CMR Convention?
Has one of the parties expressly stated when concluding the contract that they are forwarders and not carriers (when the order covers the carriage of goods and not the conclusion of a contract with another party)?
Has the payment been established in the form of freight or have there been any other components of the remuneration for performing the forwarding activities?
In case it is established that the concluded contracts are in fact contracts for carriage and not forwarding contracts, it is advisable to ensure one has carrier’s liability insurance, as the forwarder’s liability insurance does not fully protect the interest of the firm.
Ewa Kosowska-Czapla
Attorney-at-law
According to a resolution of the Polish Supreme Court dated 20 January 2022, III CZP 9/22, the perpetrator of a traffic accident and the insurance company - with which the perpetrator of the accident is bound by a contract on insurance of civil liability of motor vehicle holders for damage connected with the movement of such vehicles - shall be liable towards the road administrator for damage caused by contamination of the road with motor vehicle fluids.
In the practice of the Law Firm there are quite frequent cases in which it turns out that the transported goods have been stolen. These range from theft of goods during a driver's night-time rest, through the activities of organized criminal groups disguised as police officers, to subcontracting transport to a carrier with whom - after taking the goods - contact stops and as a result it turns out that the goods have been stolen.
In such a situation, the Ordering Party or another entity usually (for example Owner) issues a debit note to the carrier indicating that the carrier is responsible in full for the stolen goods.
In such a situation, the carrier should first examine whether the entity claiming compensation is entitled to claim compensation at all. Moreover, the carrier should report the damage to its insurer and without its consent should not submit any declarations of possible payments.
Subsequently, the carrier should examine its liability, i.e. whether it is liable for the damage at all and, if so, to what extent.
According to Article 17 (1) of the CMR Convention, the carrier is liable for the total or partial loss of the goods or for damage to them occurring between the time of acceptance of the goods and their delivery, as well as for delay in delivery (Article 17 of the CMR Convention). In the light of Article 3 of the CMR Convention, the carrier is liable for the acts and omissions of its employees and other carriers to whom it commissions the carriage, as for its own acts and omissions (Article 3 of the CMR Convention). Thus, there is a risk that the court, in any proceedings, will find that a driver who, for example, has parked in an unguarded car park or a dishonest cheat carrier who has stolen the goods is liable as for his own actions.
The carrier can evade liability only in situations strictly defined by law. According to Article 17 (2) of the CMR Convention, the carrier is exempted from liability, inter alia, if the loss of the goods was caused by circumstances which the carrier could not avoid and the consequences of which he was unable to prevent. It is up to the carrier to prove that the theft in question could not have been avoided (demonstrating, for example, that the driver parked the vehicle in a guarded car park, that the vehicle was adequately protected against theft and that there were two drivers in the vehicle to ensure better protection of the cargo). The court should then assess whether a specific event (theft, robbery) is a circumstance which the carrier could not avoid and the consequences of which he was unable to prevent. The Law Firm's experience shows that courts most often assume that cargo theft is a fairly common phenomenon, and thus one that can be predicted. Hence, proving the circumstances exempting from liability is very difficult, often even impossible.
Persons claiming compensation from the carrier most often claim it in full, citing the provisions of Article 29 of the CMR Convention, and thus the carrier's malicious intent or gross negligence (or, alternatively, the carrier's employees or any other person to whom the carrier refers for the performance of the carriage, if those employees or other persons act in the performance of their duties). In this regard, the carrier must also be aware of the need to defend himself. The carrier must also verify the amount of the loss reported and the evidence adduced to prove its existence and amount.
In case of theft, a properly formulated insurance policy proves useful for the carrier. It is therefore worth ensuring that it contains appropriate provisions to protect the carrier in the event of such situations. Policies often exclude the insurer's liability in such cases, which carriers discover only after the occurrence of an unpleasant event. Policies often also specify specific requirements to be met by carrier in order to protect cargo against theft. Failure to adapt to the required action is often combined with a refusal to pay compensation.
In the event of theft, the carrier should take appropriate defense, because it is not always the entitled persons who make claims (it often happens that claims are made by several different entities), the method of proving the damage is not always correct, the carrier can defend itself with a high degree of diligence in its actions, invoking the lack or at least limitation of its liability.
Ewa Kosowska-Czapla
Attorney-at-Law / Bankruptcy Adviser
The demand of the Orderer to submit carrier’s liability insurance in the international carriage which would the events specified in Article 29 of the CMR Convention.
One of our clients working for the transport industry has recently mentioned to us that his foreign contractors ask him increasingly more often if his carrier’s liability insurance for international carriage covers the liability for events specified in Article 29 of the CMR Convention.
According to the CMR convention, the carrier may in certain situations limit his liability, or the burden of proof is shifted in favour of the carrier, or the liability of the carrier may in some situations be excluded completely.
However, Article 29 forbids the carrier to avail himself of these convenient provisions. In some situations the carrier will always be held liable. It will happen when the damage occurred as a result of the wilful misconduct of the carrier (or by the agents or servants of the carrier or by any other persons of whose services he makes use for the performance of the carriage ) or default.
Insurance companies frequently refuse to pay the compensation quoting Article 29 of the Convention. They demonstrate that compensation may not be paid as given action was an instance of gross negligence.
General liability insurance does not require the insurance company to be held liable in this case. The insurers may only voluntarily take liability for such situations. In some insurance companies there is a possibility to include in the policy this type of situation, e.g. for an additional fee.
Therefore it is very important for the carrier whether his subcontractor has such an insurance. Our client also could ask his subcontractors about it as he is responsible for their actions. If it transpires that a subcontractor is liable because of his gross negligence (e.g. his driver parked the vehicle on an unguarded parking lot) and a damage occurred, then our Client will be liable for it jointly and severally. He may demand the payment of this amount directly from the subcontractor, but when the subcontractor is not insured against it and does not have the required amount, our client will not be able to enforce him to pay.
Often when the subcontractor is not insured in this respect, the carrier concludes a supplementary insurance contract, which means that the freight will have to take into account the cost of this supplementary contract.
Ewa Kosowska-Czapla
Attorney at law
Excessive conventional penalty for failure to send carriage documents within a specified period of time.
Our Office has recently analysed the principles of stipulating conventional penalties in transport orders. It happens quite often that Orderers stipulate high conventional penalties for failing to send carriage documents on time.
Liability for damages is not provided in the CMR Convention in the case when carriage documents were send too late, and when the conflict of law rules provide that the norms of Polish law shall apply in such situations, the contract will be assessed with the consideration of the provisions of Polish Civil Code.
As is stated in Article 483 § 1 of Polish Civil Code, one may stipulate in the contract that the damages resultant from failure to perform or from inadequate performance of a non-pecuniary obligation shall be redressed by the payment of a specified amount of money (the conventional penalty).
There is an opinion in the jurisdiction that when applying Article 483 § 1, one takes into consideration the legal character of those obligations (pecuniary or non-pecuniary) which belong to essentialia negotii, and not additional obligations (see the judgement of the Supreme Court of 19 December 2000, V CKN 171/100). Sending carriage and settlement documents is a secondary, not the main, aspect of performing the carriage contract. That is why stipulating in the contract a permanent and excessive conventional penalty (Article 484 § 2 Civil Code) which depends on the secondary obligation of sending the carriage documents on time should be deemed inadmissible.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention provides carrier’s liability also for a delay in the delivery.
Firstly, one must answer the question of what a delay is. According to Article 19 of the CMR Convention, a delay in delivery is said to occur when the goods have not been delivered within the agreed time-limit or when, failing an agreed time-limit, the actual duration of the carriage having regard to the circumstances of the case, and in particular, in the case of partial loads, the time required for making up a complete load in the normal way, exceeds the time it would be reasonable to allow a diligent carrier. Most commonly contracts for carriage specify exactly the time-limit of the delivery. The only problem that may occur is at the moment of handing over the goods. One should ascertain that an exact time and date of the delivery is entered into the consignment note. Proving that a delay in delivery has occurred is, however, insufficient to make a claim for compensation.
According to Article 23 point 5 of the Convention, if the claimant proves that damage has resulted from a delay in delivery, the carrier is obliged to pay compensation for such damage but not exceeding the carriage charges. In other words, compensation for a delay in delivery is payable only when a damage has occurred and also it is necessary for the claimant to prove that the damage has taken place. It happens every so often that despite the delay in delivery that the person commissioning the carriage receives full payment from his contractor and then proceeds to make claims for compensation against his subcontractor who has actually performed the carriage. In such situation one should require the damage to be proved by the claimant. The amount of the compensation has been limited to the amount of carriage charges.
By virtue of Article 30 point 3 of the Convention, no compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within twenty-one days from the time that the goods were placed at the disposal of the consignee. Ipso facto, in order to vindicate the claim, the claimant will have to prove not only that he has sent a reservation concerning the delay in writing, but also that he has kept the time limit specified by the Convention.
Ewa Kosowska-Czapla
Attorney at law
According to the provisions of the CMR Convention (which regulates international carriage of goods by road), the carrier is liable for the following:
The provisions of the Convention provide the possibility to limit the amount of compensation in case the liability of the carrier has already been established.
The carrier should be aware what (compensation) risk is involved in any given carriage. Knowing the risk may help to adapt the amount of freight and to ensure that he has appropriate insurance.
Total or partial loss of goods
If the carrier is liable for compensation in respect of total or partial loss of goods, the compensation is calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. In general, the market value of the goods at the place of accepting them is adapted. The value of goods is established according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to normal value of goods of the same kind and quality. Hence the amount of compensation may mot exceed the market value of goods.
Moreover, the CMR Convention provides quota limitation for compensation and the measure of compensation is the gross weight of the goods.
In addition, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in case of total loss and in proportion to the loss sustained in case of partial loss. Regarding other charges, there are discrepancies whether claims could be made to recover them (e.g. the costs of expert reports, return carriage, rescue action, cleaning, storage, disposal of goods, VAT. etc.).
The damage of the goods
In case of damage, the carrier shall be liable for the amount by which the goods have diminished in value, calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. To establish how much the goods have diminished in value, market prices are crucial. Therefore the price level after the goods have been damaged requires to be examined. Some claimants repair the goods and indicate the repair costs as the diminution in value; however, the repair costs will not always reflect the diminution in value and may be challenged as excessive.
Aside from the above, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of partial loss.
The compensation may not, however, exceed:
The delay of the delivery
In the case of delay, the compensation shall not exceed the carriage charges (Article 23 of the CMR Convention).
If the delay was connected to a damage of the goods, the compensation limits concerning the liability for the damage of the goods are applicable (see above), as the limit for delay, i.e. the amount of carriage charges, would in such cases be inappropriate. It is accepted that in the case of delay and the damage of the goods, one can cumulate the compensation for the damage of the goods and the compensation for the delay.
Interest
Apart from the duties mentioned above, a claimant is be entitled to claim interest on compensation payable. Such interest, calculated at 5% per annum, may accrue from the date on which the claim was sent in writing to the carrier or, if no such claim has been made, from the date on which legal proceedings were instituted.
The option to claim compensation exceeding the limits
There are three situations in which one may claim higher compensation from the carrier:
Declaration of the value of the goods
According to the provisions of the CMR Convention, the sender may, against payment of a surcharge to be agreed upon, declare in the consignment note a value for the goods exceeding the limit laid down in previous points, and in that case the amount of the declared value shall be substituted for the limit specified by the CMR Convention. There are thus two significant issues: firstly, the value must be entered into the consignment note and secondly, the sender must pay a surcharge. These conditions, however, are not always strictly observed. Regarding the entry to the consignment note, it is not always deemed necessary, it suffices that one is able to prove that the value of the goods has been declared in writing. And regarding the surcharge, it is often accepted that the surcharge is included in the carriage charges.
Declaration of a special interest in delivery
The sender may, against payment of a surcharge to be agreed upon, fix the amount of a special interest in delivery in the case of loss or damage or of the agreed time-limit being exceeded, by entering such amount in the consignment note. Then the sender may, independently of the compensation calculated as above, claim additional compensation, up to the total amount of the interest declared. However, the burden of proof that the damage has been done is on the sender. As was the case with declaring the value of the goods, the conditions that the special interest should be entered into a consignment note and a surcharge be paid are not always strictly observed.
Wilful misconduct or default
The issue of a wilful misconduct or default committed by the carrier or the agents of the carrier or by any other persons of whose services he makes use for the performance of the carriage, when they are acting within the scope of their employment, is an issue which requires a separate discussion as it exceeds the scope of this topic.
It is also important that said limits may be quoted also by subcontracting carriers, against whom e.g. the sender may claim compensation based on the principles of extra-contractual liability (that is, not the contract of carriage as he is not bound by it with the subcontractor and on the basis of which he could not claim compensation, but by virtue of e.g. a prohibited act).
Incidentally, it is worth mentioning that some carriers try to make contracts more favourable for them, including therein provisions stating that their liability is lower than the lower limits laid down in the CMR Convention. Nevertheless, in view of the fact that the provisions of the Convention are mandatory, such contractual provisions will be deemed null and void.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention is an international agreement signed in Geneva in 1956 (ratified by Poland in 1962) which regulates issues of international carriage of goods by road. This means that in some situations transport services provided by a Polish carrier may fall within the scope of this convention. Simply put, if a carriage of goods by road for reward is conducted from Poland to another state or to Poland from another state, then the provision of this conventions are applicable.
The provisions of the CMR Convention are of mandatory character. This means that the content of a transport order to perform an international carriage of goods cannot contradict this Convention. Should there be any such provisions in a contract, they will be null and void. Any persons wronged by such a contract may effectively defend themselves by quoting the provisions of the CMR Convention. In my other articles I have discussed the liability of a carrier for a delay in delivery (...), compensation limits concerning claims against a carrier for a delay in delivery or for loss of the goods and for damage thereto (...), and other issues. Even if these issues have been otherwise regulated in the transport order, the provisions of the CMR Convention are applicable in this respect.
The transport order is usually sent in the form of telefax message or electronic mail. The CMR Convention does not specify what form a transport order should take therefore the abovementioned are admissible. The sender and the carrier are parties to the contract. However, as the practice shows, the carrier often acts as the sender and a subcontractor is a carrier as he in fact performs the carriage. Ipso facto, the provisions of the CMR Convention are also applicable for a contract between a carrier and a subcontractor.
The Convention regulates, among others, the following issues:
If one would want to know in detail under what conditions the order must be performed and what should happen if the completion is not what has been agreed, it is worth to verify it with the CMR Convention.
Ewa Kosowska-Czapla
Attorney at law
In real life, the carriage order is increasingly more commonly performed not by a person accepting the order but by a carrier (who actually performs the carriage) with whom this person has a separate carriage order.
According to Article 3 of the CMR Convention, the carrier is responsible for the acts or omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own. Therefore, the carrier is responsible for subcontractor’s actions as if they were his own and the carrier cannot exclude his liability by showing the sender that it is a subcontractor who is liable for a damage to the goods or for a delay.
A subcontractor is responsible before the carrier who has ordered him the carriage, and not before the sender, for failure to perform or inadequate performance of the carriage. Hence the carrier should ensure that in the case of a damage, his claims against a subcontractor are properly insured.
It is worth to remember that the period of limitation of a claim against a subcontractor is equal to the period of limitation for a sender against a carrier, that is, the same as specified in general principles. The course of the limitation period is thus not affected by a potential date of payment of the compensation to the sender by the carrier as the claim against a subcontractor is not a recourse claim. Neither is the fact that the compensation has been paid significant to establish the liability for damages of a subcontractor. The subcontractor is liable before the carrier for the mere fact that the damage occurred and not for its potential redress.
Incidentally, I would like to point out that insurance companies often refuse to pay compensation, indicating that the carriage has been performed not by the insured party but by a subcontractor. It is worth therefore to ensure when signing an insurance policy that the insurance company expressly states that this policy covers also the liability for any subcontractor or that they at least do not exclude such liability.
Ewa Kosowska-Czapla
Attorney at law
It happens often in the practice of our Office that our Client is convinced that he or she has concluded a forwarding contract but this conviction is not always correct. In particular, the use of other firms while performing the order is not a sufficient condition to recognise oneself as a forwarder.
Whether a contract is a contract of carriage or a forwarding contract is of crucial importance. First of all, the liability for irregularities in carriage is different in both situations. Within the scope of Polish law, the forwarder is liable for the fault in choosing and therefore if he chose the carrier with due diligence, he is not liable for the carrier’s actions or default. By contrast, an international carrier employing a subcontractor will always be liable for their actions or default as for their own. In terms of the amount of compensation, with respect to a forwarding contract, the amount of compensation corresponds to the ordinary value of the goods. On the other hand, an international carrier by road may refer to the compensation limits laid down in the CMR Convention which are related to the weight of the goods (I have discussed this issue in detail in my previous article). If the forwarder performs the carriage himself, he has all the rights and obligations of a carrier.
The type of the contract – whether it is a contract for carriage or a forwarding contract – is determined, unfortunately, not by its title but most of all by its character (the obligations of the parties).
As the Regional Court in Szczecin showed in its verdict of 8 March 2013, file number VIII Ga 31/13, the essence of a forwarding contract is not the performance of a contract but only its organisation, including sending and receiving the goods, and performing other actions connected to the carriage. Such services are, therefore, professional assistance in handling the carriage (see the judgement of the Supreme Court of 18 January 1973, I CR 566/70, OSNC 1971/9/157).
The following questions may prove helpful when establishing if we deal with carriage or with forwarding:
Is the order limited to performing the carriage or does the scope of duties also include additional activities beyond the carriage and which could be recognised as forwarding services?
Has the transport order referred to the provisions of the CMR Convention?
Has one of the parties expressly stated when concluding the contract that they are forwarders and not carriers (when the order covers the carriage of goods and not the conclusion of a contract with another party)?
Has the payment been established in the form of freight or have there been any other components of the remuneration for performing the forwarding activities?
In case it is established that the concluded contracts are in fact contracts for carriage and not forwarding contracts, it is advisable to ensure one has carrier’s liability insurance, as the forwarder’s liability insurance does not fully protect the interest of the firm.
Ewa Kosowska-Czapla
Attorney-at-law
According to a resolution of the Polish Supreme Court dated 20 January 2022, III CZP 9/22, the perpetrator of a traffic accident and the insurance company - with which the perpetrator of the accident is bound by a contract on insurance of civil liability of motor vehicle holders for damage connected with the movement of such vehicles - shall be liable towards the road administrator for damage caused by contamination of the road with motor vehicle fluids.
In the practice of the Law Firm there are quite frequent cases in which it turns out that the transported goods have been stolen. These range from theft of goods during a driver's night-time rest, through the activities of organized criminal groups disguised as police officers, to subcontracting transport to a carrier with whom - after taking the goods - contact stops and as a result it turns out that the goods have been stolen.
In such a situation, the Ordering Party or another entity usually (for example Owner) issues a debit note to the carrier indicating that the carrier is responsible in full for the stolen goods.
In such a situation, the carrier should first examine whether the entity claiming compensation is entitled to claim compensation at all. Moreover, the carrier should report the damage to its insurer and without its consent should not submit any declarations of possible payments.
Subsequently, the carrier should examine its liability, i.e. whether it is liable for the damage at all and, if so, to what extent.
According to Article 17 (1) of the CMR Convention, the carrier is liable for the total or partial loss of the goods or for damage to them occurring between the time of acceptance of the goods and their delivery, as well as for delay in delivery (Article 17 of the CMR Convention). In the light of Article 3 of the CMR Convention, the carrier is liable for the acts and omissions of its employees and other carriers to whom it commissions the carriage, as for its own acts and omissions (Article 3 of the CMR Convention). Thus, there is a risk that the court, in any proceedings, will find that a driver who, for example, has parked in an unguarded car park or a dishonest cheat carrier who has stolen the goods is liable as for his own actions.
The carrier can evade liability only in situations strictly defined by law. According to Article 17 (2) of the CMR Convention, the carrier is exempted from liability, inter alia, if the loss of the goods was caused by circumstances which the carrier could not avoid and the consequences of which he was unable to prevent. It is up to the carrier to prove that the theft in question could not have been avoided (demonstrating, for example, that the driver parked the vehicle in a guarded car park, that the vehicle was adequately protected against theft and that there were two drivers in the vehicle to ensure better protection of the cargo). The court should then assess whether a specific event (theft, robbery) is a circumstance which the carrier could not avoid and the consequences of which he was unable to prevent. The Law Firm's experience shows that courts most often assume that cargo theft is a fairly common phenomenon, and thus one that can be predicted. Hence, proving the circumstances exempting from liability is very difficult, often even impossible.
Persons claiming compensation from the carrier most often claim it in full, citing the provisions of Article 29 of the CMR Convention, and thus the carrier's malicious intent or gross negligence (or, alternatively, the carrier's employees or any other person to whom the carrier refers for the performance of the carriage, if those employees or other persons act in the performance of their duties). In this regard, the carrier must also be aware of the need to defend himself. The carrier must also verify the amount of the loss reported and the evidence adduced to prove its existence and amount.
In case of theft, a properly formulated insurance policy proves useful for the carrier. It is therefore worth ensuring that it contains appropriate provisions to protect the carrier in the event of such situations. Policies often exclude the insurer's liability in such cases, which carriers discover only after the occurrence of an unpleasant event. Policies often also specify specific requirements to be met by carrier in order to protect cargo against theft. Failure to adapt to the required action is often combined with a refusal to pay compensation.
In the event of theft, the carrier should take appropriate defense, because it is not always the entitled persons who make claims (it often happens that claims are made by several different entities), the method of proving the damage is not always correct, the carrier can defend itself with a high degree of diligence in its actions, invoking the lack or at least limitation of its liability.
Ewa Kosowska-Czapla
Attorney-at-Law / Bankruptcy Adviser
The demand of the Orderer to submit carrier’s liability insurance in the international carriage which would the events specified in Article 29 of the CMR Convention.
One of our clients working for the transport industry has recently mentioned to us that his foreign contractors ask him increasingly more often if his carrier’s liability insurance for international carriage covers the liability for events specified in Article 29 of the CMR Convention.
According to the CMR convention, the carrier may in certain situations limit his liability, or the burden of proof is shifted in favour of the carrier, or the liability of the carrier may in some situations be excluded completely.
However, Article 29 forbids the carrier to avail himself of these convenient provisions. In some situations the carrier will always be held liable. It will happen when the damage occurred as a result of the wilful misconduct of the carrier (or by the agents or servants of the carrier or by any other persons of whose services he makes use for the performance of the carriage ) or default.
Insurance companies frequently refuse to pay the compensation quoting Article 29 of the Convention. They demonstrate that compensation may not be paid as given action was an instance of gross negligence.
General liability insurance does not require the insurance company to be held liable in this case. The insurers may only voluntarily take liability for such situations. In some insurance companies there is a possibility to include in the policy this type of situation, e.g. for an additional fee.
Therefore it is very important for the carrier whether his subcontractor has such an insurance. Our client also could ask his subcontractors about it as he is responsible for their actions. If it transpires that a subcontractor is liable because of his gross negligence (e.g. his driver parked the vehicle on an unguarded parking lot) and a damage occurred, then our Client will be liable for it jointly and severally. He may demand the payment of this amount directly from the subcontractor, but when the subcontractor is not insured against it and does not have the required amount, our client will not be able to enforce him to pay.
Often when the subcontractor is not insured in this respect, the carrier concludes a supplementary insurance contract, which means that the freight will have to take into account the cost of this supplementary contract.
Ewa Kosowska-Czapla
Attorney at law
Excessive conventional penalty for failure to send carriage documents within a specified period of time.
Our Office has recently analysed the principles of stipulating conventional penalties in transport orders. It happens quite often that Orderers stipulate high conventional penalties for failing to send carriage documents on time.
Liability for damages is not provided in the CMR Convention in the case when carriage documents were send too late, and when the conflict of law rules provide that the norms of Polish law shall apply in such situations, the contract will be assessed with the consideration of the provisions of Polish Civil Code.
As is stated in Article 483 § 1 of Polish Civil Code, one may stipulate in the contract that the damages resultant from failure to perform or from inadequate performance of a non-pecuniary obligation shall be redressed by the payment of a specified amount of money (the conventional penalty).
There is an opinion in the jurisdiction that when applying Article 483 § 1, one takes into consideration the legal character of those obligations (pecuniary or non-pecuniary) which belong to essentialia negotii, and not additional obligations (see the judgement of the Supreme Court of 19 December 2000, V CKN 171/100). Sending carriage and settlement documents is a secondary, not the main, aspect of performing the carriage contract. That is why stipulating in the contract a permanent and excessive conventional penalty (Article 484 § 2 Civil Code) which depends on the secondary obligation of sending the carriage documents on time should be deemed inadmissible.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention provides carrier’s liability also for a delay in the delivery.
Firstly, one must answer the question of what a delay is. According to Article 19 of the CMR Convention, a delay in delivery is said to occur when the goods have not been delivered within the agreed time-limit or when, failing an agreed time-limit, the actual duration of the carriage having regard to the circumstances of the case, and in particular, in the case of partial loads, the time required for making up a complete load in the normal way, exceeds the time it would be reasonable to allow a diligent carrier. Most commonly contracts for carriage specify exactly the time-limit of the delivery. The only problem that may occur is at the moment of handing over the goods. One should ascertain that an exact time and date of the delivery is entered into the consignment note. Proving that a delay in delivery has occurred is, however, insufficient to make a claim for compensation.
According to Article 23 point 5 of the Convention, if the claimant proves that damage has resulted from a delay in delivery, the carrier is obliged to pay compensation for such damage but not exceeding the carriage charges. In other words, compensation for a delay in delivery is payable only when a damage has occurred and also it is necessary for the claimant to prove that the damage has taken place. It happens every so often that despite the delay in delivery that the person commissioning the carriage receives full payment from his contractor and then proceeds to make claims for compensation against his subcontractor who has actually performed the carriage. In such situation one should require the damage to be proved by the claimant. The amount of the compensation has been limited to the amount of carriage charges.
By virtue of Article 30 point 3 of the Convention, no compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within twenty-one days from the time that the goods were placed at the disposal of the consignee. Ipso facto, in order to vindicate the claim, the claimant will have to prove not only that he has sent a reservation concerning the delay in writing, but also that he has kept the time limit specified by the Convention.
Ewa Kosowska-Czapla
Attorney at law
According to the provisions of the CMR Convention (which regulates international carriage of goods by road), the carrier is liable for the following:
The provisions of the Convention provide the possibility to limit the amount of compensation in case the liability of the carrier has already been established.
The carrier should be aware what (compensation) risk is involved in any given carriage. Knowing the risk may help to adapt the amount of freight and to ensure that he has appropriate insurance.
Total or partial loss of goods
If the carrier is liable for compensation in respect of total or partial loss of goods, the compensation is calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. In general, the market value of the goods at the place of accepting them is adapted. The value of goods is established according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to normal value of goods of the same kind and quality. Hence the amount of compensation may mot exceed the market value of goods.
Moreover, the CMR Convention provides quota limitation for compensation and the measure of compensation is the gross weight of the goods.
In addition, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in case of total loss and in proportion to the loss sustained in case of partial loss. Regarding other charges, there are discrepancies whether claims could be made to recover them (e.g. the costs of expert reports, return carriage, rescue action, cleaning, storage, disposal of goods, VAT. etc.).
The damage of the goods
In case of damage, the carrier shall be liable for the amount by which the goods have diminished in value, calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. To establish how much the goods have diminished in value, market prices are crucial. Therefore the price level after the goods have been damaged requires to be examined. Some claimants repair the goods and indicate the repair costs as the diminution in value; however, the repair costs will not always reflect the diminution in value and may be challenged as excessive.
Aside from the above, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of partial loss.
The compensation may not, however, exceed:
The delay of the delivery
In the case of delay, the compensation shall not exceed the carriage charges (Article 23 of the CMR Convention).
If the delay was connected to a damage of the goods, the compensation limits concerning the liability for the damage of the goods are applicable (see above), as the limit for delay, i.e. the amount of carriage charges, would in such cases be inappropriate. It is accepted that in the case of delay and the damage of the goods, one can cumulate the compensation for the damage of the goods and the compensation for the delay.
Interest
Apart from the duties mentioned above, a claimant is be entitled to claim interest on compensation payable. Such interest, calculated at 5% per annum, may accrue from the date on which the claim was sent in writing to the carrier or, if no such claim has been made, from the date on which legal proceedings were instituted.
The option to claim compensation exceeding the limits
There are three situations in which one may claim higher compensation from the carrier:
Declaration of the value of the goods
According to the provisions of the CMR Convention, the sender may, against payment of a surcharge to be agreed upon, declare in the consignment note a value for the goods exceeding the limit laid down in previous points, and in that case the amount of the declared value shall be substituted for the limit specified by the CMR Convention. There are thus two significant issues: firstly, the value must be entered into the consignment note and secondly, the sender must pay a surcharge. These conditions, however, are not always strictly observed. Regarding the entry to the consignment note, it is not always deemed necessary, it suffices that one is able to prove that the value of the goods has been declared in writing. And regarding the surcharge, it is often accepted that the surcharge is included in the carriage charges.
Declaration of a special interest in delivery
The sender may, against payment of a surcharge to be agreed upon, fix the amount of a special interest in delivery in the case of loss or damage or of the agreed time-limit being exceeded, by entering such amount in the consignment note. Then the sender may, independently of the compensation calculated as above, claim additional compensation, up to the total amount of the interest declared. However, the burden of proof that the damage has been done is on the sender. As was the case with declaring the value of the goods, the conditions that the special interest should be entered into a consignment note and a surcharge be paid are not always strictly observed.
Wilful misconduct or default
The issue of a wilful misconduct or default committed by the carrier or the agents of the carrier or by any other persons of whose services he makes use for the performance of the carriage, when they are acting within the scope of their employment, is an issue which requires a separate discussion as it exceeds the scope of this topic.
It is also important that said limits may be quoted also by subcontracting carriers, against whom e.g. the sender may claim compensation based on the principles of extra-contractual liability (that is, not the contract of carriage as he is not bound by it with the subcontractor and on the basis of which he could not claim compensation, but by virtue of e.g. a prohibited act).
Incidentally, it is worth mentioning that some carriers try to make contracts more favourable for them, including therein provisions stating that their liability is lower than the lower limits laid down in the CMR Convention. Nevertheless, in view of the fact that the provisions of the Convention are mandatory, such contractual provisions will be deemed null and void.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention is an international agreement signed in Geneva in 1956 (ratified by Poland in 1962) which regulates issues of international carriage of goods by road. This means that in some situations transport services provided by a Polish carrier may fall within the scope of this convention. Simply put, if a carriage of goods by road for reward is conducted from Poland to another state or to Poland from another state, then the provision of this conventions are applicable.
The provisions of the CMR Convention are of mandatory character. This means that the content of a transport order to perform an international carriage of goods cannot contradict this Convention. Should there be any such provisions in a contract, they will be null and void. Any persons wronged by such a contract may effectively defend themselves by quoting the provisions of the CMR Convention. In my other articles I have discussed the liability of a carrier for a delay in delivery (...), compensation limits concerning claims against a carrier for a delay in delivery or for loss of the goods and for damage thereto (...), and other issues. Even if these issues have been otherwise regulated in the transport order, the provisions of the CMR Convention are applicable in this respect.
The transport order is usually sent in the form of telefax message or electronic mail. The CMR Convention does not specify what form a transport order should take therefore the abovementioned are admissible. The sender and the carrier are parties to the contract. However, as the practice shows, the carrier often acts as the sender and a subcontractor is a carrier as he in fact performs the carriage. Ipso facto, the provisions of the CMR Convention are also applicable for a contract between a carrier and a subcontractor.
The Convention regulates, among others, the following issues:
If one would want to know in detail under what conditions the order must be performed and what should happen if the completion is not what has been agreed, it is worth to verify it with the CMR Convention.
Ewa Kosowska-Czapla
Attorney at law
In real life, the carriage order is increasingly more commonly performed not by a person accepting the order but by a carrier (who actually performs the carriage) with whom this person has a separate carriage order.
According to Article 3 of the CMR Convention, the carrier is responsible for the acts or omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own. Therefore, the carrier is responsible for subcontractor’s actions as if they were his own and the carrier cannot exclude his liability by showing the sender that it is a subcontractor who is liable for a damage to the goods or for a delay.
A subcontractor is responsible before the carrier who has ordered him the carriage, and not before the sender, for failure to perform or inadequate performance of the carriage. Hence the carrier should ensure that in the case of a damage, his claims against a subcontractor are properly insured.
It is worth to remember that the period of limitation of a claim against a subcontractor is equal to the period of limitation for a sender against a carrier, that is, the same as specified in general principles. The course of the limitation period is thus not affected by a potential date of payment of the compensation to the sender by the carrier as the claim against a subcontractor is not a recourse claim. Neither is the fact that the compensation has been paid significant to establish the liability for damages of a subcontractor. The subcontractor is liable before the carrier for the mere fact that the damage occurred and not for its potential redress.
Incidentally, I would like to point out that insurance companies often refuse to pay compensation, indicating that the carriage has been performed not by the insured party but by a subcontractor. It is worth therefore to ensure when signing an insurance policy that the insurance company expressly states that this policy covers also the liability for any subcontractor or that they at least do not exclude such liability.
Ewa Kosowska-Czapla
Attorney at law
It happens often in the practice of our Office that our Client is convinced that he or she has concluded a forwarding contract but this conviction is not always correct. In particular, the use of other firms while performing the order is not a sufficient condition to recognise oneself as a forwarder.
Whether a contract is a contract of carriage or a forwarding contract is of crucial importance. First of all, the liability for irregularities in carriage is different in both situations. Within the scope of Polish law, the forwarder is liable for the fault in choosing and therefore if he chose the carrier with due diligence, he is not liable for the carrier’s actions or default. By contrast, an international carrier employing a subcontractor will always be liable for their actions or default as for their own. In terms of the amount of compensation, with respect to a forwarding contract, the amount of compensation corresponds to the ordinary value of the goods. On the other hand, an international carrier by road may refer to the compensation limits laid down in the CMR Convention which are related to the weight of the goods (I have discussed this issue in detail in my previous article). If the forwarder performs the carriage himself, he has all the rights and obligations of a carrier.
The type of the contract – whether it is a contract for carriage or a forwarding contract – is determined, unfortunately, not by its title but most of all by its character (the obligations of the parties).
As the Regional Court in Szczecin showed in its verdict of 8 March 2013, file number VIII Ga 31/13, the essence of a forwarding contract is not the performance of a contract but only its organisation, including sending and receiving the goods, and performing other actions connected to the carriage. Such services are, therefore, professional assistance in handling the carriage (see the judgement of the Supreme Court of 18 January 1973, I CR 566/70, OSNC 1971/9/157).
The following questions may prove helpful when establishing if we deal with carriage or with forwarding:
Is the order limited to performing the carriage or does the scope of duties also include additional activities beyond the carriage and which could be recognised as forwarding services?
Has the transport order referred to the provisions of the CMR Convention?
Has one of the parties expressly stated when concluding the contract that they are forwarders and not carriers (when the order covers the carriage of goods and not the conclusion of a contract with another party)?
Has the payment been established in the form of freight or have there been any other components of the remuneration for performing the forwarding activities?
In case it is established that the concluded contracts are in fact contracts for carriage and not forwarding contracts, it is advisable to ensure one has carrier’s liability insurance, as the forwarder’s liability insurance does not fully protect the interest of the firm.
Ewa Kosowska-Czapla
Attorney-at-law
According to a resolution of the Polish Supreme Court dated 20 January 2022, III CZP 9/22, the perpetrator of a traffic accident and the insurance company - with which the perpetrator of the accident is bound by a contract on insurance of civil liability of motor vehicle holders for damage connected with the movement of such vehicles - shall be liable towards the road administrator for damage caused by contamination of the road with motor vehicle fluids.
In the practice of the Law Firm there are quite frequent cases in which it turns out that the transported goods have been stolen. These range from theft of goods during a driver's night-time rest, through the activities of organized criminal groups disguised as police officers, to subcontracting transport to a carrier with whom - after taking the goods - contact stops and as a result it turns out that the goods have been stolen.
In such a situation, the Ordering Party or another entity usually (for example Owner) issues a debit note to the carrier indicating that the carrier is responsible in full for the stolen goods.
In such a situation, the carrier should first examine whether the entity claiming compensation is entitled to claim compensation at all. Moreover, the carrier should report the damage to its insurer and without its consent should not submit any declarations of possible payments.
Subsequently, the carrier should examine its liability, i.e. whether it is liable for the damage at all and, if so, to what extent.
According to Article 17 (1) of the CMR Convention, the carrier is liable for the total or partial loss of the goods or for damage to them occurring between the time of acceptance of the goods and their delivery, as well as for delay in delivery (Article 17 of the CMR Convention). In the light of Article 3 of the CMR Convention, the carrier is liable for the acts and omissions of its employees and other carriers to whom it commissions the carriage, as for its own acts and omissions (Article 3 of the CMR Convention). Thus, there is a risk that the court, in any proceedings, will find that a driver who, for example, has parked in an unguarded car park or a dishonest cheat carrier who has stolen the goods is liable as for his own actions.
The carrier can evade liability only in situations strictly defined by law. According to Article 17 (2) of the CMR Convention, the carrier is exempted from liability, inter alia, if the loss of the goods was caused by circumstances which the carrier could not avoid and the consequences of which he was unable to prevent. It is up to the carrier to prove that the theft in question could not have been avoided (demonstrating, for example, that the driver parked the vehicle in a guarded car park, that the vehicle was adequately protected against theft and that there were two drivers in the vehicle to ensure better protection of the cargo). The court should then assess whether a specific event (theft, robbery) is a circumstance which the carrier could not avoid and the consequences of which he was unable to prevent. The Law Firm's experience shows that courts most often assume that cargo theft is a fairly common phenomenon, and thus one that can be predicted. Hence, proving the circumstances exempting from liability is very difficult, often even impossible.
Persons claiming compensation from the carrier most often claim it in full, citing the provisions of Article 29 of the CMR Convention, and thus the carrier's malicious intent or gross negligence (or, alternatively, the carrier's employees or any other person to whom the carrier refers for the performance of the carriage, if those employees or other persons act in the performance of their duties). In this regard, the carrier must also be aware of the need to defend himself. The carrier must also verify the amount of the loss reported and the evidence adduced to prove its existence and amount.
In case of theft, a properly formulated insurance policy proves useful for the carrier. It is therefore worth ensuring that it contains appropriate provisions to protect the carrier in the event of such situations. Policies often exclude the insurer's liability in such cases, which carriers discover only after the occurrence of an unpleasant event. Policies often also specify specific requirements to be met by carrier in order to protect cargo against theft. Failure to adapt to the required action is often combined with a refusal to pay compensation.
In the event of theft, the carrier should take appropriate defense, because it is not always the entitled persons who make claims (it often happens that claims are made by several different entities), the method of proving the damage is not always correct, the carrier can defend itself with a high degree of diligence in its actions, invoking the lack or at least limitation of its liability.
Ewa Kosowska-Czapla
Attorney-at-Law / Bankruptcy Adviser
The demand of the Orderer to submit carrier’s liability insurance in the international carriage which would the events specified in Article 29 of the CMR Convention.
One of our clients working for the transport industry has recently mentioned to us that his foreign contractors ask him increasingly more often if his carrier’s liability insurance for international carriage covers the liability for events specified in Article 29 of the CMR Convention.
According to the CMR convention, the carrier may in certain situations limit his liability, or the burden of proof is shifted in favour of the carrier, or the liability of the carrier may in some situations be excluded completely.
However, Article 29 forbids the carrier to avail himself of these convenient provisions. In some situations the carrier will always be held liable. It will happen when the damage occurred as a result of the wilful misconduct of the carrier (or by the agents or servants of the carrier or by any other persons of whose services he makes use for the performance of the carriage ) or default.
Insurance companies frequently refuse to pay the compensation quoting Article 29 of the Convention. They demonstrate that compensation may not be paid as given action was an instance of gross negligence.
General liability insurance does not require the insurance company to be held liable in this case. The insurers may only voluntarily take liability for such situations. In some insurance companies there is a possibility to include in the policy this type of situation, e.g. for an additional fee.
Therefore it is very important for the carrier whether his subcontractor has such an insurance. Our client also could ask his subcontractors about it as he is responsible for their actions. If it transpires that a subcontractor is liable because of his gross negligence (e.g. his driver parked the vehicle on an unguarded parking lot) and a damage occurred, then our Client will be liable for it jointly and severally. He may demand the payment of this amount directly from the subcontractor, but when the subcontractor is not insured against it and does not have the required amount, our client will not be able to enforce him to pay.
Often when the subcontractor is not insured in this respect, the carrier concludes a supplementary insurance contract, which means that the freight will have to take into account the cost of this supplementary contract.
Ewa Kosowska-Czapla
Attorney at law
Excessive conventional penalty for failure to send carriage documents within a specified period of time.
Our Office has recently analysed the principles of stipulating conventional penalties in transport orders. It happens quite often that Orderers stipulate high conventional penalties for failing to send carriage documents on time.
Liability for damages is not provided in the CMR Convention in the case when carriage documents were send too late, and when the conflict of law rules provide that the norms of Polish law shall apply in such situations, the contract will be assessed with the consideration of the provisions of Polish Civil Code.
As is stated in Article 483 § 1 of Polish Civil Code, one may stipulate in the contract that the damages resultant from failure to perform or from inadequate performance of a non-pecuniary obligation shall be redressed by the payment of a specified amount of money (the conventional penalty).
There is an opinion in the jurisdiction that when applying Article 483 § 1, one takes into consideration the legal character of those obligations (pecuniary or non-pecuniary) which belong to essentialia negotii, and not additional obligations (see the judgement of the Supreme Court of 19 December 2000, V CKN 171/100). Sending carriage and settlement documents is a secondary, not the main, aspect of performing the carriage contract. That is why stipulating in the contract a permanent and excessive conventional penalty (Article 484 § 2 Civil Code) which depends on the secondary obligation of sending the carriage documents on time should be deemed inadmissible.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention provides carrier’s liability also for a delay in the delivery.
Firstly, one must answer the question of what a delay is. According to Article 19 of the CMR Convention, a delay in delivery is said to occur when the goods have not been delivered within the agreed time-limit or when, failing an agreed time-limit, the actual duration of the carriage having regard to the circumstances of the case, and in particular, in the case of partial loads, the time required for making up a complete load in the normal way, exceeds the time it would be reasonable to allow a diligent carrier. Most commonly contracts for carriage specify exactly the time-limit of the delivery. The only problem that may occur is at the moment of handing over the goods. One should ascertain that an exact time and date of the delivery is entered into the consignment note. Proving that a delay in delivery has occurred is, however, insufficient to make a claim for compensation.
According to Article 23 point 5 of the Convention, if the claimant proves that damage has resulted from a delay in delivery, the carrier is obliged to pay compensation for such damage but not exceeding the carriage charges. In other words, compensation for a delay in delivery is payable only when a damage has occurred and also it is necessary for the claimant to prove that the damage has taken place. It happens every so often that despite the delay in delivery that the person commissioning the carriage receives full payment from his contractor and then proceeds to make claims for compensation against his subcontractor who has actually performed the carriage. In such situation one should require the damage to be proved by the claimant. The amount of the compensation has been limited to the amount of carriage charges.
By virtue of Article 30 point 3 of the Convention, no compensation shall be payable for delay in delivery unless a reservation has been sent in writing to the carrier, within twenty-one days from the time that the goods were placed at the disposal of the consignee. Ipso facto, in order to vindicate the claim, the claimant will have to prove not only that he has sent a reservation concerning the delay in writing, but also that he has kept the time limit specified by the Convention.
Ewa Kosowska-Czapla
Attorney at law
According to the provisions of the CMR Convention (which regulates international carriage of goods by road), the carrier is liable for the following:
The provisions of the Convention provide the possibility to limit the amount of compensation in case the liability of the carrier has already been established.
The carrier should be aware what (compensation) risk is involved in any given carriage. Knowing the risk may help to adapt the amount of freight and to ensure that he has appropriate insurance.
Total or partial loss of goods
If the carrier is liable for compensation in respect of total or partial loss of goods, the compensation is calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. In general, the market value of the goods at the place of accepting them is adapted. The value of goods is established according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to normal value of goods of the same kind and quality. Hence the amount of compensation may mot exceed the market value of goods.
Moreover, the CMR Convention provides quota limitation for compensation and the measure of compensation is the gross weight of the goods.
In addition, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in case of total loss and in proportion to the loss sustained in case of partial loss. Regarding other charges, there are discrepancies whether claims could be made to recover them (e.g. the costs of expert reports, return carriage, rescue action, cleaning, storage, disposal of goods, VAT. etc.).
The damage of the goods
In case of damage, the carrier shall be liable for the amount by which the goods have diminished in value, calculated by reference to the value of the goods at the place and time at which they were accepted for carriage. To establish how much the goods have diminished in value, market prices are crucial. Therefore the price level after the goods have been damaged requires to be examined. Some claimants repair the goods and indicate the repair costs as the diminution in value; however, the repair costs will not always reflect the diminution in value and may be challenged as excessive.
Aside from the above, the carriage charges, customs duties and other charges incurred in respect of the carriage of the goods shall be refunded in full in case of total loss and in proportion to the loss sustained in case of partial loss.
The compensation may not, however, exceed:
The delay of the delivery
In the case of delay, the compensation shall not exceed the carriage charges (Article 23 of the CMR Convention).
If the delay was connected to a damage of the goods, the compensation limits concerning the liability for the damage of the goods are applicable (see above), as the limit for delay, i.e. the amount of carriage charges, would in such cases be inappropriate. It is accepted that in the case of delay and the damage of the goods, one can cumulate the compensation for the damage of the goods and the compensation for the delay.
Interest
Apart from the duties mentioned above, a claimant is be entitled to claim interest on compensation payable. Such interest, calculated at 5% per annum, may accrue from the date on which the claim was sent in writing to the carrier or, if no such claim has been made, from the date on which legal proceedings were instituted.
The option to claim compensation exceeding the limits
There are three situations in which one may claim higher compensation from the carrier:
Declaration of the value of the goods
According to the provisions of the CMR Convention, the sender may, against payment of a surcharge to be agreed upon, declare in the consignment note a value for the goods exceeding the limit laid down in previous points, and in that case the amount of the declared value shall be substituted for the limit specified by the CMR Convention. There are thus two significant issues: firstly, the value must be entered into the consignment note and secondly, the sender must pay a surcharge. These conditions, however, are not always strictly observed. Regarding the entry to the consignment note, it is not always deemed necessary, it suffices that one is able to prove that the value of the goods has been declared in writing. And regarding the surcharge, it is often accepted that the surcharge is included in the carriage charges.
Declaration of a special interest in delivery
The sender may, against payment of a surcharge to be agreed upon, fix the amount of a special interest in delivery in the case of loss or damage or of the agreed time-limit being exceeded, by entering such amount in the consignment note. Then the sender may, independently of the compensation calculated as above, claim additional compensation, up to the total amount of the interest declared. However, the burden of proof that the damage has been done is on the sender. As was the case with declaring the value of the goods, the conditions that the special interest should be entered into a consignment note and a surcharge be paid are not always strictly observed.
Wilful misconduct or default
The issue of a wilful misconduct or default committed by the carrier or the agents of the carrier or by any other persons of whose services he makes use for the performance of the carriage, when they are acting within the scope of their employment, is an issue which requires a separate discussion as it exceeds the scope of this topic.
It is also important that said limits may be quoted also by subcontracting carriers, against whom e.g. the sender may claim compensation based on the principles of extra-contractual liability (that is, not the contract of carriage as he is not bound by it with the subcontractor and on the basis of which he could not claim compensation, but by virtue of e.g. a prohibited act).
Incidentally, it is worth mentioning that some carriers try to make contracts more favourable for them, including therein provisions stating that their liability is lower than the lower limits laid down in the CMR Convention. Nevertheless, in view of the fact that the provisions of the Convention are mandatory, such contractual provisions will be deemed null and void.
Ewa Kosowska-Czapla
Attorney at law
The CMR Convention is an international agreement signed in Geneva in 1956 (ratified by Poland in 1962) which regulates issues of international carriage of goods by road. This means that in some situations transport services provided by a Polish carrier may fall within the scope of this convention. Simply put, if a carriage of goods by road for reward is conducted from Poland to another state or to Poland from another state, then the provision of this conventions are applicable.
The provisions of the CMR Convention are of mandatory character. This means that the content of a transport order to perform an international carriage of goods cannot contradict this Convention. Should there be any such provisions in a contract, they will be null and void. Any persons wronged by such a contract may effectively defend themselves by quoting the provisions of the CMR Convention. In my other articles I have discussed the liability of a carrier for a delay in delivery (...), compensation limits concerning claims against a carrier for a delay in delivery or for loss of the goods and for damage thereto (...), and other issues. Even if these issues have been otherwise regulated in the transport order, the provisions of the CMR Convention are applicable in this respect.
The transport order is usually sent in the form of telefax message or electronic mail. The CMR Convention does not specify what form a transport order should take therefore the abovementioned are admissible. The sender and the carrier are parties to the contract. However, as the practice shows, the carrier often acts as the sender and a subcontractor is a carrier as he in fact performs the carriage. Ipso facto, the provisions of the CMR Convention are also applicable for a contract between a carrier and a subcontractor.
The Convention regulates, among others, the following issues:
If one would want to know in detail under what conditions the order must be performed and what should happen if the completion is not what has been agreed, it is worth to verify it with the CMR Convention.
Ewa Kosowska-Czapla
Attorney at law
In real life, the carriage order is increasingly more commonly performed not by a person accepting the order but by a carrier (who actually performs the carriage) with whom this person has a separate carriage order.
According to Article 3 of the CMR Convention, the carrier is responsible for the acts or omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own. Therefore, the carrier is responsible for subcontractor’s actions as if they were his own and the carrier cannot exclude his liability by showing the sender that it is a subcontractor who is liable for a damage to the goods or for a delay.
A subcontractor is responsible before the carrier who has ordered him the carriage, and not before the sender, for failure to perform or inadequate performance of the carriage. Hence the carrier should ensure that in the case of a damage, his claims against a subcontractor are properly insured.
It is worth to remember that the period of limitation of a claim against a subcontractor is equal to the period of limitation for a sender against a carrier, that is, the same as specified in general principles. The course of the limitation period is thus not affected by a potential date of payment of the compensation to the sender by the carrier as the claim against a subcontractor is not a recourse claim. Neither is the fact that the compensation has been paid significant to establish the liability for damages of a subcontractor. The subcontractor is liable before the carrier for the mere fact that the damage occurred and not for its potential redress.
Incidentally, I would like to point out that insurance companies often refuse to pay compensation, indicating that the carriage has been performed not by the insured party but by a subcontractor. It is worth therefore to ensure when signing an insurance policy that the insurance company expressly states that this policy covers also the liability for any subcontractor or that they at least do not exclude such liability.
Ewa Kosowska-Czapla
Attorney at law
It happens often in the practice of our Office that our Client is convinced that he or she has concluded a forwarding contract but this conviction is not always correct. In particular, the use of other firms while performing the order is not a sufficient condition to recognise oneself as a forwarder.
Whether a contract is a contract of carriage or a forwarding contract is of crucial importance. First of all, the liability for irregularities in carriage is different in both situations. Within the scope of Polish law, the forwarder is liable for the fault in choosing and therefore if he chose the carrier with due diligence, he is not liable for the carrier’s actions or default. By contrast, an international carrier employing a subcontractor will always be liable for their actions or default as for their own. In terms of the amount of compensation, with respect to a forwarding contract, the amount of compensation corresponds to the ordinary value of the goods. On the other hand, an international carrier by road may refer to the compensation limits laid down in the CMR Convention which are related to the weight of the goods (I have discussed this issue in detail in my previous article). If the forwarder performs the carriage himself, he has all the rights and obligations of a carrier.
The type of the contract – whether it is a contract for carriage or a forwarding contract – is determined, unfortunately, not by its title but most of all by its character (the obligations of the parties).
As the Regional Court in Szczecin showed in its verdict of 8 March 2013, file number VIII Ga 31/13, the essence of a forwarding contract is not the performance of a contract but only its organisation, including sending and receiving the goods, and performing other actions connected to the carriage. Such services are, therefore, professional assistance in handling the carriage (see the judgement of the Supreme Court of 18 January 1973, I CR 566/70, OSNC 1971/9/157).
The following questions may prove helpful when establishing if we deal with carriage or with forwarding:
Is the order limited to performing the carriage or does the scope of duties also include additional activities beyond the carriage and which could be recognised as forwarding services?
Has the transport order referred to the provisions of the CMR Convention?
Has one of the parties expressly stated when concluding the contract that they are forwarders and not carriers (when the order covers the carriage of goods and not the conclusion of a contract with another party)?
Has the payment been established in the form of freight or have there been any other components of the remuneration for performing the forwarding activities?
In case it is established that the concluded contracts are in fact contracts for carriage and not forwarding contracts, it is advisable to ensure one has carrier’s liability insurance, as the forwarder’s liability insurance does not fully protect the interest of the firm.
Ewa Kosowska-Czapla
Attorney-at-law