Legal Liability of Hauliers

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It’s Common Law

Hauliers are liable for loss or damage to goods at Common Law unless they operate under conditions of carriage or unless a statute applies. Historically there have been “Common Carriers” and “Private Carriers”.

The common carrier as an institution is almost defunct but still alive as a legal principle. Such a carrier is one who holds himself out as willing to carry for any person who is prepared to employ him and by Common Law he is made strictly liable for the goods entrusted to him, a liability qualified only by the exceptions of act of God or the Queen’s enemies, inherent vice and fault or fraud on the part of the consignor or consignee.

The only protection afforded to such a carrier is contained in the Carriers Act of 1830 which is mentioned below. The vast majority of carriers reserve the right to choose the jobs they will accept thus falling outside the classification of “common carrier” and often reinforcing their position by specifically saying so in their conditions of carriage.

The private carrier operating with no contract conditions assumes the ordinary common law liabilities of a bailee in that he is responsible for taking reasonable care of the goods, failing which he is liable for any resulting loss or damage, a liability limited only by the amount of the owner’s loss. If he can prove the loss to have occurred without his negligence he can escape liability but the onus resting upon him to do so is a heavy one.

In practice many smaller hauliers, particularly one man businesses, operate without conditions of carriage and therefore can be liable at common law. Those who do not insure adequately can find that they are liable in full for any loss or damage subject only to the no negligence defence. In a commercial situation however it is not good practice to argue no negligence with customers and hauliers who only insure their common law liabilities are perhaps ill-advised.

Liability Under Contract

Contract conditions vary considerably and are drawn up by hauliers to cover all aspects of the contract. These will normally include items in respect of completion of consignment notes, how changes are to be levied, as well as the liability of the hauliers in the event of loss or damage. Contracts may extend or restrict common law liability.

A detailed discussion of the most common conditions in use – the Road Haulage Association Conditions – is set out in a later section.

Liability Under Statute

The Carriers Act 1830

This rather ancient Act restricts in some respect the common law liability of common carriers mentioned earlier and is today of very limited application. The Act protects a common carrier from risks attaching to articles “of great value in small compass” unless the carrier is warned of their presence and given the opportunity of charging for the extra risk involved. This is unlikely to be of any practical importance in today’s commercial environment.

The Carriage of Goods by Road Act 1965 (C.M.R.)

This Act brought into British law the provisions of the Convention on the Contract for the International Carriage of Goods by Road in1967. The C.M.R. as it is known was drawn up with the object of standardising liability of carriers undertaking international road haulage throughout the participating countries. Detailed consideration is given to C.M.R. in a later section.

The Unfair Contract Terms Act 1977

Strictly speaking this Act did not in itself impose a system of liability. It is of general application however as it curbs the power of a party acting in a business capacity to avoid the consequences of negligence by contract. “Curb” is the operative word, because the power is not denied entirely.

In considering whether a contract is unfair the Act offered some guidelines on what may be considered relevant:

  1. The relative bargaining strength of the parties.
  2. Whether the customer received an inducement to agree the restrictive term, or had opportunity of contracting with another carrier without it.
  3. Whether the customer knew or ought reasonably the have known of it.
  4. If the liability restriction applies if some condition is not complied with, was it reasonable at the time to expect that compliance would be practicable.

If within this framework it is deemed unreasonable to allow the carrier the protection of their contract then they are liable in accordance with common law principles. Their liability therefore would only be limited by the sum of their customer’s loss.

The effect of this Act was to focus the attention of the carriers and their trade associations on conditions of carriage and to redraft their contracts so that they would not contravene the spirit of this Act. In many cases conditions of carriage were submitted to the Office of Fair Trading for approval and so would then be unlikely to fall foul of this law.