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THE WEEK Roy Bowles indemnity judgment is a blow for hauliers and insurers
Page 38
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from a special correspondent • A haulier's ability to claim from a third party (eg a forwarding agent) for any amount in excess of the limits set by his conditions of carriage, in cases where the haulier has been successfully sued for loss of goods through negligence, has been curtailed as a result of a judgment given in the Queen's Bench Division.on November 2. Mr Justice Browne, in a reserved judgment, gave his decision in favour of the third party, Rennie Hogg Ltd, against whom a claim had been brought by Roy Bowles Transport Ltd.
The hearing arose out of a case in which plaintiffs Gillespie Bros and Co. Ltd had succeeded in a claim against Bowles for the value of a parcel containing four gold watches being carried in a Bowles van; the parcel was stolen and, as defendants in the case, Bowles were unable to prove that they had taken reasonable care for the safety of the goods.
Bowles claimed that, being covered by the RHA Conditions of Carriage 1967 in contracting with the third party, Rennie Hogg Ltd, they were entitled to the third party's indemnity in respect of the claim made against them by Gillespie. In effect, Bowles were invoking condition 3 (4) of the 1967 Conditions as a basis for claiming for that part of the award which was in excess of the limit per ton set by the 1967 Conditions. In the 1967 version of the RHA conditions, the relevant 3 (4) states: "The trader shall . .. keep the carrier indemnified against all claims or demands whatsoever by whomsoever made in excess of the liability of the carrier under these conditions."
In the Queen's Bench Division last week Mr Justice Browne held that condition 3 (4) was one of the terms of the contract between Bowles and Rennie Hogg, and the question to be answered was whether this condition indemnified the defendants (Bowles) against successful claims or demands made on the grounds of negligence by them or their servants. Pointing ,out that condition 3 (4) did not contain any express reference to negligence, while conditions referring to loss, damage and injury specifically used the word, Mr Justice Browne felt that it was impossible to hold that condition 3(4) could be considered to extend to negligence by the carrier.
His Lordship said that the working of condition 3 (4) was very wide, and in his judgment its "claims or demands" should be limited to claims or demafids that were in some way related to the goods to be carried in the hired vehicles. However, he saw no reason for 3 (4) to be limited to applying only to loss of or damage to the goods: the condition could have said so, if that was the intention. And if condition 3 (4) could be taken as wide enough to cover claims other than those for the loss of or damage to the goods, it was clear that such claims might be based on grounds other than negligence. In Mi. Justice Browne's judgment the existence of other possible subject matter for condition 3 (4) not based on the defendants' negligence, or that of their servants, was fatal to the defendants' claim.
(Editorial comment: see page 35)