NIP THOSE CLAIMS By IN THE BUD B.L., C.A., G.
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B. Beardsley, Irreparable. Harm May be Done to Good Business Relationships by Disagreement Over Claims Against Hauliers for Liss of, or Damage to, -Goods in Transit IT is not improbable that more business relationships between haulier and customer have come to grief as a result of some disagreement over a claim than for any other single reason. Whether this is an accurate statement or not, it is certainly true that the question of claims introduces into business associations an element Which must be dealt with by the haulier with 'particular' care, if he places any value on goodwill.
It may, therefore, be of value to consider this very vexed question in some detail in an effort to arrive At some conclusions which may assist the haulier' to preserve harmonious relationships between himself and
his customers. ' . '
Ideally, of course, there would be no claims, and a haulier would devote his best efforts to preventing them. His drivers should be given clear instructions as to the extent of their responsibility, and failures to comply with these instructions should always be dealt with firmly. There is no point in laying down rules about loading, sheeting, roping, leaving the lorry unattended, etc., and not enforcing them. This, no doubt, is easier said than done, but it must be brought home to drivers that claims really do matter, and that it lies within their _ power to prevent most of them.
Bonuses for Drivers . A bonus system can have excellent results if carefully thought out The haulier should bear in mind that the handling of claims adds a Considerable sum to his overheads, and that it is worth something to him to cut them down to a 'inininnun. If the 'drivers have a direct financial interest in keeping claims down, it will be beneficial to the haulier in every way
It is not always easy for drivers to carry out their instructions literally, and this situation must be faced up to. For example, a common cause of disagreement between a haulier and his customer arises in relation to the exact constitution of the load. Whilst in theory the driver accepts responsibility for the quantity of material which is loaded on to, his vehicle, it frequently happens that he cannot keep pace with the checking and loading as they take place, particularly if the load be made up of cased goods.
The driver may have some doubts at the time of loading, but eventually gives a clear or qualified signature. If, at the time of unloading, there is a discrepancy, the driver naturally recalls his original doubt, and whether he gave a clear or qualified signature the haulier feels that a claim is unjustified. It is frequently put forward by him that the load was sheeted after loading in the presence of the customer's staff, and that it was unsheeted at the other end in the presence of the unloading staff. If, therefore, there is a discrepancy, it must arise from an error in the loading or the unloading.
The customer often appreciates the logic of this 'argument. Nevertheless, it is an sunsatisfactory state of affairs, and if 'it occurs regularly steps should be taken
by the haulier and his customer in conjunction. If they do not act together they will find that the position will rapidly deteriorate, either on account of increased carelessness or because the driver will find that it is just too easy to express a doubt as lb the constitution of a -load, after loading is complete, and then to remove a case or_two during transit, knowing that he has covered hitthelf, when the deficiency is eventually discovered.
The best _way to keep everybody up to scratch, where this problem is becoming too regular, is for the haulier and 'customer to instruct the warehouse foreman at the customer's premises to unload any vehicle in respect of which, doubt is exptessed by the driver. This is not usually a very popular move, and if a driver expresses doubts without reason' he is not likely to do it more than once or. twice and incur the wrath of the warehouse staff.
Eliminate the Problem Perhaps the principal point in the above illustration relates ,to the combined effort of the haulier and his customer to deal with the difficulty. It is not enough for the haulier to advise his driver always to give a qualified signature if he has any doubt, or simply to refuse to" pay' any claim which arises. Nor is it right, contrariwisec for the haulier to pay up with bad grace. The solution is to eliminate the problem, and it is in the joint interests' of both sides to do so. if this attitude of mind be -applied to all practical problems, much dissension will he avoided.
A haulier should take good care that his customers, and particularly his regular customers, are aware of his conditions of carriage. This is not the place to discuss what these conditions should be, but reference may be made to two particular points.
It is usual for a carrier to set some limit on his liability for loss by reference to a maximum value per ton carried. He should make this perfectly plain to his customers. Whilst he may have protected himself, legally, by some microscopic writing on the back of his invoice or elsewhere, be will find that it is much more satisfactory to advise the customer by word Of mouth in any instance where the value of the goods carried approximates to his maximum figure.
Valuation of the Load
The second point relates to the basis of valuation of the load. It is rarely clear between the haulier and his customer whether the liability for the load is at selling price or at production cost. No doubt the legal position depends on the question of the ownership of the goods at the time of the mishap, but it is undoubtedly the case that many firms consider that their goods are being carried under conditions which provide insurance foi the full selling value, even where, for example, the goods are being transferred only from factory to depot.
Very often manufacturers do not wish to claim at manufacturing cost, and thus reveal their profit margin to persons outside the firm. The carrier should certainly Bit
have this situation clarified with his regular customers before, rather than after, the first claim.
Where vehicles are hired out under Contract A licences the contra:tor should make specific reference in his contract as to the extent of his liability, so that there can be no doubt on either side.
The previous remarks deal with only one or two specific instances of difficulty. It would be impossible in an article of this kind to be expansive on the subject of claims because the legal implications are many and various. In my view, however, it is not the legal aspect of claims which presents the greatest menace to the maintenance of good relations between haulier and customer, but rather the attitude from which many contractors view the problem. They should regard each claim as a potential threat to their business, and deal • with it accordingly.
Customers Usually Reasonable I should say, from my experience, that the customer does not normally feel unduly dissatisfied because loss or damage does, in fact, arise. Any expression of annoyance made in the beginning is usually directed at the malignant hand of fate rather than at the carrier himself. The customer does not expect perfection, and he knows that accidents will happen from time to time in the best-regulated business. He is quite prepared to believe that any one of half a dozen explanations is the cause of the trouble without, at the same time, regarding any of these causes as fatal to a continuance of business dealings.
I should, therefore, advise the haulier not to get on his high horse and become too defensive when his customers first raise the question of a claim. If he handles the matter tactfully he can create the feeling that both sides are partners in misfortune, which is the best possible basis for considering a claim.
I would suggest that the carrier's approach to the question of a claim, when first intimated, is to ask for a written statement of facts (if the intimation is verbal) and to give an assurance that the matter will be looked into. If he can get this over to the ctistomer without giving the impression that the suggestion of a claim is a reflection on his professional reputation, then he is off to a good start.
Heads in the Sand It is from this point onwards that particular care is called for. It is an unfortunate fact that too many hauliers tend to treat claims as a side-issue which they hope they may never have to face up to. From the point of view of the customer, it frequently appears that he is taking part in a " shadow-boxing " contest or a marathon endurance test, however you care to look at it. Letters are unanswered or replies are evasive, until the customer gets the impression that a little game is taking place the object of which is to wear him out.
It must be said, I think, that this impression is often fully justified. Many times have I seen claims withdrawn because no progress was being made, and because continued correspondence would cost more than the claim was worth. Whilst apparent successes of this kind might appear to justify the tactics employed, it is fundamentally unsound to conduct business on these lines, whether it is done deliberately or otherwise.
I might say in passing that any skill which members of the road haulage industry might possess in the matter of these delaying tactics pales into insignificance compared with that possessed by the Railway Claims Departments, who are pastmasters in the art of keeping the ball in play. In fact, it is not unknown for them to defeat themselves, in the same way as an over-elaborate dribbler, by reviving some claims correspondence months after the unfortunate consignor had given everything up for lost and had reconciled himself to defeat. [I need hardly say that I am referring to the bad old days of private ownership. All these evil practices were naturally discontinued on January I, 1948.] Returning to the road haulier, however, the point which I wish to make and emphasize is that bad feeling arises not because there is a claim; not necessarily because. the haulier disputes his liability; but more frequently when the customer gets the impreskon, rightly or wrongly, that he is being stalled off and made a fool of.
Settle Claims Within a Month
should like to put it to the haulier, therefore, that he should make a positive effort to clear up all claims within a month of their being raised. Nothing new is likely to "come to light after that time. All the facts which can be obtained are available, and it is merely a question of agreement between customer and haulier. If, in the circumstances of the particular case, the haulier is prepared to pay in full or to make a compromise, let him make his offer at once before it appears to be given under pressure. If he feels that he cannot accept liability, he should say so from the start, bearing in mind that unpleasant things are put over so much better verbally than in writing. It is on such occasions that 'good personal relations with members of the customer's staff prove so valuable.
If the haulier acts in this way I think he will find, in nine cases out of ten, that the customer will come to a settlement of the case immediately where the issue is laid clearly before him.
Force a Conclusion
Having got together, the haulier should force the matter to a conclusion, unless further research is required into the facts. There is no point in the parties expressing contrary views, maintaining their standpoint, and then parting, only to return to the charge at a later date.
The moral of the story is that the haulier must deal with claims as they arise. Claims, like the poor, are always with us. It is no use pretending, deliberately or otherwise, that they are not there.
A carrier should never forget that his customer will often accept a. rates increase which may cost him thousands of pounds annually with less demur than he will write off a small claim on which no progress is being made, and where he suspects stalling tactics.
In many instances the handling of claims is passed over to an insurance company. Because he knows that he is covered under some policy, the haulier should not forget that his customer looks to him to deal with the claim, and he should ensure that progress is being made to settle the matter.
feel confident that if hauliers make themselves claims-conscious and follow the advice given above, they will be surprised at the measure of goodwill they will earn—even if they do not pay out a penny piece more than they do now, but only show their anxiety to treat claims as urgent problems.