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Conditions of Carriag

The question of conditions of carriage seems an ominous and forbidding subject to most of the practical operators in road transport. Its importance, however, cannot be overemphasized. The purpose of the conditions is to reduce the risks which hauliers otherwise would be involved in, and it is the prevention or elimination of these risks that count so much in the success of a haulage business. The life of the haulage contractor may indeed be pleasant enough while things are going well; but the risks which the nature of his business compel him to take are often tremendous and formidable.

The subject will always be quite a bit of a headache, but hauliers, in their own interests, would be wise not to neglect to study the problem. It is a matter where there is always something more to learn, always with some new angle being revealed.

The question of applicability

T NSTRUCTIONS for transport are nearly always given by I telephone. This is the normal means for customers to convey their instructions to their haulage contractors. There is thus nothing in writing. At best, the order subsequently may be confirmed in writing, but this is a document prepared by the customer. As things stand, the carrier has accepted the order— often quite thankful and grateful for it—and, on this basis, the haulier has left himself wide open. He has taken on the job, in the carrying out of which he will have to face up to all the risks and problems that can arise with nothing in writing to record the relationships between himself and the customer.

The clistomer merely has to pay the money for the transaction; the haulier, on the other hand, has to see that the work is properly carried out with any risks that may be involved. And indeed there are many risks, not the least of which is the question as to whether the work is carried out to the customer's satisfaction, as determined by the customer himself.

The haulage industry is only providing a service, and usually it is the case that the charge it makes is only a small proportion of the value of the goods, and an exceedingly minute fraction of the monetary cost that could arise from loss or damage to the goods. Hence the importance to the haulier of securing some limitation of his liability.

Assuming that the haulier has made no attempt to put anything in writing concerning his relationship with his customer and the extent of his liabilities, the question arises: in the absence of written documents, is there nothing to govern the relationships between the haulier and his customer'? Indeed there is—a very great deal. There is a whole lot of history on this matter, bound up in all kinds of ancient court decisions and going back to the nineteenth century and before.

Long before the advent of the motor vehicle as we know it today there were important precedents in railway transport, water transport and road transport. But a lot of these early cases can be brushed aside if the haulier can show that he is not a common carrier but a private carrier.

This is a most important distinction. The common carrier is one who holds himself out to carry for any customer who comes along— and here there is an important advantage. He can claim the protection of the Carrier's Act of 1830 in limiting his liability. Nevertheless, there are usually greater advantages if the carrier can describe himself as a private carrier. However, in order to establish in law that he is not a common carrier, he has to prove that it is his policy not to accept from all and sundry, but to accept traffic only from individual customers on an individual basis.

The reader may be thinking that this argument has so far not led us anywhere. But it cannot be stressed too strongly that in law it is all too easy for any haulier to slip into the field of being considered as a common carrier. It is to avoid the pitfalls of this situation that we progress to the next stage of this analysis.

Written agreement necessary

Whilst it is characteristic of the haulage industry that most of its arrangements are made individually with each customer, each job being accepted and arranged in accordance with the customer's requirements at that time, this does not in itself make him a private carrier. He has to let customers be aware that he picks and chooses his customers and that the whole basis for his business transactions is one of individual settlement with each customer. It thus becomes all important that there should be something in writing—at least some background of written arrangements, which can describe and govern the intentions of the relationships between the customer and haulier. This, of course, is the purpose of conditions of carriage. This is the reason why the Road Haulage Association has for many years published its own standard set of conditions of carriage and recommended them to its members. The intention is that these should limit the risks which the haulier has to take, and that customers should know exactly the extent to which the haulier will accept liability for any snags arising from the transport of the customers' goods.

But if he wants to be sure of securing this protection, a haulier has to prove that the customer was aware of the conditions upon which he (the haulier) worked at the time when the contract was made between them. This is not always such an easy matter as might appear, particularly after a mishap of some sort, when the customer has given notice of a claim, and the haulier then endeavours to prove that the customer knew that the conditions of carriage were then in operation.

It is true that quite a number of hauliers print on their own stationery and other documents some such legend as: "All goods are carried subject to the RHA conditions of carriage." They may even print the conditions in extenso on this stationery. But it could often be the case that this stationery only reaches the customer after the contract was made for the conveyance of the goods. In all such cases the haulier is in a very poor position to try to prove that he was a private carrier and that his private carriage was governed by Conditions of Carriage.

For the haulier to be able to enjoy the protection of conditions of carriage, the situation must be reached where either the customer blandly accepts the existence of those conditions, or the haulier must be able to prove that the customer was aware of them.

Over recent years much more progress has been made towards achieving the former alternative, and many more customers have become knowledgeable of the existence of conditions of carriage and that hauliers normally work under such conditions. This, of' course, is a situation greatly to be desired. It must be stressed, in contrast, that there can be no statutory conditions of carriage, as exists in the case of the railways (where the customer has to accept that the railways' published conditions of carriage are legally applicable), and he cannot attempt to bring in any other points. The road carrier has to establish, as a first point, that the customer accepts the conditions. All the hard and painstaking work of producing them comes to nought if the customer can go to the courts and get away with a denial of their applicability, because he was unaware of them at the time when he gave his instructions for transport.

An instructive parallel is found in the London wharfinger industry. The conditions issued by the London Wharfinger's Federation have no statutory backing, but they have been widely publicised by the different wharves over many years, to such an extent that they really have become accepted as being the basis under which the wharves will accept work from their customers, and customers can hardly deny knowledge of these conditions.

The haulage industry must reach a similar situation, even though this may be more difficult. Nevertheless, the more that the conditions of carriage of the RHA are publicised and the more that individual operators themselves bring the point to the notice of their customers, the nearer this situation is approached.

The contrast between RHA and BRS conditions

T T has been a distressing weakness, lasting for nearly 20 years, I that there has existed two separate sets of conditions of carriage in the haulage industry—those of the RHA and those of British Road Services. The very existence of two separate sets allows uncertainty to creep in. It not only creates doubt as to which set of conditions is applicable, but it can also reopen the question as to whether there are any conditions at all to cover the relationship between the haulier and his customer. This is another reason why it is so desirable for BRS and the RHA to reach agreement on this important matter, and every opportunity should be taken to hammer away at this problem until a standard single set is agreed upon which will be applicable equally to the nationalized section of the haulage industry and to the private enterprise section

Hope of reaching this desirable conclusion is greatly increased now that BRS is a member of the RHA. In my view, this is one of the great benefits which the private enterprise operator will derive from the membership link. BRS, having been set up as an agency of the Government in the field of road transport, would be expected by most people to lay down some pretty firm and clear rules about its relationships with its customers, as would be found with every other Government agency. This, in itself, gives a great deal of publicity to those conditions of carriage which are used by BRS.

If the BRS conditions were the same as those of the RHAand agreement can be reached on this matter in the near future— this must certainly help a great deal in establishing the point that these are the conditions of carriage applicable in the haulage industry generally.

A topical matter

The matter has become topical again by virtue of the fact that it is currently on the agendas of the top committees of the RHA, the particular point at issue being whether the RHA conditions of carriage should be brought into line with those of BRS or vice versa, or whether some other agreed set should be adopted. Perhaps, because of this, it is pertinent that we should try to discover what are the present differences between the two sets of conditions and what it is that is causing so much discussion.

Before doing so, however, it is desirable to clarify some common misunderstandings on the subject. The first is that this is not simply a matter of insurance. For most hauliers it is probably true that conditions of carriage are regarded as being exceedingly technical—something to be pushed into the same file as "goods in transit insurance." But for the purpose of this examination it is essential that we keep the two matters entirely separate. Conditions of carriage have been designed to govern the relationship between the haulier and his customer. Whilst many hauliers do arrange for insurers to eliminate many of the risks which are potentially involved in this relationship, there is no indispensable link between the two. Hauliers do not necessarily seek coverage for all their liabilities; nor, on the other hand, do insurers necessarily underwrite all the hauliers' liabilities, although it would be true to say that insurers do, indeed, adopt various devices to limit their liabilities.

The present RHA conditions of carriage are marked "Revised January, 1961". It seems to be clause 8 of these where controversy arises. As with all documents of this kind, it is no use reading the clauses quickly. They must be carefully studied word by word. Luckily, clause 8 is quite short, with none of the problems of long and involved sentences that are so often to be found in documents of this kind. It reads as follows: "8. The contractor shall not be liable for delay or detention of goods or for any loss, damage or deterioration arising therefrom except upon proof that the delay, detention, loss, damage or deterioration was due solely to the wilful negligence of the contractor or the contractor's servants."

A question of meaning

It becomes a question as to how far the meaning of this clause extends. Historically, in earlier sets of conditions, the clause was simply intended to deal with delay or detention. I feel sure that originally it was intended to apply only to cases where goods were delayed or detailed beyond the normal, and then to avoid the carrier being responsible for "any loss, damage or deterioration arising therefrom". But it does not say this in so many words.

In every case where there is joss, damage or deterioration, inevitably it must be the case that there was some delay or detention. Hence it is now thought that this clause is applicable to every case of loss, damage or deterioration. Such a statement obviously is subject to future decisions of the courts, who alone can interpret such wording as and when any suitable case comes before them. Nevertheless, the opinions of counsel which were made available to the RHA support this view.

Now we read on and come to the word "proof". Ultimately this must mean proof that would satisfy a court of law—that strict chain of evidence and confirmation of facts necessary to satisfy a judge.

In order to probe the meaning of clause 8 let us now simplify the wording to relate merely to damage. The clause would then read: "The contractor shall not be liable for damage except upon proof that the damage was due solely to the wilful negligence of the contractor or his servants."

Thus the crux of the matter is that, under this clause, the customer has got to prove the wilful negligence of the haulage contractor. The mere proving of negligence by the carrier is insuffi

cient. The customer has got to prove that this negligence was done wilfully. This entails a very heavy burden being placed on customers, and it is expected that in only a few cases can they hope to succeed in providing any such proof.

Let us turn now to a consideration of the conditions of carriage of BRS, which are about the same age of those of the RHA, being dated January 1,1960. BRS deal with the problem in a much More positive and persuasive manner. Clause 4 is the operative one here. As I am merely trying to bring out the essence of the contrast with the RHA conditions, I propose to exclude quite a number of words from this particular condition, reducing it to certain central words.

The clause reads thus: the carrier shall be liable for any loss or misdelivery of

or damage to merchandise occasioned during transit. (Noth the positive form of wading.) Provided that where loss, misdelivery or damage arises and the carriers have failed to prove that they used all reasonable foresight and care in the carriage of the merchandise, the carriers shall not be relieved from liability for such loss, misdelivery or damage."

The two clauses mentioned above bring to the fore the difference between the two sets of conditions, the two obvious distinctions between them being:—

(a) Under the RHA conditions the onus of proof rests upon the customer, whereas under the BRS conditions it is the carrier who has to provide the proof. In all fairness it must be admitted that the carrier is the party who is more likely to have access to the facts of the case.

(b) In the case of the RHA conditions, it is "wilful negligence" that has to be proved, whereas under the BRS conditions the carrier only escapes liability if he shows that there was "reasonable foresight and care" employed, and cannot escape liability for negligence, let alone wilful negligence.

It must be emphasized at this stage that the validity of this contrast turns upon the very tight interpretation of clause 8 of the RHA conditions of carriage. But this matter could only be firmly decided by a test case before a court of law. However, the RHA itself tends to think this is the correct interpretation, supported, as I have stated earlier, by expert legal advice.

Opinion in the RHA as to what should be done is almost equally divided. It does indeed raise an issue of extreme importance and obviously there is the competitive situation between RHA members and BRS to be considered. There is an even more important question to be taken into consideration—the desirable relationship to be established between the haulier and his customers.

It can be argued, perhaps too easily, that the more strictly the liabilities of the haulier are reduced, the better for him and the better for the financial prospects of his business. But this could be a short-term benefit to be counterbalanced by a long-term loss. If customers gain the impression that hauliers are not being reasonable and fair to them, by arbitrarily imposing far too onerous conditions of carriage, then they may well decide to do something else abont their mode of transport.