Breaking the Liability Limits in Multimodal Transport

The United Nations Convention on International Multimodal Transport of Goods of 1980 (Multimodal Convention) states in article 21 that a multimodal transport operator will lose its right to limit liability if it is personally guilty of willful misconduct. However, the Multimodal Convention, which was intended to enter into force together with the United Nations Convention on the Carriage of Goods by Sea of 1978 (Hamburg Rules), did not gain any international support. Presently, there is no universally accepted international regime on the multimodal transport of goods. As a result, the issue of breaking liability limits in multimodal transport cannot be explained by simply referring to article 21 of the Multimodal Convention, but instead depends entirely on the applicable international or national regime. The core problem regarding multimodal transport of goods is determining which legal regime is applicable. Explaining this core problem in detail is beyond the extent of this Article, but it can be said that the approaches taken from both sides of the Atlantic are fundamentally different. Consequently, the criteria for imposing unlimited liability will depend on the applicable regime, and the applicable regime will, in turn, basically depend on which forum handles the case.

Jurisdiction and Arbitration in Multimodal Transport

The purpose of this Article is to consider the role of the jurisdiction agreement, whether for court jurisdiction or arbitration, in multimodal transport. This Article will consider the approach taken by the English common law rules; the approach taken in the rules agreed to by the Member States of the European Union in Council Regulation 44/2001 of December 22, 2000, titled “On Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters” (E.C. Jurisdiction Regulation); and the approach of various international conventions relevant to carriage of goods culminating in the Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea (Rotterdam Rules) adopted in 2008 and signed in Rotterdam in September 2009. It will be shown that there is currently no agreement worldwide on two fundamental issues that lie at the heart of the role of the jurisdiction agreement in this field: (1) whether a neutral choice of jurisdiction that has no connection with the dispute is permitted and (2) whether a third party should be bound by that agreement.

International Recent Developments: European Union–Maritime Passenger Transport

As a result of common policy concerns in the field of transportation, broad legislation covering the maritime transportation of passengers will soon come into force in the European Union. Through Council Regulation 392/2009 of April 23, 2009, and Council Regulation 1177/2010 of November 24, 2010, the European Union enacted new laws covering liability for damages to passengers carried by sea (and inland waterways), their luggage (including cars), and their rights as passengers during the performance of the contract of carriage. Both regulations were inspired by the will to protect the passenger, who is considered the weaker party in a contract of carriage. Thus, the European Union aims to provide passengers the same protection accorded to consumers in the internal market.

International Recent Developments: United Kingdom

The new Third Parties (Rights Against Insurers) Act (2010 Act) provides third parties certain rights against insurers of liabilities where the insured is insolvent. It will come into force on a date prescribed by the Secretary of State. The 2010 Act, which repeals both the Third Parties (Rights Against Insurers) Act (Northern Ireland) 1930 and the Third Parties (Rights against Insurers) Act 1930, updates the law to reflect changes in insolvency law since the 1930s. The Act aims to set forth a more straightforward and cost efficient route to compensation for people who find themselves involved in a dispute with a party who is or becomes insolvent. To this end, the Act has introduced provisions that establish the right of the third party to seek, in a single action against the insurer, declarations regarding both the insured’s liability to it and the insurer’s potential liability under the insurance contract. Other key innovations include the introduction of detailed provisions on disclosure of insurance information to the third party, and the removal of some of the technical defences available to insurers under the original 1930 version.

International Recent Developments: Italy

Decided six years ago, the Corte Costituzionale della Repubblica Italiana’s (Constitutional Court) decision of May 26, 2005, is one of the most important decisions in the last twenty years in Italy, because it brought very important changes to the Italian legal system regarding national regulation of a carrier’s liability. As a background matter, Italy enacted the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading in the Codice della navigazione (Italian Navigation Code), which was promulgated in 1942, but did not enact the subsequent Visby Amendments (Hague-Visby Rules). The result is that Italian national law does not recognize those subsequent amendments, including provisions under article 4, rule 5(e), which exclude the carrier’s right of limitation where damage resulted from its intentional or reckless conduct; article 4, rule 5(a), which introduces the limitation per kilo; or article 4, rule 5(c), which pertains to containers. Another issue is the amount of a carrier’s liability per package or unit, which was set in 1942 and has not been changed since 1954. The result is that article 423 of the Italian Navigation Code provides only a limit per package or unit, which because of monetary depreciation is now roughly a mere $148 per package or unit. This problem is particularly severe in maritime carriage cases involving passengers with vehicles, which are considered as “goods” and not a “package.” Because passengers are not professional shippers, they are usually unaware of a carrier’s limitation of liability, so often, no declaration of a higher value is made. Thus, a carrier may discharge vehicles at their destinations that have been totally destroyed and be held liable for less than $150 for a damaged car (even for the most expensive cars on the market).

International Recent Developments: Denmark

In 2010, the general rules of the Act on Safety at Sea (Safety at Sea Act), which divide the responsibilities regarding safety at sea between the shipowner, master, etc., were amended. Previously, section 9 of the Safety at Sea Act only placed responsibility on the shipowner for ensuring that faults and defects that the shipowner had knowledge of were repaired and that the ship conformed with the legislation’s requirements as to inspections and certifications. In other respects, the master was the primary person responsible. With the technological advances in facilitating communication between ships and their land-based organizations, allocating most of the responsibilities to the master was found to be outdated. As amended, the shipowner has the overall responsibility for ensuring that all safety regulations are observed; it has been further clarified that this responsibility continues even if the shipowner has delegated or outsourced various tasks. It has further been clarified that if the shipowner has delegated the International Safety Management (ISM) Code responsibility to a third party, then this party will also be responsible under the Act for the observance of all regulations regarding the transferred obligations and fields of responsibility. The increase in responsibility for the shipowner has also been worked into the penalty provisions of the Act. Thus, in relation to the Danish scheme for criminal liability for corporations, which may be described as a vicarious criminal liability, the shipowner will be accountable for actions of the employees on board the ship even if the shipowner is not the employer. If a Document of Compliance (DoC) under either the ISM Code or the Maritime Labour Convention has been issued to someone other than the shipowner, then in addition to the shipowner the holder of the DoC will also be held accountable for the actions of the master and crew.

International Recent Developments: China–Vessel-Source Oil Pollution Compensation

On January 10, 2011, the Judicial Committee of the Supreme People’s Court of China, at its 1509th meeting, adopted the Provisions of the Supreme People’s Court on Trying Cases About Disputes on Compensation for Oil Pollution Damage from Ships (Oil Pollution Provisions). The Oil Pollution Provisions were promulgated by the Supreme People’s Court on May 4, 2011, and came into force on July 1, 2011. The Oil Pollution Provisions consist of thirty-two articles.

Before the Oil Pollution Provisions were adopted, the China Vessel-Source Oil Pollution Compensation Regime (CVOPCR) provided a legal framework consisting of international conventions and China’s domestic legislation. Specifically, China is a party to the International Convention on Civil Liability for Oil Pollution Damage of 1992 (CLC-92) and the International Convention on Civil Liability for Bunker Oil Pollution Damage of 2001 (Bunker Convention). In addition, China enacted several domestic laws governing vessel-source oil pollution damage and compensation owed by polluting ships, which include the Marine Environment Protection Law of the People’s Republic of China (Amended), China Maritime Code (CMC), Special Maritime Procedural Law of the People’s Republic of China, and Regulation on the Prevention and Control of Vessel-Induced Pollution to the Marine Environment (Oil Pollution Regulations). In practice, the coexistence of the above mentioned laws has caused irregularities and inconsistencies in the application of law. Also, the above laws do not address important issues with respect to vessel-source oil pollution compensation, namely the procedures for creating an oil pollution limitation fund.

Recent Developments in Admiralty and Maritime Law at the National Level and in the Fifth and Eleventh Circuits

This is the eleventh article in a series of annual reports on U.S. admiralty and maritime law and practice. In these articles we try to call attention to the principal national-level developments that bear on the work of admiralty judges, lawyers, and scholars, and we look more closely at the relevant work of the United States Courts of Appeals for the Fifth and Eleventh Circuits.

Causation Issues in FELA and Jones Act Cases in the Wake of McBride

The Federal Employers’ Liability Act (FELA), 45 U.S.C. §§ 51-60, was enacted in 1908 to provide railway workers with a federal cause of action against their employers for negligently inflicted workplace injuries and illness. In 1920, the Jones Act, 46 U.S.C. § 30104, followed suit, giving seamen a negligence cause of action against their employers by incorporating FELA. The United States Supreme Court has frequently declared that “the Jones Act adopts ‘the entire judicially developed doctrine of liability’ under [FELA].” Although on four occasions the Supreme Court has held that the Jones Act is sometimes more plaintiff-friendly than FELA, there is nevertheless a presumption that FELA jurisprudence governs Jones Act cases, and vice versa.

“Absent express [statutory] language to the contrary, the elements of a FELA claim are determined by reference to the common law [of negligence].” In explicit language, FELA departs from the common law of Negligence in four respects: “It abolished the fellow servant rule, rejected contributory negligence in favor of comparative negligence, prohibited employers from contracting around the Act, and abolished the assumption of risk defense.” All four of these departures involve affirmative defenses to Negligence liability. This Article addresses the legitimacy and meaning of a fifth departure that was recently spotlighted in CSX Transportation, Inc. v. McBride. Unlike the four well-accepted FELA abolitions of affirmative defenses, the McBride departure–one that is destined to remain somewhat controversial–goes to the heart of a FELA plaintiff’s prima facie case in Negligence.