Since 1965, The Carriage of Goods by Road Act 1965, better known as the CMR Convention, has set out the law.
This Act, for example, governs the situation where vehicles are transported from one country to another. These are commonly brand new or prestige, high-end vehicles.
When can the CMR Convention be Applied?
For the CRM Convention to be applicable, the following conditions must be met:
- There must be a contract of carriage for reward
- The contract made must be one for the carriage of goods
- The carriage must be affected by road
- The carriage is to be carried out by certain categories of vehicle
- The contract must have international status
What if problems occur on route?
A common problem that can occur during the carriage of goods is when the transporter is involved in an accident on route, resulting in the goods such as vehicles becoming damaged.
As far as liability is concerned, similar rules to the normal English Law of Tort and Contract is usually applied.
The biggest challenge for Insurers
For Insurers, the problem usually occurs with the measure of damages.
The normal measure of damage in English Law, both contract and tort, normally revolves around the value of the goods and to ensure the claimant is put back in the original position he or she would have been in, had the contract been performed without any issues.
However, CMR will limit damages only to the weight of the goods.
For motor insurers, this can lead to very real difficulties such as when high value vehicles are transported in this way.
Exceptions and Exclusions from the CMR Convention
There are a number of exceptions and exclusions that allow a party to avoid being bound by the CMR Convention, allowing them to be subject to the normal common law contract and tortious principles, but this can require high hurdles are overcome before they take effect.
For example, an Article within the Convention allows a party to not be bound by the Convention if Wilful Misconduct has occurred on the part of one party.
This means that, if the Carrier has shown wilful misconduct in preparations for and in the conduct of the carriage itself, the party whose goods have been damaged can legitimately break free from the narrow and ungenerous damage rules within the Convention.
This will, therefore, allow them to seek full damages for losses sustained.
However, case law has tested what is meant by wilful misconduct. The law is clear that there needs to be more than mere negligence and more than even gross negligence, setting the bar very high before one can be successful in this instance.
The importance of experienced, specialist Solicitors
There are other articles within the Convention which may allow an insurer to break free from the Convention, but each of these will require careful legal preparation.
As a general rule, the odds are stacked in favour of the carrier in relation to the measure of damages.
However, when the Solicitor defending the Insurer is experienced in navigating their way through the myriad of regulations and articles within the Convention, this will often allow the insurer to challenge the operation of the Convention, which is usually the favoured outcome for an insurer.
Related Case Study – The Carriage of a Special Edition Porsche Carrera
We acted for the motor insurer of the vehicle, following damage to a special edition Porsche Carrera from Antibes to London.
The vehicle was carried on an open container, not a closed container, which the insurer allegedly specified although there was inconclusive evidence supporting this.
Damage resulted and a claim, including a claim for dimunition, was presented for around £120,000.
The Defendant referred the CMR Convention within its defence, arguing the measure of damage should be weight not value of goods, and they also denied there was an agreement to use a closed container.
After Mediation, a settlement was reached for circa £70000. Wilful misconduct was successfully argued, allowing the Claim to fall out of the strict measure of damage principles within the convention.