Changes
From 1 September 2009, RHA members are entitled to trade subject to the new 2009 Edition of the Conditions.
None of the changes affect the carrier's liability for loss and damage or the limits of liability. There are some amendments to the definition section ("Dangerous Goods", "In writing" and "Trader") and some other stylistic changes.
The main substantive changes include the time limits for bringing proceedings (Clause 13(2)), the carrier's entitlement to exercise a lien (Clause 14) and law and jurisdiction (Clause 16).
Analysis and Commercial Impact
Time limits: the 2009 Edition retains the existing time limits concerning written advices of loss, mis-delivery or non-delivery and the submission of written claims. The one year time bar for commencing legal proceedings from the date transit commenced also remains, but it now requires written notice thereof to be given within the same one year time limit.
This is of obvious importance to those parties, including cargo interests, forwarding agents, shipping lines, logistics providers and carriers higher up the chain, who have claims against the RHA carrier. On the face of it, starting legal proceedings within one year from the commencement of transit will no longer be sufficient to protect time.
As readers will know, the BIFA Conditions contain a 9- month limitation period for commencing legal proceedings and a requirement that written notice thereof must be given within the same period. This provision was considered and upheld in the case of Granville Oils & Chemicals v Davies Turner (2003). The Court found that the forwarding agent was entitled to know whether legal proceedings had been commenced against it so that it had enough time to bring an indemnity claim against the actual carrier involved, before the commonly applicable one year time limit in the carriage contract had expired.
Given that any claim brought by the "principal" RHA carrier against a sub-carrier is also likely to be subject to the same one year time bar, it is difficult to see how the new requirement under the 2009 Edition will afford the "principal" RHA carrier any additional protection. It might simply be seen by cargo interests as an attempt to "catch" the unwary claimant. Be that as it may, if the carrier and the customer are commercial entities of equal bargaining strength the Court is likely to uphold this provision. The message is simple - claimants beware.
Lien: under the 1998 Edition, the carrier has a general lien and a power of sale (over the specific goods carried for any monies due from the customer) when the customer is the owner of the goods. However, if the customer is not the owner, the carrier only has a particular lien (over the specific goods carried for monies relating to that particular movement) with no power of sale. The 2009 Edition widens the carrier's rights giving it a particular lien and a general lien and a power of sale, as against a newly defined, "Trader", which includes the owner (or person acting on its behalf), customer, sender and consignee.
In any dispute with the customer over freight charges the lien is one of the carrier's most effective weapons. Forwarding agents, sea carriers, air carriers and other parties who are not themselves the owners, but who contract or sub-contract with a RHA carrier, must be aware, that on the face of it, the carrier can hold and sell the goods if it does not receive payment of any invoice.
Law and jurisdiction: The law and jurisdiction provisions provide for English law (as does the 1998 Edition) and the sole jurisdiction of the English courts. Readers will be aware that the 1998 Edition provides for the jurisdiction of the "United Kingdom courts". Strictly speaking, there are no "United Kingdom courts" and the new provision therefore removes any residual uncertainty. The new Edition also affords the parties an opportunity to agree in writing alternative law and jurisdiction provisions.
HFW Tip
From the RHA carrier's perspective, if it intends to trade on the 2009 Edition it must ensure that it gives its customers sufficient notification. Ideally, all existing customers should be advised in writing prior to 1 September 2009 (preferably by Recorded Delivery). For any spot business concluded over the telephone from 1 September 2009, booking staff should be instructed to tell the customer before the customer accepts the quotation (as this is likely to be the time when the contract is concluded) that the RHA Conditions 2009 Edition apply. This should immediately be confirmed in writing. A failure to give adequate notice (or to evidence that such notice was given) will mean that the carrier will not be entitled to rely upon the Conditions.
A party intending to claim against the RHA carrier whether it be the owner, freight forwarder, sea or air carrier (or indeed if one RHA carrier is seeking an indemnity from another RHA carrier), must ensure that the legal proceedings are commenced within one year from the commencement of transit and that written notice of that fact is given to the carrier within the same period. There is a real risk that valid claims will fail if parties omit to give the required notice.
Operationally and legally, liens continue to cause problems. The new provisions seek to strengthen the carrier's position and on their face, this aim is achieved. If the party contracting with the carrier is responsible also for the carrier's charges, it is contractually obliged to settle the carrier's account even if there is an alleged claim (see the well established "no set off" provision at clause 8 (2)) and if it chooses not to do so, faces the prospect of a difficult conversation with the owner if the carrier then seeks to rely upon the lien clause and its power of sale.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
