Liability issues

With more and more dangerous goods being transported at sea, the risk of bodily injury, property damage, and environmental impairment increases too. Losses often give rise to liability issues and legal disputes.

The parties involved may be any of the following: suppliers, manufacturers, shippers, carriers, consignees, local or state authorities, and insurers. This is reason enough to present a few principles regarding liability.

The parties to a contract of carriage by sea are known as the shipper and the carrier. This shipper is the person to whom the carrier undertakes the duty of transporting the good. He may be the seller or buyer under a contract of sale, a freight forwarder, or any other consignor.

As a rule, national regulations prescribe that the shipper inform the carrier of the properties of dangerous cargo before transportation commences. Although the carrier must guarantee safe transportation, the shipper is normally liable towards the carrier. The legal regulations are very strict in many countries so that the shipper is liable for the transportation of dangerous cargo even if neither the shipper nor the carrier had any knowledge of the cargo’s dangerousness.

This is the case, for example, if the shipper does not inspect the cargo when accepting it from a third party for subsequent carriage, although the shipper’s rights to take recourse action — against the manufacturer, for instance — are not affected. The question of liability is not only governed by legal regulations, it is often covered by provisions in the transport contract.

If a liner shipping company charters a container ship and there is a loss, it may liable by law or by force of the charterparty4. Time charterparties often contain an agreement to the effect that the charterer is responsible for loading, stowing, and unloading the cargo and for any damage that may be caused to the vessel in the process. For this reason, the charterer often carries the same risks as the shipowner.

4 A charterparty is an agreement where the shipowner agrees to make available the carrying capacity of his vessel for either a particular voyage (voyage charter) or a specified period of time (time charter).

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