Claims handlers for insurers of goods being transported by road in Europe would be well served to familiarize themselves with what is commonly referred to as the “CMR Convention” (“CMR”). The CMR (which became operative in July of 1961) is actually entitled the “Convention on the Contract for the International Carriage of Goods by Road” and applies to every contract for the carriage of goods for pay where the origin and final destination are two different countries of which at least one is a contracting party to the CMR. A majority of countries in Europe are contracting parties to the CMR.
Essentially, the CMR provides a framework for dealing with claims for those companies who act as a carrier, exporter or forwarder for the international movement of goods by road in Europe. With respect to actual carriers, they will typically be liable for the total or partial loss of the shipment occurring between the time it takes over the goods and the time of delivery including damages for any delay in delivery. The carrier is also responsible for the acts and omissions of its agents and servants and of any other persons of whose services it utilizes for the performance of the carriage.
The carrier, however, can be relieved of liability if the loss or delay was caused by the wrongful act or neglect of the claimant, by instructions of the claimant given otherwise than as a result of the carrier’s own wrongful act or neglect, the inherent vice of the goods or circumstances which the carrier could not avoid and the consequences of which it was unable to prevent. The burden of proving that loss, damage or delay was due to one of these exceptions is the responsibility of the carrier. If the carrier can in fact prove that the loss or damage can be attributed to one or more of the exceptions from liability, the claimant still has an opportunity to prove that the loss or damage was not attributable wholly or partly to one of these risks.
An accident where the carrier is entirely without fault may fall within the exceptions for liability. However, the CMR specifically provides that the carrier will not be relieved of liability by reason of the defective condition of the vehicle that it utilized. Accordingly, in those situations where the transporting vehicle malfunctions, the carrier will likely not be protected from liability under the CMR. It is important to also remember that these liability obligations also apply to companies that act as freight forwarders even though the freight forwarder does not carry out the actual transport itself.
With respect to timing, the limitations period for an action arising out of carriage under the CMR is typically one year. However, a written claim to the carrier will suspend the period of limitation until the date the carrier rejects the claim by notification in writing and returns all claim documents submitted in support of the claim.
The CMR can be an effective tool for subrogated insurers that are pursuing carriers and/or freight forwarders for damage to goods being transported by road in Europe. When a claims handler receives such a loss, it is important to determine where the shipment originated, the final destination and whether one of those countries is a contracting party to the CMR. Once the claims handler confirms that the CMR applies, a written claim should be promptly submitted within one year of the loss to suspend the limitations period. Unless the carrier or freight forwarder can establish one the specific exceptions to liability, the subrogated insurer should have a very good opportunity to obtain a recovery for claims involving damage to goods.