One of the tenets of liability, whether at common law or in civil law systems, is the existence of damages.  It is not enough for a claimant to simply allege that it is owed compensation because instructions were not followed by the freight forwarder: for an obligation to compensate to exist, the claimant must have suffered damages as a result and must provide evidence of those damages.

Whether a claim is framed under a strict liability regime, like the Montreal Convention for instance, or more traditional fault-based instruments, the onus of proving the existence of damages normally lies with the claimant.    In a logistics context, this will often entail loss of or physical damage to the goods, but the damages can also relate to financial losses arising as a consequence of the freight forwarder’s act or omission.

Where physical damage is concerned, the claimant must provide evidence of alteration of the integrity of the goods in order to discharge its onus of proof.  Depending on the type of commodity shipped, the degree of complexity can vary greatly.  For instance, while it may be simple for the owner of a shipment of glass jars to prove that the cargo suffered physical damage as a result of the freight forwarder’s failure to relay to the carrier instructions not to double stack pallets, the evidence supporting a claim of physical damage to pharmaceutical products resulting from a temperature deviation will be far more complex.  And yet, in the latter case, if the claimant hopes to obtain compensation for its alleged loss, it will need to do more than point to the temperature deviation: it will also need to demonstrate how that departure from the requested temperature parameters has adversely affected the integrity of its property.  The use of proprietary information and test results may sometimes be required to support the claimant’s case.

In an effort to limit disclosure of sensitive material or in order to reduce the work required in claim situations, clients will sometimes attempt to negotiate provisions in service agreements whereby the mere deviation from temperature instructions or breach of a container’s seal is sufficient to justify a decision to reject the goods and seek compensation.  While such provisions may be enforceable between the parties, freight forwarders and transport operators should use caution when negotiating their inclusion in service agreements as liability insurers may refuse to cover claims where damages have not been adequately proven.

Anchor/BL July 27,2020