Watching the clock in carriage claims

Mike Burns
16 December 2013

Mike Burns, Weightmans16 December 2013 | Mike Burns

Liability claims in the marine carriage chain are subject to a patchwork quilt of rules to catch out the unwary, buried in statute, convention and standard trading terms. Of these the ‘Daddy’ is probably the limitation period by when claims must be started or else face being time barred.   

Marine injury claims are illustrative. If a fare paying vessel passenger in UK waters is injured, the Athens Convention demands that proceedings be started not within the usual three years, but instead within two years. The period is the same for air travellers under the Montreal Convention. Meanwhile, if a boat crew member is injured in an accident with another vessel, although having three years to claim for injuries against the skipper of their boat under the 1980 Limitation Act, the time limit to claim against the other boat skipper would be two years under the Merchant Shipping Act 1995 (“MSA”). Confusing. 

Staying out on the water, structural damage claims arising from vessel collision would not be subject to the general six-year tort limitation, but again two years under the Merchant Shipping Act. The time limit for bringing salvage claims would be the same. 

For cargo loss and damage, English law statutes incorporate marine international carriage and conventions, for example, Carriage of Goods by Sea Act 1971: the Hague Visby Rules; the Carriage of Goods by Road Act 1965: the CMR Convention. Therefore, such time limits will either apply compulsorily, or may be incorporated by contractual agreement.

With carriage of goods by sea claims, cargo owners have one year from delivery under Hague Visby Rules, as is widely understood. However, indemnity claims against carriers in relation to cargo loss can be subject to Civil Liability (Contribution) Act 1978, and subject to a two- year limitation from judgment or settlement.

This contrasts with international road carriage under CMR. While this also requires that proceedings be started within one year, the similarities end there. Such a period can be suspended upon written notice to the carrier and until rejection of liability for the claim. Just to spice up matters, in cases of a carrier’s wilful misconduct the limitation period is three years.

In the context of maritime arbitration claims, s.12 Arbitration Act 1996 gives some scope for the courts to extend time for starting arbitral proceedings, for example where a contractual time bar has been missed. However, for well-known limitations (like Hague Visby) the courts are unlikely to show flexibility.

Added to this labyrinth is freedom between commercial parties to agree contractual limitation periods, which the courts will very rarely interfere with; three-month limitation period for demurrage claims and certain charter party loss claims are quite common. Meanwhile, the BIFA nine-month time bar has been upheld by the appeal courts, and the 12-month RHA and UKWA limits are unlikely to be successfully challenged, being part of the fabric of UK logistics industry.

Maritime commerce operates in a fast moving and international environment. Disputes are often evidence intensive. Rightly or wrongly, stringent time limits seek to be fair to all parties, particularly defendants, to allow fair opportunity to investigate claims while records and memories are fresh. Legal time limitation therefore gives certainty. Clock watching, for once, is best practice.

☛ Mike Burns, partner in marine and transit at Weightmans LLP




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