Industry Issues: Shipper responsibility and liability: It’s a matter of time
May 1, 2005
There are few things more maddening for the responsible carrier than to see rates being cut by and business going to carriers that do not make the necessary investment in safety and maintenance and pa...
There are few things more maddening for the responsible carrier than to see rates being cut by and business going to carriers that do not make the necessary investment in safety and maintenance and pay lip service (if that) to compliance with the laws of the land.
Those types of carriers are in the minority, but we all know they exist and somehow seem to be able to fly under the radar and stay in business.
What is the shipper’s responsibility in these cases?
Can the shipper be held liable in the event of an accident involving a carrier?
The answer is yes.
It’s already happening in the US and the day is coming in Canada where a shipper will be enjoined in a lawsuit brought following an accident where a third party is seriously or fatally injured.
In our increasingly litigious society, the prudent shipper would be well advised to exercise due diligence in choosing transportation providers.
Imagine the effect on the integrity and public image of the shipper, never mind the legal liability, when a company’s product appears front and centre on the evening news, strewn over a highway, or clearly visible but going up in flames in the wreckage of an accident.
What does that say about the company’s choice of motor carrier?
Depending on the circumstances, maybe very little. Or, again depending on the circumstances, exposure to potential legal liability.
The prudent shipper will want to manage its risks so as to minimize its exposure to lawsuits arising out of such accidents by becoming an active partner with its motor carriers and by objectively assessing the carriers it does business with or is contemplating doing business with.
There are readily available evaluation tools that the shipper can employ.
The scope of the risk management exercise will depend on the nature of the shipper’s business and the products transported.
For example, the province of Ontario maintains a public record for each motor carrier, which assigns a safety rating to each carrier and monitors a carrier’s on-road activities.
The shipper can make inquiries to determine the Safety Rating assigned to a particular carrier and can examine the carrier’s Commercial Vehicle Operator’s Registration System (CVOR) rating.
Granted, the rating and the CVOR systems are presently far from perfect and there may be situations, from time to time, where an otherwise “good” carrier might have a rating that does not paint an entirely accurate picture of that carrier’s commitment to safety.
The shipper will want to discuss these with its carrier to be satisfied that corrective measures are being undertaken.
However, not being aware may land the shipper in legal hot water some day.
In addition, the diligent shipper is keenly aware of the particular requirements for the transportation of its products and should be well-educated in those areas where the shipper and carrier work together to ensure that the carrier is properly equipped, and has the knowledge, training and experience to handle and safely transport the shipper’s products.
For example, a shipper moving products that fall under specific legislated requirements such as dangerous goods or load security should be properly trained and educated in these requirements.
The risk manager should ask this question: in the situation where the company’s products show up on that nightly newscast or on the front page of the newspaper as a result of an accident – and setting aside the issue of damage to reputation – is it within the realm of possibilities to imagine an enterprising litigant’s lawyer suggesting that the shipper owes their client, as the injured party, a duty of care, and by failing to take basic, proper steps to hire a qualified carrier, the shipper has breached that duty of care and is therefore liable or at least partially liable?
Sadly, some of the shippers that are most likely to turn a blind eye to these issues are not necessarily the smallest.
Some of the largest corporate entities in North America appear to be among the worst offenders. Safety must be everyone’s business.
For many years, the carriers pursued the notion of shipper responsibility via the regulatory route, but to little avail. The courts are likely to deal with this matter more effectively than the politicians ever could.
– David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.