Evidence and management of theincreasing liability of road carriers -

Road transport in Spain

Francisco Sánchez-GamborinoLawyer. Legal Adviser of ASTICVice-President of the IRU Commissionon Legal Affairs IRU 9th Symposium of Lawyersabogados@sanchez-gamborino.com Geneva, 24 February 2012

A) The problems(Reasons why the carrier’s position is often weak in contractual

relations with his clients)

1. Excess of offerIn Spain, too many operators* 3665 for passenger transport* 115000 for goods transport (74000 more than 6 tons vehicles)

85 % are individual operators (not companies) owning 1-5 vehicles

This causes: a) difficulties in managing, cost calculation and cost savingb) control of the market by the senders - imposing their rules

Law 16/1987 dated 30 July concerns all Public Law relations(licensing of companies, offences, etc) – no control nr. of carriers

A) The problems

2. Little support by Spanish Government

Most of the budget goes to the railway

Enormous unnecessary investments (High-speed trains)(50.000 million EUR in a country with deficit 8 % !)Encouraging competition by railway and Short Sea Shipping

Little investment in professional training for road carriers

Poor image of road transport in public mass media (TV, radio)As causing air-pollution, traffic congestionRoad transport only appears when accidents occur

A) The problems

3. Little support by the EU

a) Policy of “balancing” modes of transport (in favour of railway and S.S.S.)

White Book 2050 provides transfer 50 % (distance + 300 km) to other modes

b) Regulations about driving times more and more severeLack of flexibility that road carriers need

c) Taxation on use of infrastructuresDuplicity: construction of roads already paid by general taxes !

A) The problemsIn the field of contractual relations

4. Uncertainty in decisions by Spanish Courts of JusticeLack of uniform, objective criteria:

For example, in case of theft of the carried goods. The same claim under the same facts is often considered :

* by one Court as simple fault (= applying limit per kilo) * by another Court as wilful neglect (= full compensation)

Few Decisions of the High Court about road transport contracts(about 35)

* Proceedings available only for claims in amount superior to 600.000 Euros (seldom in road transport)

A) The problemsIn the field of contractual relations

5. Unfavourable legal framework

Recent Law 15/2009 dated 11 November now puts the Spanish carrier in a worst situation, as includes for domestic transport the concept of default equivalent to wilful misconduct –art. 62- (never before regulated as an exclusion of limitations of liability).

(+ Unclear definition of wilful neglect - “culpa grave”)

All related to liability is compulsive – art. 46-.(increasing limitation admitted, but not diminishing)

General Conditions in course of drafting (but under such framework)Drafted by non-experts in Commercial Law (Ministry of Transport)

B) The remedies(not always easy to achieve / to put in practice,probably work together only,not “magic”, no warranty, just suggestions)

1. Having bigger-sized companies

Individual operators should gather in collective structuresin order to:

* get reductions in costs (vehicles, fuel, wheels, etc.)* deal with clients on a basis of equality* succeed in competition with foreign carriers

Spanish Government should help with more compensation individual carriers to leave (disappear) – Amount already given is not enough.

B) The remedies

2. More pressure to Spanish government

Need to balance economic support to railway and to road transport

(to private companies more than to public companies –railways-)

Insisting road is the only mode “door-to-door”, fast, efficient, ideal for most trade operations in the UE, preferred by senders

Costless for public budget

Not air-polluting (new “clean” engines: Euro-5, even Euro-6…)

3. More pressure in the UE

Idem

B) The remedies

4. Build a better contractual relationship (in order to save carriers’ interests and rights,although imperative regime of liability leaves little room for it)

Advices:

a) before making each contract, inform sender about the applicable limits of liability (or ask for a declaration of value of the goods)

b) Put reservations in the consignment note at taking over goods(CMR art. 9.2 – Spanish Law art. 14.2, art. 27.2)

c) Include by written in the contract circumstances to be considered as exonerations of liability (force majeure)-of course, not contrary to CMR or Spanish law (= null and void)

d) Use IRU General Conditions (C.G.) 3.11.2011 as often as possibleThey contain many terms in favour of the carrier !

Do not just make out a consignment note (usually too little space on it for stipulations) – better make a full contract.C.G. working as clauses of such full written contract

C.G. can not change liability regime, as it is imperative (CMR art. 41,Spanish Law art. 46) but make possible to adopt many more clauses(including safeguards for the carrier to get paid, details concerning liability)

Imperative nature some times may be not so bad: it is favourable to the “weak part” of any contract against abuse by the counterparty

(Spanish carriers often consider themselves to be such “weak part”).Limitations of liability (against higher claims) are also imperative !

B) The remedies

5. Insurance

a) Always underwrite a policy for transport insuranceNo need to be a “damage to the goods” insurance,it may be a “conractual liability” insurance, which is often cheaper

b) But should be a good insurance (covering all situationsincluding default equivalent to wilful misconduct –except “dolus”-).

c) Follow IRU instructions dated 3.11.2011 about transport insurance. d) Tell the sender that a “liability insurance” has been underwritten

by the carrier – this allows sender to claim directly to insurerand not to carrier(in Spain, art. 76 Law 50/1980 on insurance contracts).

Thank youfor your attention

Francisco Sánchez-Gamborinoabogados@sanchez-gamborino.com