TT Talk - Security and calculation of damages in Germany

In a case before the German Federal Supreme Court in September 2010, cited as 1 ZR 39/09, a shipper instructed the defendant carrier to arrange for the road transportation of laptop computers from Germany to Italy. The shipper’s security guidelines were incorporated into the contract of carriage which stipulated that the driver had to spend his rest period at a specified site and that the vehicle was not to be left unattended.

The driver stopped at an unguarded service area, locked the truck, went to the rest room and had
a coffee in the restaurant.  When he returned, the truck and trailer had disappeared. Unsurprisingly,
a German court decided that this was wilful misconduct under CMR, but
the ramifications for the shipper are significant.

The plaintiff claimed €1 million under CMR Article 23, as the market price of the goods.   

The relevant part of Article 23 reads as follows:

  1. When, under the provisions of this Convention, a carrier is liable for compensation in respect of total or partial loss of goods, such compensation shall be calculated by reference to the value of the goods at the place and time at which they were accepted for carriage.
  2. The value of the goods shall be fixed according to the commodity exchange price or, if there is no such price, according to the current market price or, if there is no commodity exchange price or current market price, by reference to normal value of goods of the same kind and quality.
  3. Compensation shall not, however, exceed 8.33 SDRs per kilogram of gross weight short.

The Court held that, under Article 23, the right to rely on market value carried with it the obligation to accept limitation at 8.33 SDR per kilo (which would have been € 77,563).  In order to avoid limitation, the claimant would have to rely on Article 29.

The relevant part of article 29 reads as follows:

  1. The carrier shall not be entitled to avail himself of the provisions of this chapter which exclude or limit his liability or which shift the burden of proof if the damage was caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court or tribunal seised of the case, is considered as equivalent to wilful misconduct.

    Thus, having succeeded in establishing wilful misconduct, the shipper found that he was required under German domestic law to prove his actual loss, rather than being awarded the market price. This necessitated a detailed justification of the actual loss and the case was sent back to the lower court for re-calculation of the damages. This approach to damages required by German law is likely to be more rigorous than straightforward reliance on market value, and to provide a less satisfactory result for the claimant.   

    This is a very important case in German law, in which the appeal court overturned the judgments of two lower courts, tending to belie Germany’s reputation as an ‘anti-carrier’ jurisdiction.

    What is secure parking?

    As a postscript to this analysis of the legal case it’s valuable to consider the accessibility of information relating to secure parking across Europe. While a number of national trade associations may have specific advice, a reasonable source of information could be the 'European Secure Parking Organisation'. Alternatives include TAPA (Transported Asset Protection Association), which is a membership organisation and the IRU (International Road Transport Union) and particularly the TransPARK information (available to registered users; registration is free).

    The IRU/TransPARK information provides information for all parking, but those parks that have 24 hour guards are identified within the detail of each location it identifies.

    Where security is required, parking where guards are advertised is strongly recommended. It is also recommended that users check with any provider of information on secure parking as to the selection criteria applied and how the level of security is validated or audited.

    24 Hour Claims Hotline
    +44 7000 882582

    Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

    Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

    The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.