TT Talk - Road liability exposure in the USA
Incident causation is never simple; over the road liabilities in the US now expose a broad range of supply chain stakeholders in potentially surprising ways.
Carriage of intermodal equipment by road is inevitably prone to the actions and behaviours of drivers, which sadly continue to give rise to serious losses. The most common errors include traveling at an unsafe speed (too fast or too slow), distracted or impaired driving, failure to stop or yield, and losing control of their vehicle. Adverse weather conditions (such as rain, snow, ice, high winds or fog) and driving during hours of darkness contribute to road incidents. These issues highlight the need for every driver to consider their actions and modify their behaviour consciously, recognising the associated risks.Unsafe speed
Many rollover incidents occur where the Motor Carrier has travelled at an unsafe speed. Similarly, there are also instances of rear ending third party vehicles. Most incidents involve excessive speed, but there are also serious risk exposures associated with travelling too slowly, resulting in the tractor and trailer being rear ended by a third party vehicle.
In isolation there should be no liability for the chassis Pool Managers if the accident occurs purely due to driver error. However, where injury claims are concerned, the stakes are high and the Motor Carrier's insurance limits are often relatively low.
Incident causation is typically a combination of factors. A Motor Carrier may be traveling too quickly, which is determined to be the proximate cause, but claimants will seize the opportunity to claim against the Chassis Owner, Pool Manager and possibly the Shipping Line where post incident investigations indicate, for example, that the chassis may have been defective.
Motor Carriers themselves may try to defend negligent acts by asserting that the chassis was defective in some way or that the cargo inside the container shifted. This may open the door for claimants to claim against additional entities, such as the Shipping Line, Shippers, NVOCs, Freight Forwarders or others involved in the supply chain.Distracted or impaired driving
The industry witnesses frequent incidents where a driver has been reportedly distracted or skills otherwise impaired. This includes the driver using a mobile phone, being tired, falling asleep at the wheel or being under the influence of alcohol/narcotics, seeTT Talk - Are you concerned about worker fatigue?
A related cause of loss is the failure to obey traffic laws such as running a red light, making improper turns, failure to stop or yield. Intermodal stakeholders need to be mindful that although it may seem clear that the driver was at fault, claimants may allege that others have breached their duty to the public, such as by allowing the chassis on the road due to some defect or improper maintenance, whether directly causative of the incident or not.Negligent Hiring/Negligent Selection
A developing risk exposure in this context is the hiring and selection of the Motor Carrier. In an effort to access additional defendants, claimants have been attempting to exploit a theory of liability, best described as negligent hiring or negligent selection of a Motor Carrier. This allegation asserts that other stakeholders, including Shipping Lines and Logistics Operators, have a duty to research and vet a Motor Carrier properly to ensure they only use one with an acceptable safety record.
Such is the prevalence of this liability argument that TT Club strongly recommends all stakeholders to research Motor Carriers' records and ensure that they appoint only safe and reputable carriers. Claimants may look at the safety record of both the Motor Carrier and the individual driver involved in a road accident. Claimants may also seek to access internal processes for hiring a Motor Carrier in an attempt to show that their selection process was flawed. All such tactics are aimed at implicating additional defendants and accessing greater settlement contributions.
“TT Club strongly recommends all stakeholders to research Motor Carriers’ records and ensure that they appoint only safe and reputable carriers”Statutory Employer/Agency
Additional creative legal theories to supplement the Motor Carrier's insurance policy include the Statutory Employer theory of liability. The basic premise is that the Motor Carrier is acting on behalf of another entity and that entity is liable for the negligent acts of the Motor Carrier. This other entity could be a Shipping Line, a Trucking Broker, Logistics Operator or any other entity which appoints or directs the Motor Carrier.
Claimants have argued that the controlling entity is liable under the legal doctrine of 'Respondeat Superior', which states that an employer is responsible for the actions performed by an employee during the course of their employment. In limited circumstances, some courts in the US have been persuaded by this argument where the operations of the Motor Carrier are directed in a significant way, such as . to the route to be taken, the time for delivery or other operational factors. In most instances, it is likely that there is insufficient control over the Motor Carrier for courts to determine that the other entity could be deemed the Statutory Employer.
Unfortunately, where a ruling is not made on such issues as described above, the matter may be sent to trial. Therein rests the difficulty in this type of case - where an initial ruling precluding such theories is not given, the defence will find themselves in the unenviable position of trying both to educate and persuade the jury. While the burden rests with a claimant to prove the case; juries in the US may have sympathy for an injured party and go out of their way to provide a substantial award regardless of whether there is any negligence on behalf of a more remote stakeholder.
We hope that you have found the above interesting. If you would like further information, or have any comments, please email us, or take this opportunity to forward to any colleagues who you may feel would be interested.
We look forward to hearing from you.
Risk Management Director, TT Club
25739 - TT_Talk_-_Edition_218__Chinese_ (396 KB)
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