Navigating claims: optimising incident response in the global supply chain

Effective incident response is paramount in the global supply chain, as it can significantly impact the ability to defend against claims. In this article, we delve into the insights shared by Andrea Gentile, a Senior Claims Executive at TT Club, on the importance of prompt and comprehensive actions taken by members when faced with incidents.

Timely reporting and investigation

Prompt reporting of incidents to the insurer is crucial, as it allows for immediate investigation by a surveyor. This process includes securing CCTV footage and obtaining statements, which are essential for assessing the condition of the cargo and building a strong case.

Engaging all parties

The CMR Convention and national laws often require the involvement of all parties in the supply chain, including the customer, the customer's customer, and any subcontractors. Failure to engage these stakeholders can result in the rejection of recovery claims, particularly in Eastern European countries where there is a greater reluctance to cooperate.

Consequential losses and the importance of quick action

Delayed response to incidents can lead to consequential losses, such as the full disposal of perishable goods or increased electricity bills for reefer trailers. Prompt decision-making is crucial to mitigate these secondary losses that result from the initial incident.

The challenge of secure parking

The CMR Convention does not provide clear guidelines on what constitutes "safe parking," leaving carriers vulnerable to liability if they make even small mistakes. The approach taken by courts can vary significantly between countries, with some being more favourable to carriers (e.g., the Netherlands) and others more protective of cargo owners (e.g., Germany).

Contractual provisions and the liability regime

Contractual terms and conditions, in addition to the CMR Convention, form the liability regime that governs incident response. These provisions may require specific actions, such as mitigating losses for temperature-controlled cargo, and failure to comply can expose the carrier to full liability.

Navigating jurisdictions and seizing the appropriate court 

The CMR Convention provides multiple options for determining the appropriate jurisdiction to seize a case, with the first choice typically being the court where the incident occurred. However, carriers may have an interest in seizing a court in a more carrier-friendly jurisdiction to limit their liability, which can create tensions with their customers.

Conclusion 

Effective incident response in the global supply chain requires a comprehensive understanding of the legal frameworks, contractual obligations, and the diverse approaches taken by different jurisdictions. By prioritising prompt reporting, engaging all stakeholders, and navigating the liability regime, supply chain participants can optimise their chances of successfully defending against claims and minimising the impact of incidents.