When is the freight forwarder liable as the carrier?
Forwarding contracts should never be equated with contracts of carriage (of persons or goods). In practice, these are two separate and distinct legal relationships that impose different rights and obligations on the parties to the existing obligation. However, can a forwarding agent be liable as a carrier? When such a situation may occur?
The contract of forwarding and carriage
Forwarding and carriage are regulated in detail in the Civil Code. Pursuant to article 794 of the Civil Code, by a contract of forwarding, the freight forwarder undertakes, against remuneration, within the scope of his activities, to forward or receive a consignment, or to render other services connected with its carriage. The Freight Forwarder may act on his own behalf or on behalf of the Customer. In turn, the article 774 of the Civil Code indicates that by the contract of carriage, the carrier undertakes to transport people or goods for remuneration within the scope of his company.
Both contracts belong to the category of named contracts, although in the case of the forwarding contract we deal with the so-called wider obligation. This is because carriage concentrates on the transport of a specific object or person, on delivering it from point A to point B, while forwarding includes a number of other additional activities, such as, for example, undertaking customs procedures, insuring shipments, or preparing transport documentation. The forwarding contract is therefore a much broader agreement than in the case of carriage.
Regardless of which of the above contracts we are dealing with, each of them defines the rights and obligations of the carrier and the forwarder. It turns out that the freight forwarder can be liable for his acts or omissions also as a carrier.
The Freight Forwarder’s Liability
The basic services of forwarders are:
- forwarding advice, which includes, inter alia, giving advice on transport preparation,
- monitoring of loading, handling and carriage of goods,
- selection of the means of transport,
- preparation and completion of documents,
- concluding contracts of carriage with carriers,
- insurance of goods.
Every action taken by the Freight Forwarder should be performed with due diligence, otherwise he may be liable to compensate the other party of the obligation. Pursuant to the provisions of art. 799 of the Civil Code, the freight forwarder is liable for carriers and sub-forwarders which he uses in executing his order, unless he is not at fault in their choice.
As noted by the Court of Appeal in Katowice in its judgment of 28 December 2017. (ref. no. V ACa 163/17), the freight forwarder is fully liable for carriers and, possibly, further forwarders which he uses in the execution of the order, thus he is liable for incorrect performance of their obligation by these entities in delivering the consignment to its destination and for damage to the substance of the consignment or its loss, unless he is not at fault in choosing the carrier.
Can a forwarder be liable like a carrier?
Pursuant to the provisions of Article 800 of the Civil Code, the freight forwarder may perform the carriage himself. In this case, the freight forwarder has, at the same time, the rights and obligations of a carrier. It clearly follows from the above that the freight forwarder may be liable as a carrier. It should be remembered, however, that in that case, a separate contract of carriage is not concluded. The Freight Forwarder’s liability is extended, however, it is not necessary to sign any additional agreements.
Generally, the freight forwarder is liable for the transported goods when he performs the service of carriage himself, assuming the rights and obligations of a carrier. A situation in which the freight forwarder renders a service of a complex nature, including carriage, may justify the necessity to use additional insurance, connected, from the point of view of the insurer, with an additional risk of damage occurring during the transport of the transported goods. This risk is the same regardless of whether carriage is performed by a forwarder-carrier or a separate carrier.
Article 788 of the Civil Code indicates the scope of the carrier’s liability for damages (and thus also the freight forwarder’s if he transported the goods himself) – the compensation for the loss, shortfall or damage of the consignment from the time of its acceptance for transport until its delivery to the consignee may not exceed the ordinary value of the consignment, unless the damage was caused by intentional fault or gross negligence of the carrier. The carrier shall not be liable for loss or damage not exceeding the limits set out in the relevant provisions, and in the absence of such provisions – the limits customarily accepted (this is called natural loss). For the loss of, or damage to, money, valuables, securities or other things of particular value, the carrier shall be liable only if the characteristics of the consignment were known when the contract was concluded, unless the loss was caused by the wilful misconduct or gross negligence of the carrier.