Lloyd's Maritime and Commercial Law Quarterly
BAILMENT’S CONTINUING ROLE IN CARGO CLAIMS
Simon Baughen *
Before the implementation of the Carriage of Goods by Sea Act 1992 (“COGSA 1992”), a cargo claimant who fell outside the provisions of the Bills of Lading Act 1855 was extremely unlikely to be able to make a successful recovery by non-contractual avenues such as bailment or negligence. In particular, the action in bailment, although routinely pleaded, seemed to add little to the cargo claimant’s arsenal. In most cases the right to sue in bailment would either accompany some contractual right of recourse, as with the implied contract in The Captain Gregos (No. 2)
1 or would not be established at all. Subsequently, COGSA 1992 has greatly expanded the classes of cargo claimant who can proceed contractually. Where a bill of lading, a sea waybill or a ship’s delivery order is involved, the problems of establishing a contractual right of action against the carrier are now largely resolved.
It would therefore be easy to conclude that non-contractual routes of recovery have largely become otiose. However, to do so would be a mistake as can be shown by the growing number of reported cases on recovery in bailment which are discussed later in this article. There remain two principal reasons why non-contractual routes for the recovery of claims will continue to be relevant, notwithstanding COGSA 1992. First, these actions may still be needed to prevent the residual class of cargo claimants who have no contractual recourse against the shipowner from falling into a legal “black hole”. Secondly, non-contractual actions should not become the means by which cargo claimants forgo their contractual rights of recourse by suing third parties non-contractually so as to make recovery in excess of that permitted by the terms of the relevant contract of carriage, and bailment reasoning may help here. The policy considerations were succinctly expressed by Lord Steyn in The Nicholas H,2 a non-bailment case, where they formed an important part of his judgment that a classification society owed no duty of care to the owners of cargo carried on board a vessel which it had surveyed,
The dealings between shipowners and cargo owners are based on a contractual structure, the Hague Rules, and tonnage limitation, on which the insurance of international trade depends … The result of a recognition of a duty of care in this case will be to enable cargo owners, or rather their insurers, to disturb the balance created by the Hague Rules and the Hague-Visby Rules as well as by tonnage limitation provisions, by enabling cargo owners to recover in tort against a peripheral party to the prejudice of the protection of shipowners under the existing system …
I shall now examine the question of how well the action in bailment satisfies these two policy considerations.
* Lecturer in Law, University of Bristol.
1. [1990] 2 Lloyd’s Rep. 395 (C.A.).
2. Marc Rich & Co. AG v. Bishop Rock Marine Co. (The Nicholas H) [1996] A.C. 211, 239D, and 240C.
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