IMPLICATIONS OF RECENT DECISIONS; EFFECT OF CONFLICT OF LAWS UNDER BILL OF LADING CONVENTIONS

Where one is to deal with a subject having to do with recovery actions in the United States of America, it is probably useful to briefly review the legal basis of claims under bills of lading. At common law, both in the U.S. and in England, a common carrier by water was virtually an insurer of the cargo entrusted to his care for transportation.1 In point of fact, the only exceptions to a carrier’s insurer liability were such things as Act of God, the Public Enemy, the Public Authority, Fault of the Shipper and Inherent Vice. In the latter part of the 18th century, however, and extending into the first part of the 19th century, it became very much in vogue for carriers, in an attempt to minimize this insurer liability, to insert in bills of lading various exceptions from liability, which under the guise of contractual terms would tend to mitigate liability. We find that in those early days the exceptions set forth in the bills of lading were considered valid in English and European courts with the result that the courts of the U.S., which were charged with the responsibility of dealing with such problems and which had a tendency to follow the attitudes expressed in England, afforded carriers the opportunity of avoiding liability or at least detracting from their insurer liability by use of a wide variety of exculpatory clauses. As the body of law in the U.S. concerning cargo recovery actions developed, however, and particularly in the U.S. Federal Courts, there was a tendency to hold that the exceptions from liability, as set forth in bill of lading clauses to which resourceful shipowners resorted, were valid only to excuse the carrier from liability to furnish a seaworthy vessel.2

The frustration with which cargo interests must have been concerned in those days