A freight claim is a breach of contract claim that the shipper or consignee can make against the transporter or carrier for damage, loss, or shortage. The legal concept is for the shipper to be “made whole” or to be put into the same place he/she would have been, had the shipment occurred as planned. In this article, freight claims, we take a look at the options open to you if you find yourself in this position.
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What are the obligations of the transport company?
It is important to understand that when involved in a freight claim, the claim is based upon a breach of contract by the carrier. Whether or not the carrier was negligent does not come into question. This arises out of the fact that the essence of a transportation contract is that the carrier agrees to move a piece of cargo from point A to point B. In return, the shipper agrees to pay the carrier.
Implicit in this arrangement is that the cargo will indeed arrive at the destination in an undamaged condition. When the cargo is lost or damaged, the basic contract for carriage has been breached, giving rise to the shipper’s claim.
The contract for carriage can either be an individually negotiated contract between the shipper and the carrier or, if there isn’t one, the bill of lading, waybill, ocean bill, or other document issued by the carrier. These bills will usually contain the carrier’s terms and conditions.
In order for a claim to be successful, the claimant has the initial burden of proving its claim. The claimant must prove that the goods were in sound condition at the point of origin, damaged condition at destination, and the amount of its damages.
Does the method of shipping play a part in determining the outcome of a freight claim?
The mode of transportation will affect the rules governing a potential claim. Motor, rail, inland water, international ocean, domestic air, or international air all have different time limits for filing claims and different deadlines for initiating litigation if a claim is denied.
At one time the majority of carriers only operated in one particular mode. Now, many entities operate in more than one mode. Consequently, an important initial step in analysing any claim is to determine which mode the carrier was operating in at the time of the loss and thus which liability regime would apply. This can be very challenging for international movements involving multiple carriers and various modes.
Making a claim
Irrespective of the mode of transportation involved, the first step to recover a loss is the filing of a claim. The purpose of the claim is to put the carrier on notice of the facts relating to the damage or loss so that the carrier may investigate the claim and make a decision whether to pay it, contest it, or offer a compromise amount in settlement.
It should be remembered that the timely filing of a claim is a prerequisite for any later litigation.
When there is no individually negotiated contract in place between the shipper and the carrier, the claimant must look at the carrier’s tariff provisions very carefully to see if that carrier has specific filing requirements.
Also, it is very important that the claim be filed with the transportation carrier, as opposed to the insurance carrier. A claim filed with the insurance carrier, rather than the carrier providing the transportation service, is not considered a duly filed claim for purposes of meeting the claim filing time limit.
Each carrier usually provides a standard form specifically for filing freight claims. However, by law, no particular form is necessary, as long as the following four details are present:
- The shipment must be specified
- The loss or damage type must be specified
- The total of the amount claimed must be specified
- A clear demand for payment must be present
Information to identify the shipment may include the freight bill, the vehicle number, and the delivery date.
In addition to this basic information, the following documentation should also be provided:
- Shipment invoice
- Delivery receipt
- Bill of lading
- Invoice showing the value of the product being claimed
- Invoices for costs incurred (i.e. repairs or replacements of the product)
Additional supporting documentation may also be included or required.
How we can help
We have a proven track-record of dealing with litigation involved in a freight claim. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact our Commercial Litigation Solicitors
It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of reducing risk, saving you money and ensuring you achieve a positive outcome.
To speak to our Litigation solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online enquiry form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.