The Rules… and unexpected exposures

As Mr Burns points out, the Rules run to 100 odd pages of marine law, and work in terms of the whole supply chain from point of origin to delivery, so covering a number of interested parties.

“Carriage liability regimes are at present covered by a patchwork quilt of conventions: most ship operators are covered by the Hague/Hague-Visby Rules which for over 80 years have defined the scope of ship operator’s responsibilities and liabilities, while inland road and rail carriage is covered by other conventions and standard industry terms,” he explains.

These inter-related regimes are well established – despite having inconsistencies and anachronistic elements (as they pre-date containerisation) – and are tried and tested. “They are the well-worn but impractical shoes used by the industry,” says Mr Burns, “everybody, shippers and operators alike, knows pretty much where they stand. By contrast, the new convention seeks to iron out the differences and cover the whole supply chain by one single overarching set of rules.”

Port operators will for the first time have a potential, legal liability towards goods’ owners, as they will be recognised as part of the supply chain under the somewhat hazy term ‘maritime performing parties’.

Mr Burns explains: “At present, operators tend to be governed by the ports’ own insurer-approved regulations and standard operating terms which, in terms of restricting liability are usually slanted in the ports’ favour. That could change under the new regime with new exposures to loss damage and delay claims.”

So the new rules, which contain elements of existing conventions (e.g. setting out standards of responsibility, limiting operators’ liabilities by reference to cargo weight and imposing time limits for bringing claims) could potentially have a very large impact on the industry.

But Mr Burns is relatively sanguine, and points out that most of the industry is adopting a wait and see approach, the feeling generally being that it is a little like watching a firework whose fuse has been lit but shows no sign of a bang – yet.

“Before coming into force the Rules will still have to be ratified by 20 countries, and will only then activate one year after the final signature, so it could all end up being a damp squib,” he says, citing other agreements which didn’t reach this ‘critical mass’ (like the Hamburg Rules, and the recent protocol to the Athens Convention which sought to increase ship operators’ limits of liability for passengers).