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Client is an owner/operator of a vehicle recovery and tow business. He never tows on a hook. All carriages are on a flat deck truck or trailer. The vehicle is winched on to the flat-deck or trailer for the purpose of loading and unloading.

His carriers' liability policy will cover goods for carriage including loading and unloading subject to the limitations in the Contract and Commercial Law Act 2017.

Example: The insured recovers a vehicle from the roadside at 22:00 on a Saturday. The insured stores the recovered vehicle in a secure yard before continuing the carriage on to the agreed consignee's requested destination at the next available opportunity.

Is the stored vehicle still under a contract of carriage whilst stored and therefore subject to the contracts and commercial law act limitations or is the stored vehicle a bailee©s liability risk?

Reply: Crossley Gates

If the contract of carriage requires the client to deliver the car to a named consignee, the limitations in the act continue to apply until delivery to that consignee. If, during the carriage, the car is stored for a period of time, this doesn't alter the position.

Technically, the carrier is still a bailee and faces potential bailee's liability, it’s just when this involves the carriage of goods and the act applies, the limitations in that act override the common-law of bailment.

Pauline Davies, of Fee Langstone, adds: According to the only couple of cases on the point, it is fact-specific in every case as to whether time in storage will cause the contract of carriage to be suspended (in which case the ordinary rules of bailment or contract terms governing storage will apply), or whether the storage should be treated as an incidental part of the transit (in which case the act will continue to apply). 

The answer is not dependent on whether or not there is a named consignee - in fact, in both the cases mentioned above there was a named consignee but the carrier, on the facts, was still held to be a bailee.

On the facts provided, the time delay was very short and apparently occurred because the pick-up was late at night, presumably making it impractical or impossible to complete the transit straight away. That being so, it seems clear that storage was merely incidental to the transit and therefore the act will apply. 

It would be different if the car was collected by your client, and the consignee requested that it be held indefinitely or for some lengthy period of time. In those circumstances the contract of carriage would be considered as having been suspended and your client would be treated as holding the vehicle as a bailee only. The contract of carriage would then re-commence when the vehicle eventually started on its way again.

There is no hard and fast rule that can be applied to situations like this. The test is that "it is an assessment of the totality of the factual position. It involves asking the simple question, on a fair reading of the facts, was what occurred part of the transit".

June 2019

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