CMR liability and CMR

Less damage

While the number of thefts, robberies, wrong deliveries, fraud and fake carrier cases has risen enormously in recent years, the number of cases of damage to transported goods has gradually decreased over the last few decades. This is not only due to innovative packaging solutions and better equipped vehicles in terms of load securing, but above all to an increase in awareness among shippers, carriers and their drivers. One reason for the increased risk awareness has long been the stricter legal framework, which ranges from road traffic regulations to accident prevention regulations and dangerous goods regulations, whereby, depending on the severity of violations, the sanctions can extend to the application of criminal law provisions, e.g. if people are injured or killed due to goods falling from a truck. For this reason, shippers and carriers are also paying increased attention to proper load securing. As a result of this and improved packaging systems, the number of damaged goods is constantly falling. Nevertheless, there are still numerous such cases, which raise many questions in connection with the CMR.

Calculation of compensation

1. Art. 25 CMR reads as follows:
2. In the event of damage, the carrier shall pay the amount of the depreciation calculated on the basis of the value of the goods determined in accordance with Article 23, paragraphs 1, 2 and 4.
3. However, the compensation shall not exceed

• a) if the whole consignment is devalued by the damage, the amount which would be payable in the event of total loss;
• b) if only part of the consignment has been devalued by the damage, the amount that would be payable in the event of loss of the devalued part.

No reimbursement of repair costs

Item 1 of this provision uses the term "depreciation" (in German). It is therefore not a question of compensation for repair costs. Only if the reduction in value cannot be determined or cannot be clearly determined can the repair costs be an indication of the reduction in value.

The reduction in value is to be calculated in accordance with the principles laid down in Art. 23 CMR for loss damage, whereby reference is made to paragraphs 1, 2 and 4 therein.

Place of departure is decisive

Art. 23 (1) CMR reads:

(1) Where, under the provisions of this Convention, the carrier is liable to pay compensation for total or partial loss of the goods, the compensation shall be calculated according to the value of the goods at the place and time at which they were taken over for carriage.

Thus - due to the reference in Art. 25 (1) CMR to Art. 23 (1) CMR - the value of the goods at the place of departure and at the time of acceptance is also decisive in the event of damage. At first glance, this regulation seems illogical and, for reasons of "fairness", one is inclined to use the value of the goods at the place of delivery and at the time of delivery. Apart from the fact that in some cases damaged goods do not even reach the intended place of delivery, the text of the CMR does not specify such a calculation method.

Health value/sick value

Rather, the difference between the value of the goods in undamaged condition at the time of acceptance at the place of departure ("sound value") and the fictitious value of the goods in damaged condition at the place and time of acceptance for transportation is to be calculated.

This provision is based on a lump-sum compensation of the value of the damage caused by the damage. As already explained, repair costs are therefore not to be reimbursed; a replacement value cannot be used either and in rem restitution is also excluded - as in the case of loss.

The difference between the salvage value and the damaged value is not always easy to calculate and often requires the assistance of an expert. Often only repair costs are stated in average reports, which can lead to unpleasant disputes. Average adjusters and surveyors should therefore be instructed by their clients to calculate the reduction in value on the basis of the healthy and sick value as described above. Lutz Assekuranz, for example, ensures that calculations in expert opinions reflect the provisions of the CMR.

What price?

As Art. 25 (1) CMR also refers to paragraph 2 of Art. 23 CMR, the exchange price, or in the absence of such a price, the market price, or in the absence of both, the value of goods of the same type and quality, is to be used. It is also important to note that the respective stage of trade at which the goods were at the time and place of takeover is taken into account. The producer's output value will generally be lower than the price at which an end consumer would purchase the goods at the point of departure. And there are often several stages of trade in between (wholesale trade, retail trade, etc.).

Art. 25 (2) CMR stipulates that - to put it simply - the compensation for (partial) damage may not be higher than the compensation for (partial) loss.

Value-increasing factors

Art. 23 (4) CMR, to which Art. 25 (1) CMR also refers, states:

4) In addition, freight, customs duties and other expenses incurred on account of the carriage of the goods shall be refunded - without further compensation - in the case of total loss in full, in the case of partial loss on a pro rata basis.

This provision is to be seen as compensation for the fact that the value of the goods at the (intended) place of delivery is not taken as the basis for compensation.

Freight

Freight - if prepaid - is not to be reimbursed under the aspect of "damages", but under the aspect of "unearned wages" (at least if the law of a country in which the wages are not due even if the work has not been completed applies), so that this is usually a personal loss of the carrier, which, if not agreed separately, is not reimbursed by the CMR insurer.

Customs duties

If customs duties or other charges (e.g. for excise stamps or stamps) are paid in advance before the goods are taken over at the place of departure, these are already included in the value of the goods at the place of departure at the time of takeover and are then to be taken into account under the aspect of Art. 23 (1) and (3) CMR in conjunction with Art. 25 (2) CMR - and not as falling under Art. 23 (4). If there is a case of Art. 29 CMR (gross negligence), the limitation of liability of Art. 23 (3) CMR is not applicable, which then leads claimants with high-value goods or goods subject to high prepaid charges to attempt to obtain full compensation via this detour. Articles 24 and 26 CMR may also play a role in this context.

Other costs

In addition, other costs incurred in connection with the carriage of the goods must be reimbursed without further compensation. The phrase "on the occasion of the carriage" is essential here. This is not about costs incurred "on the occasion of the damage". Therefore, only those costs are to be reimbursed that would also have been incurred in the case of damage-free transportation. Naturally, this does not include costs for repackaging the goods as a result of damage, storage, damage assessment, return transport to the place of dispatch and the like. However, case law usually considers damage assessment costs to be reimbursable if they also serve to minimize the damage, e.g. sorting damaged and undamaged goods, if this is the only way to determine the damage.

Does the insurance reimburse costs?

Depending on how the insurance conditions are structured, CMR insurers will, however, reimburse the costs of averting, mitigating and ascertaining damage, the costs of salvaging the cargo, reloading, temporary storage and the additional costs of onward transportation to the original destination; subsidiarily - up to certain sums - often also the costs of removal, disposal and destruction of the goods, if this is carried out on the basis of statutory regulations or official requirements. Customer-friendly insurance conditions, such as those used by Lutz Assekuranz, provide for this in any case.

Accumulated losses

Finally, it is worth mentioning that damage (e.g. as a result of an accident) can also lead to delivery deadlines being exceeded. In such cases, both the damage to the goods and the damage caused by the delay must be compensated under the CMR provisions.

The highly complex and complicated subject matter, which has only been outlined briefly above, requires genuine specialists, such as those who have been employed by Lutz Assekuranz for decades and who are always available to answer inquiries and conclude insurance contracts.