The Road Haulage Association have introduced a major update to their Conditions of Carriage
The Road Haulage Association (RHA) have introduced an updated version of their Conditions of Carriage.
These Conditions are widely recognised as the industry standard, and provide a framework which regulates the contract between hauliers and their customers. They protect carriers by limiting or excluding liability, and imposing time limits for bringing claims. By incorporating these Conditions, members of the RHA manage some of the legal risks associated with carrying goods for their customers.
What are the key changes?
The recent revision includes a number of changes which provide added protection to hauliers. A brief summary of the key changes is as follows:
- The period of transit is redefined as commencing after the consignment has left the premises from which they were collected and ending upon arrival at the place of delivery, with the customer having risk in the goods outside this period (clause 7).
- The list of excluded liabilities has been expanded, to include contractual penalties, loss of profits, and other types of consequential loss (clause 12).
- A new definition of force majeure has been introduced to exclude the carrier’s liability in certain defined situations (clause 10.2(c).
- Risk for loading and unloading has been placed with the customer /consignor /consignee by default. The carrier is excluded from being found liable for loss or damage done to goods that arise from the loading onto or unloading off the vehicle or from overloading the vehicle. Under these terms the customer would also indemnify the carrier against any loss, damage, death or injury that might arise during loading and/or unloading.
- The term ‘demurrage’ has been clarified to take account of extra costs which carriers may wish to charge as a consequence of the detention of a vehicle (clause 1; see also clause 16).
- A new requirement for the customer to pay the carrier’s incurred costs and expenses in the event of cancellation has been introduced (clause 9(5).
- There is a new clause requiring the customer to provide warranties in respect of the safety of the consignment.
- The Lien clause has been made clear so that there is no doubt that the carrier has the right to hold the goods and sell them on.
Further information is available on the RHA web site: https://www.rha.uk.net/news/2020-09-september/updated-conditions-of-carriage-from-the-rha
Why is this important from an insurance perspective?
This change is important from an insurance perspective as insurance premiums and cover for hauliers reflect these conditions of carriage. It is important for hauliers to manage their contractual liabilities as effectively as possible to limit claims, and to ensure their broker is aware of the contract they are using.
What should RHA members do now?
If you are an RHA member (note only RHA members are authorised to use the Conditions -unauthorised use can lead to infringement of copyright and possible legal action) you should:
- notify your broker if you propose to adopt this latest edition of the RHA Conditions of Carriage
- incorporate these terms into all your consignment contracts, making it explicitly clear to your customers that you will be using these terms and conditions when carrying or storing goods.
- Your broker will then advise your insurer of this change so that it can be reflected in the cover and terms of your insurance.
Note we recommend that hauliers seek professional legal advice before making or agreeing any variation in the conditions to meet special circumstances, and that you advise you broker where variations are introduced.