Appeal court confirms important decision on carriage of pharmaceuticals
The Court of Appeal has just confirmed the latest judgment on damage to pharmaceuticals during road carriage. This decision confirms central principles on proof of damage to such goods and gross negligence in the case at hand. The court also confirmed product liability for the lessor of the carrying trailer and is, so far, a rare instance of product liability applied in transport law matters.
Last week the High Court of Appeal, Eastern Division, has confirmed a decision of the Maritime and Commercial High Court of 22 April 2020.
The case concerned an international road carriage of pharmaceuticals. Due to an error in the temperature sensors in the carrying trailer the air in the trailer was cooled below freezing point for a relatively short time period. The cargo owner, however, had to dispose of the pharmaceuticals as the terms of the marketing permission for the products were breached and it could not be ascertained whether this had an impact. The cargo insurers paid the claim, and the court case concerned the recovery claim against the carrier and the leasing company that had provided the defective trailer.
The Court of Appeal agreed with the Maritime & Commercial High Court that the temperatures had rendered the products unmarketable, and this was sufficient that they were a total loss. The court also agreed that the carrier had acted grossly negligent so that the carrier could not limit liability under the CMR. This was due to several issues that the court disapproved of. As a professional the road carrier knew the strict temperature regime applicable to the carriage. Shortly before the carriage in question the carrier had experienced a similar problem and therefore knew of the risk of this type of temperature damage, and the carrier had been advised that the temperature sensors had been fitted inappropriately without taking any action. Electronic alarms in the trailer and quality assurance procedures had been ignored, and the carrier had ignored advising the cargo owner when the temperature problem arose.
The leasing company was liable under Danish law on product liability as the party marketing the trailers/sensors because the sensors has been installed incorrectly.
However, the carrier had to indemnify the leasing company due to an exclusion of liability term in the leasing contract.
IUNO's opinion
IUNO believes that the series of errors committed by the carrier had to lead to unlimited liability. The possibility of invoking product liability should be considered in the future and freight forwarders may wish to check whether leasing contracts they have may expose them to liability for defective trailers. Finally. the judgment is interesting because the court confirms that pharmaceuticals can be damaged at law in the sense that they cannot be sold, even if it is unknown whether they are actually damaged because of a temperature irregularity. The safety of patients comes first.
[The High Court of Appeal, Eastern Division, has confirmed the Maritime and Commercial High Court's decision of 22 April 2020 (Case BS-18510/2020-OLR - FED 2020.40)]
Last week the High Court of Appeal, Eastern Division, has confirmed a decision of the Maritime and Commercial High Court of 22 April 2020.
The case concerned an international road carriage of pharmaceuticals. Due to an error in the temperature sensors in the carrying trailer the air in the trailer was cooled below freezing point for a relatively short time period. The cargo owner, however, had to dispose of the pharmaceuticals as the terms of the marketing permission for the products were breached and it could not be ascertained whether this had an impact. The cargo insurers paid the claim, and the court case concerned the recovery claim against the carrier and the leasing company that had provided the defective trailer.
The Court of Appeal agreed with the Maritime & Commercial High Court that the temperatures had rendered the products unmarketable, and this was sufficient that they were a total loss. The court also agreed that the carrier had acted grossly negligent so that the carrier could not limit liability under the CMR. This was due to several issues that the court disapproved of. As a professional the road carrier knew the strict temperature regime applicable to the carriage. Shortly before the carriage in question the carrier had experienced a similar problem and therefore knew of the risk of this type of temperature damage, and the carrier had been advised that the temperature sensors had been fitted inappropriately without taking any action. Electronic alarms in the trailer and quality assurance procedures had been ignored, and the carrier had ignored advising the cargo owner when the temperature problem arose.
The leasing company was liable under Danish law on product liability as the party marketing the trailers/sensors because the sensors has been installed incorrectly.
However, the carrier had to indemnify the leasing company due to an exclusion of liability term in the leasing contract.
IUNO's opinion
IUNO believes that the series of errors committed by the carrier had to lead to unlimited liability. The possibility of invoking product liability should be considered in the future and freight forwarders may wish to check whether leasing contracts they have may expose them to liability for defective trailers. Finally. the judgment is interesting because the court confirms that pharmaceuticals can be damaged at law in the sense that they cannot be sold, even if it is unknown whether they are actually damaged because of a temperature irregularity. The safety of patients comes first.
[The High Court of Appeal, Eastern Division, has confirmed the Maritime and Commercial High Court's decision of 22 April 2020 (Case BS-18510/2020-OLR - FED 2020.40)]
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