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CMR-liability insurance

Carriers (and only road carriers) have liability for the goods they transport under the international CMR Convention. Such liability is fixed at 8.33 SDR per kilogram of cargo regardless of the real value of the goods. SDR is a currency unit used by the International Monetary Fund defined by converting the rates of four of the world’s strongest currencies and the rate of which is variable; currently 8.33 SDR is approximately EUR 9.53.
Carriers must compensate the owner for every kilogram of the cargo load if lost or damaged up to the maximum defined amount. The carrier therefore does not provide a full guarantee for the value of the cargo. Such damages must be covered by insurance.

Damages covered by insurance:

  • Liability for the partial or complete loss of a consignment
  • Liability for the partial or complete damage of a consignment
  • Liability for exceeding the delivery term specified under the CMR

Road carrier liability in domestic carriage

Liability in domestic transport is defined in §624 of the Commercial Code. Carriers are liable for foreign goods in-transit in their full amount. This means that if:

  • cargo is lost or destroyed, the carrier must compensate the owner for damages equal to the value of the goods at the time the consignment was accepted.
  • a consignment is damaged or destroyed, the carrier must pay the difference between the value of the cargo at the time it was accepted and its current value.

Insurance is not mandatory for domestic transport, but almost always necessary given the high level of risk. Domestic transport insurance covers the same damages as international transport insurance:

  • Liability for the partial or complete loss of a consignment
  • Liability for the partial or complete damage of a consignment
  • Liability for exceeding the delivery term specified under the CMR

Road carrier liability in cabotage

Liability insurance for cabotage is agreed with specific conditions. Such insurance is mandatory in many European Union countries and insurance is secured in higher amounts.

Carrier liability for damage or loss of goods

In the case of international road carriage, the carrier’s liability for damage or loss or goods in-transit based on a CMR consignment note is defined by the Convention on the Contract for the International Carriage of Goods by Road (CMR). Carrier liability is based on its basic commitment to complete the agreed carriage from the point of origin to the destination with due professional care and within the agreed or an adequate period of time and to turn the consignment over to the authorised recipient in intact condition.
The CMR Convention defines the carrier’s liability as such that the carrier is liable for the complete or partial loss of a consignment or for damage occurring from the moment the consignment is accepted for carriage until it is released to the recipient. The carrier’s liability is also defined for exceeding the delivery term.

Start of carrier liability

For the purposes of defining the road carrier's liability, it is important to determine the point at which such liability originates. With respect to damage to a consignment, its loss or an instance where the delivery term is exceeded, it is not possible to simply attribute fault to the carrier. It is common practice, however, to make the carrier responsible if a consignment is damaged when it is in the carrier's care without investigating its level of fault. The only way for a carrier to eliminate this burden is to claim extenuating circumstances, which are strictly defined in the CMR Convention. These are reasons that a carrier cannot predict in advance or damage that is unavoidable, such as a natural disaster. Neither the moment at which carriage begins nor the date on which the contract of carriage is signed is decisive for establishing the carrier’s liability. The important step is that the consignment be accepted for the purposes of completing carriage, as if the carrier accepts a consignment for any other reason, such as warehousing, it is not liable for the consignment in such case as the carrier, rather it is the storekeeper (subject to the Commercial Code in Slovakia).

End of carrier liability

Carrier liability does not end with the simple presentation of the consignment at the intended destination. The carrier's liability ends upon delivery of the consignment, which means the time at which it authorised recipient or its authorised representative takes actual control over the consignment. Here it is important to note that the carrier’s liability does not end if turned over to an unauthorised person. Carriage is only considered complete upon proper delivery of the consignment and completion of the contract of carriage, at which point the carrier is entitled to payment for carriage charges.

Carrier liability for damages

As noted, the carrier is liable for the complete or partial loss of a consignment or damage thereto occurring from acceptance of the consignment for carriage and ending upon its delivery, including if the delivery term is exceeded.
The carrier is not liable if the loss of a consignment, damage thereto or if the delivery term is exceeded results from:

  • a legitimate order issued to the carrier,
  • any reason other than carrier negligence,
  • an inherent defect in the consignment,
  • circumstances that the carrier is powerless to avoid or if does not have the power to mitigate the consequences thereof.

The carrier is not liable if the carried cargo is damaged during transport as a result of improper loading of the consignment by the consigner.
However, the carrier is not relieved of liability for a malfunction involving the vehicle user for transport, or through the intentional action or negligence on the part of the person from whom the vehicle was hired or their representatives or personnel. The carrier is also liable for the consequences of the loss or improper use of documents specified on the consignment note and attached to this note or provided to the carrier. The carrier’s liability is capped at the amount it would have to pay for a loss consignment if documents are lost or used incorrectly.

A carrier’s liability is waived under the CMR Convention if loss or damage occurs as a result of a special hazard related to one or more of the following circumstances:

  • use of an open vehicle without a tarpaulin if such use was explicitly agreed upon and specified in the consignment note,
  • missing or defective packaging for the consignment, which requires proper packaging, or if there is no such packaging and such consignment is exposed to loss or damage,
  • any handling, loading, storing or unloading of consignments conducted by the consigner or the recipient,
  • the inherent nature of the goods makes them susceptible to complete or partial loss or damage, especially breakage, corrosion, internal deterioration, drying out, and the like,
  • insufficient or incorrect markings or numbers on individual pieces in a consignment, transport of live animals.

Therefore, the carrier’s liability is waived in legal disputes in cases where the loss, damage or delay was the result of an inappropriate approach or negligence on the part of the consigner.

Extenuating circumstances

According to the CMR Convention, the carrier's liability is waived for damage to a consignment for reasons attributable to force majeure, which means for reasons that the carrier could not foresee or reasonably prevent. In practice, however, the courts have been very strict with respect to carriers and determination of extenuating circumstances, which is reflected in the following practical experience based on previous court decisions and verdicts.