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Feb.22, 2016

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Q&A 52 THE JOURNAL OF COMMERCE FEBRUARY 22.2016 LOSS, DAMAGE AND LIMITATIONS Q: THE CARMACK AMENDMENT as applicable to motor carriers, 49 U.S.C. Section 14706(e), establishes a minimum period of nine months for the filing of loss-and-damage claims, and two years beyond a carrier's full or partial declination of the claim for the filing of a lawsuit. If a shipper doesn't file a freight claim with the carrier within the nine- month time limit, does this generally bar any recovery on its part? If the ship- per doesn't file a freight claim within the nine-month time limit, is it thus barred from the filing of a civil action against the carrier? Must a timely filed freight claim (within nine months) precede the fil- ing of a civil action under the two-year limitation? Is a shipper free to pursue a civil action against the carrier instead of submitting a written claim to the car - rier? If so, what's the time limit? A: THE ANSWER TO your first ques- tion is an unequivocal affirmative. "Before the owner of goods lost, damaged or delayed in transit may recover economic damages from the carrier, he must timely file a claim. Failure to do so within the time specified in the contract of carriage destroys the claimant's right to any recovery, even if the carrier is oth- erwise legally liable." See page 233 of my "Manager's Guide to Freight Loss and Damage Claims" (Fort Val- ley, VA: Loft Press, 3rd ed., 2003. If that strikes you as unfair, well, tough potatoes. The law places time limits on most legal "causes of action," even on bringing charges for most crimes (the most commonly cited exception being murder). These time limits — called statutes of limitation — aren't especially onerous. They allow plenty of time in the ordinary course of events for an injured party (or the state, in the case of criminal activity) to recog- nize his injury and decide to take legal action. But the law recognizes that in most cases there has to be some limit to how much time can be allowed between an event and legal charges arising from that event. Memories fade and documents can't be kept forever, for example, and the idea of holding someone indefinitely liable for occurrences of the distant past is inconsistent with the freedom that the Constitution guarantees all Americans. In the case of freight loss and damage claims, nine months seems an appropriate time limit for the shipper or receiver to ascertain that his goods have gone missing or been damaged in the course of movement. If you haven't figured it out by that time, I think it's pretty arguable that the goods weren't very important to you to begin with. So once that time has elapsed, you no longer can hold the carrier liable for the loss or damage unless you've filed your claim timely. As for your second and third questions — they're basically the same question with slightly differ- ent slants — of course you can file a lawsuit instead of a claim, although it's beyond me why you'd want to do such a thing. "Th(e) requirement (for filing an L&D claim with the carrier) may also be met … by institution of a lawsuit within the … time period (for the filing of claims)." Manager's Guide, id. "(But it's) obviously foolish to take on the costs and burdens of filing legal action where the mere filing of a claim may accomplish the purpose as effectively (and the right to sue is, of course, held in reserve)." In fact, I can't remember run- ning across a ca se in which a shipper has opted to sue imme- diately in lieu of filing a claim. I suppose you might want to do so if you feared the carrier and/or its insurer were verging on bank - ruptcy and thus might be unable to pay a judgment rendered later. Even so, predictable delays in the legal process likely would make this effort pragmatically useless. So it's difficult for me to imagine circumstances that might sensibly mitigate such a course of action. Furthermore, as I wrote in the book, an immediate lawsuit has the draw- back of generating legal fees that will be unrecoverable even if the shipper wins a favorable judgment. Still, you can properly sue, instead of filing a claim, if you choose, provided you get your lawsuit filed within the nine-month claims filing limit. Service of the court complaint will satisfy the requirements of a claim. JOC Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010. By Colin Barrett In the case of freight loss and damage, nine months seems an appropriate time limit.

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