Henrik Thal Jantzen, Hafnia Law, Denmark
In three recent judgements – the first one being delivered in August 2019 and the last one being delivered in April 2020 – the Danish Maritime and Commercial Court have addressed the question of gross negligence in accordance with the Danish CMR Act in relation to carriage of pharma products.
The first decision
In a decision from 7 August 2019 the owner of the goods had specifically agreed with the carrier that the vehicle, upon its arrival at the recipient in Sweden, should be parked at a specific parking space over night for the purpose of delivery the following morning. The carriage had been subcontracted by the carrier to a hauler, whose driver had parked the vehicle at the side of a road. During the night part of the pharma products were stolen. From the evidence of the case it was not clear whether the parking instruction had been passed on from the carrier to the hauler. The court found that parking in breach of a contractual stipulation in itself constituted gross negligence to the effect that the carrier became liable without a possibility of limitation.
The second decision
In a decision from The Danish Maritime and Commercial Court delivered on 25 November 2019, the court reached the same conclusion in relation to one of two carriages.
In this case the on-duty officer at the carrier’s terminal, where the trailer was waiting for discharge, had not reacted in spite of several temperature alarms from the trailer. The officer mistakenly thought the alarms set off due to the commencement of discharge. The court found that the failure to react constituted a serious neglection of the carrier’s responsibilities when handling fragile pharma products. As such the carrier’s omissions constituted gross negligence.
The third decision
The third case related to a reefer transport of pharma products, primarily insulin, that were to be transported from Germany via Greve in Denmark to Göteborg in Sweden. Due to a defect in the reefer’s temperature sensor, the goods were exposed to freezing temperatures, which lead to the goods having to be scrapped.
The carrier had previously during another carriage experienced a similar problem with a defect in a reefer’s temperature sensor. As such, the carrier had been recommended to have all the trailers inspected for similar defects. However, such an inspection had not been initiated in regard to the trailer in question, which – as it turned out – happened to be defective. Furthermore, it was discovered that the trailer had had a sudden drop in temperature approximately 1 month earlier, without the carrier having made any provisions to avoid recurrences. Finally, the carrier had not activated the temperature alarm right after loading, which was a requirement according to the carrier’s own manual. This meant that the drop in temperature wasn’t immediately discovered. Based on an overall assessment of the facts of the case, the Danish Maritime and Commercial Court found that the temperature damage to the pharma products was caused by the carrier’s exercise of gross negligence, and that the carrier should yield full compensation for the damaged goods.
The damage to the goods were caused by a defect in the reefer trailer’s cooling facilities. Thus, the trailer distribution agency was also held liable by the owner of the goods in accordance with the rules regarding product liability (distributer liability). The court reached the conclusion that the trailer distribution agency was liable in accordance with these rules. This is especially interesting because it opens for the possibility of receiving full compensation by directing a claim directly against the trailer distribution agency, even in cases where it might be difficult to prove that the carrier exercised gross negligence. The case has been appealed to the Danish Eastern High Court and is expected to be decided in early 2022.
Summary
In general, it is assessed that the responsibilities of the carrier are extended when handling temperature-sensitive pharma products of significant value. In many cases the carriers present themselves as experts in relation to the carriage of such products, which will also be a factor in the assessment of liability and gross negligence, and thus whether the carrier have access to limitation.
Ed. Note: Hafnia represented in all three cases the owner of the goods or the owner’s insurer.