Defences and
Limits of Liability
Just because a third party has caused losses or damages to a company’s goods or property, does not necessarily mean that they are liable for those losses and damages. In addition, if the third party is liable for an incident, it does not necessarily mean that they will be liable for the quantum of all the losses arising from the incident. In claims against third parties for losses and damages to goods and property, the third party can have defences to liability and also can seek to rely upon limits of liability. These defences and any such limits of liability will be dependant upon the type of claim, any applicable contract with the third party, the circumstances surrounding the claim and the applicable jurisdiction for the claim.
Generally, the defences available to a third party are there to protect them in circumstances where a loss has occurred that is outside of the responsibility and control of the third party. For example, most types of claim enable a third party to be able to seek to defend liability for an incident on the basis of "Act of God". However, in order to definitely be able to rely upon a defence, it needs to be established that the actual cause of the loss falls within the scope of the defence. If a third party seeks to rely upon a “Act of God” defence on the basis of, say, bad weather conditions, it would need to be established that the weather conditions were definitely causative rather than say inadequate securing of the goods by the third party or say the poor condition of a warehouse in which the goods were being stored by the third party. In addition, in many instances claims can have a connection with more than one jurisdiction. The third party may be able to defend liability for a claim in one jurisdiction, but unable to defend liability for the same claim in a different jurisdiction.
As previously mentioned, even if a third party is liable for a claim, it does not mean that they are going to be liable for the quantum of all the losses arising from the claim. There is an onus upon a company suffering a loss to take all reasonable steps to mitigate/minimise that loss, even if the incident were caused by a third party. If a loss has increased due to a failure of a company to take reasonable steps to mitigate, then the third party can escape liability for such increased losses. In addition, some losses may be deemed consequential in nature and not closely enough linked to an incident to be recoverable from any third party liable for the incident. Finally, a third party may be entitled to limit the quantum of their liability for losses arising as a result of an incident. Generally, such limits of liability are based upon the weight of the effected cargo or property and/or the number of packages involved. This can raise very complex issues, particularly for claims with connections to different jurisdictions. Different jurisdictions can adopt different decisions with respect to whether any limit of liability applies to a certain type of claim and, if so, whether the third party will be entitled to such a limit given the circumstances surrounding the actual claim.
As outlined above, establishing liability and the quantum of any such liability against third party responsible for an incident can be very complex and also involve a considerable period of time and resources. In addition, it is essential that steps are implemented as soon as possible after an incident occurs in order to ensure that a company’s interests are as well protected as possible. The team at Stean Shaw LLP can assist and has extensive experience and expertise in the handling, resolution and recovery of all types of claims arising all over the world. We also have an extensive network of contacts throughout the world with whom we can liase in order to ensure the best outcome for our clients. Since we act on a “no win – no fee” basis, there is no cost “upfront” to our clients by using the services of Stean Shaw LLP and a charge will only be made by us when we succeed in obtaining a recovery for our clients.
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| If you have any enquiries about Stean Shaw LLP, our services and fees, or questions on claims, defences or limits of liability, our team would be happy to hear from you through our listed contact details. Alternatively, use our contact page. | ||
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