The forwarder is responsible for fraudsters (case study)
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You are a forwarder. You accept a transport booking and address it to the carrier. After a while, you check whether the shipment has come to the destination place and you are sure. You are sure that you’ve been fooled. You’re opening the mailbox, and you’ve got a claim.
Now, you are wondering how to get out of the case.
Some forwarder accepted an order for the transport of 6 copper coils from Slovakia to Hungary and commissioned it to a haulier. Unfortunately, it turned out that the freight fell into the hands of fraudsters who impersonated a legally operating carrier of good repute. The forwarder checked the documents he had been given but failed to check for verification.
A few days later, the forwarder received a claim, based to article 3, 17 and 29 of the CMR Convention. The key here is Article 3. In accordance with Article 3, the client shall be fully liable for the acts or omissions of his subcontractors.
Should the forwarder be liable if he has been the victim of a perverse fraud? Or should he suffer the consequences of his recklessness? How do you bet?
The case went to the Duisburg District Court in Germany. The forwarder defended himself stating that he was deceived. The scammers gave him documents that were either copied or stolen from the road carrier.
The court found the forwarder liable for loss as a result of gross negligence. What mattered to the court was that the freight forwarder did not check the carrier well enough.
The defendant appealed to the Higher Regional Court in Düsseldorf, which upheld the first-instance decision. But this court used a slightly different argument because it found that the fraudulent carrier was, in fact, his agent for which he is responsible according to Article 3 of CMR Convention.
The appellate court didn’t analyze whether the defendant had acted grossly negligent. Since it was undisputed that the goods were stolen during transport, it was an intentional act for which the defendant was liable following already mentioned Article 3.
This judgment has a deep sense and is in line with the spirit of the CMR Convention and the goal it carries – the unification of rules on the transport of goods. Article 3 of the CMR Convention does not mention the need for a contract between the principal and subcontractors. If it was assumed that such an agreement was necessary, then this would lead to legal chaos, because in each country, the issue of the contract with the fraudster is regulated differently; therefore, the judgments of individual national courts would be completely different, which in time, would lead to considerable confusion and lack of certainty as to the content of the law.