January 3, 2024         Martindale-Hubbell® Silver Client Champion Badge

For the Seventh Consecutive Year, Martindale-Hubbell Awards Paul Stewart the 2024 Silver Client Champion Award

The Award highlights include 100% recommendations from all clients submitting reviews, and a 5.0/5.0 rating on all client ratings of all legal service categories by the Paul Stewart Logistics and Transportation Law Firm.

Client Reviews 

 100%(5 recommendations)
 5.0/5.0(5 reviews)
Martindale-Hubbell® Silver Client Champion Badge
  • Communication

    5.0/5.0

  • Responsiveness

    5.0/5.0

  • Quality of Service

    5.0/5.0

  • Value for Money

    5.0/5.0

  • Recommended  5.0/5.0 Rated on 10/28/13 in Debtor and Creditor.

    Very pleased, and will use him again!

  • Recommended  5.0/5.0 Rated on 10/11/13 in Corporate Law.

    Mr. Stewart functions in a very professional manner and in my opinion is the “best” transportation attorney that I have encountered in my 41 years in the transportation business.

 

January 12, 2021

Firm Recovers More than $350,000 in Commissions Owed to Terminated Sales Agent

Our firm recently received mediation settlement award for a 3PL salesperson in an amount which may not be disclosed, exceeding $350,000 in total recovery of sales commissions.  The lawsuit was filed more than 2 years ago, seeking commissions allegedly due at the time of termination and seeking continuing commissions on accounts procured by the client.

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January 3, 2017

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October 1, 2016

Highest Possible Rating By Both Bar and Judiciary….2016

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August 22, 2016

Martindale-Hubbell Client Distinction Award

 

 

Client Distinction Award

 

An award that goes to only Top 1% of national attorneys.

Rated 5 out of 5 for;

  • Quality Service
  • Overall Value
  • Responsiveness
  • Communication Ability

Proudly and humbly accepted, with thanks to all Clients!

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December 6, 2015

FAST Bill Signed into Law, Requiring FMCSA to Remove CSA Scores From Public View Until Validated

FAST Act highway bill signed by President Obama, FMCSA takes down CSA scores

We started in this effort with the initial article:  https://y6u52f.a2cdn1.secureserver.net/wp-content/uploads/2014/02/Jnl-Tran-Mgt-Stewart-CSA-Vol-22-No-2-Print.pdf

 

 

July 29, 2015

Latest Martindale-Hubbell Survey of Clients and Peers has awarded Paul Stewart Distinguished Category of Peer and Client Ratings of 5.0/5.0.

 

March 9, 2015

Martindale-Hubbell Awards Client Distinction Award to Paul Stewart

Client-Distinction-Award1 (1)  (See Award)

February 19, 2015

BROKERS, FORWARDERS AND CARRIERS SHOULD CLOSELY REVIEW TRANSACTIONS WITH INTERMEDIARIES SUCH AS 3PLS AND OTHERS WHO MAY BELIEVE THEY ARE NOT REQUIRED TO BE LICENSED

While regulation of property brokers has been statutorily prescribed since 1935, for just as long, various logistics service providers have arranged, negotiated and provided brokered motor carrier transportation, either unknowingly or for lack of enforcement, without regard to such regulations. Many who by statutory definition have been providing broker services, assumed for a variety of reasons they were not regulated. Reasons have included the notion that new industry vernacular such as, “third party logistics provider”, “3PL”, “4PL”, “transportation management”, or “consulting” could somehow cause them to avoid the clear statutory definition of a broker of motor carrier transportation.

49 U.S.C 13102 (2) leaves little doubt that such activities are within the definition of a broker:

2) Broker.— The term “broker” means a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.

When Sec 13102 is then read in conjunction with,

“49 U.S.C. §14916, UNLAWFUL BROKERAGE ACTIVITIES, (a) Prohibited Activities.— A person may provide interstate brokerage services as a broker only if that person— (1) is registered under, and in compliance with, section 13904; and (2) has satisfied the financial security requirements under section 13906.

(c) Civil Penalties and Private Cause of Action.— Any person who knowingly authorizes, consents to, or permits, directly or indirectly, either alone or in conjunction with any other person, a violation of subsection (a) is liable— (1) to the United States Government for a civil penalty in an amount not to exceed $10,000 for each violation; and (2) to the injured party for all valid claims incurred without regard to amount,

…it is apparent that one of the purposes of MAP-21 is to penalize not only those who continue to perform brokerage without a license, but also those who are properly licensed and participate with the unlicensed.

Congressional history, intent and resulting language of §14916, read in conjunction with 49 U.S.C. 13102, leaves no doubt about the intended affect. Those participating in offering for sale, negotiating, or even holding themselves out by advertisement, marketing material or websites, as selling, providing or arranging for transportation by motor carrier for compensation, are clearly subject to this regulation and penalties for violation. There are no vague, or marketing descriptions, such as 3PL, 4PL or consultant, that will avoid the purpose and intent of §14916.

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November 29, 2014

Shippers May Not Claim a Set-off Against a Broker for Cargo Claims, Except by Express or Implied Contract

This firm has recently been successful in litigation avoiding a claim of set-off  by a shipper against a client broker, wherein the shipper claimed they should be entitled to set-off the amount of a cargo claim against receivables owed to the broker.

The law is very clear that property brokers have only the duty to use reasonable care in selecting carriers, and absolutely no duty for loss or damage to cargo, absent a contractual obligation.  Chubb Group of Ins. Cos. v. H.A. Transp. Sys., Inc., 243 F. Supp. 2d 1064, 1068 (C.D. Cal. 2002); Commercial Union Ins. Co. v. Forward Air, Inc., 50. 2d 255, 257 (S.D.N.Y. 1999); 5KLogistics, 659 F.3d at 335-36; Travelers Ins. v. Panalpina Inc., No. 08-C-5864, 2010 WL 3894105, at *4 (N.D. Ill. Sept. 30, 2010).

Except instances wherein the parties have agreed by express or implied contract for the broker to be responsible for cargo claims, shippers may not assert a right to set-off unpaid cargo claims against amounts the shipper may owe the broker for prior transportation services.

With regard to express contracts, brokers should be very careful to review all contracts with shippers for such a right of set-off.  Brokers should also avoid voluntary payment of cargo claims as a practice in order to avoid a later claim of implied contract to pay such cargo claims in the future.

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October 21, 2014

RECENT U.S. DISTRICT COURT DECISION GIVES HOPE FOR COURTS RETURNING TO DUTY OF REASONABLE CARE FOR BROKERS AND SHIPPERS IN SELECTING CARRIERS IN SPITE OF FMCSA’s SMS/BASICS CONFUSION 

In, McComb v. Bugarin, et al., the U.S. District Court of Illinois ruled for the shipper in a case alleging negligent selection of a carrier, where the carrier had collided with the plaintiff’s car at an intersection, causing catastrophic injury/death. While all the facts are too lengthy to include here, the essential fact is that there was no sufficient proof of carrier’s maintenance, record or safety rating being the proximate cause of the damages.

The case is as important for what it did not say, perhaps, as for what it did. By that, I mean the Court did not comment on plaintiff counsel’s expected attempt to tie FMCSA safety ratings to proximate cause, except by saying that such attempt did not prove proximate cause, either in fact or law. In other words, plaintiff cannot (at least in this court) just allege either safety rating or the confusing BASIC scores on maintenance, but must prove that the actual maintenance at the time of the accident was the proximate cause of the accident. As many of us have said since the Schramm decision, brokers and shippers have for the 50 years prior to Schramm been subject to one clear standard. That standard has always been “reasonable” care in the selection of the carrier. As this Court found, lack of reasonable care is not sufficiently proved by what may be found in the questionable SMS BASICs (or prior SafeStat calculations) alone. Proximate cause must be proved by sufficient nexus between the actual indications of maintenance at the time of the accident and causation. That being so, shippers and brokers still have no concise checklist for being found to have exercised reasonable care. Thus, it would seem the broker/carrier agreement must reflect more than reliance on invalid SMS/BASIC scores, but also that the broker/shipper and carrier have provided for constant reporting of current safety status by way of the agreement and the contemporaneous rate confirmation/load tender, to include indemnity from the carrier should they fail to report or misrepresent current safety conditions. This procedure would seem to add sufficiency to some of the issues implied by the McComb Court, had it ruled on the role of Safety Ratings in determining reasonable care and proximate cause.

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September 6, 2014

EXEL v. Southern Refrigerated Transport…Court holds for broker based upon contract language, over bill of lading- $6M Judgement

A U.S. District judge in Ohio on Aug. 26 awarded Westerville, Ohio-based broker Exel Inc. $5.9 million in its case against Southern Refrigerated Transport Inc. of Texarkana, Ark.  At issue was a 2008 shipment of pharmaceuticals stolen from a rest stop near Dickson, Tenn., while en route from Exel’s Mechanicsburg, Pa., warehouse to Memphis. Following the theft of the shipment, Exel filed a claim with SRT on behalf of pharmaceutical maker Sandoz for $8,583,671.12, the alleged actual value of the lost goods. SRT denied the claim. This case turned on the contract language in the contract between the broker and the carrier.  The contract called for the terms of the contract to preempt the limitations of the Carmack Amendment, and provided for full or actual value of the goods.  The carrier apparently “assumed” that the limitations of their bill of lading would put the value of the loss at $56,766, within their insurance coverage.  The Court ruled that the language of the contract between the carrier and broker preempted Carmack. The holding should be taken to show the critical importance of fully reviewing all contract language among shipper, broker and carrier in all brokered loads.  Brokers should take notice of this case, not only for the narrow ruling here, but also for the importance of making sure that all their obligations to their shipper customer are reflected in their contracts with the carriers they use for transport.

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August 18, 2014

RECENT DECISION BY AN ILLINOIS APPELLATE COURT IS A FURTHER WARNING TO SHIPPERS AND BROKERS WHO SELECT CARRIERS.

In rendering a $27 Million verdict against the defendants; truck driver, motor carrier, shipper and 3PL, the Court basically found that the shipper, 3PL and carrier were conducting a joint venture and were all liable, due to the manner and methods of controlling the conduct of the driver and retaining too much control generally over the process of transporting shippers goods.

While there is from this case an overall warning in attempting to control too much of the methods and manner of transporting, I prefer to focus on how much of the exposure of being found liable could (and should) have been avoided for the parties by smart drafting and execution of their respective documents surrounding the transaction.

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August 6, 2014

Summary of  UPS v. Megatrux opinion by U. S. Court of Appeals, Eleventh Circuit

http://uscourtofappealscircuit11.blogspot.com/2014/05/panel-finds-that-intermediate-shipper.html

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August 5, 2014

SHIPPERS, CARRIERS AND BROKERS SHOULD PAY SPECIAL ATTENTION TO THE RECENT DECISION BY U. S. COURT OF APPEALS, 11TH CIRCUIT…THIS CASE REQUIRES A CLOSE LOOK AT ALL BROKER/SHIPPER/CARRIER AGREEMENTS

In UPS v Megatrux Trans, Inc., (May 8, 2014), the Court held that a broker may contract with a shipper to limit the broker’s liability for cargo loss/damage, AND, may contract with a carrier for indemnification in an amount over the limitation of liability in their contract with the shipper.

In short, the Court did not allow the carrier to have the benefit of the limitation of liability in the contract between UPS and the shipper, AND, allowed UPS to subrogate on their settlement with the shipper, sue the carrier for a much larger amount and collect all damages. Net effect, is that carriers should not agree to indemnification of broker or shipper for full cargo loss amount where there is available a limitation of liability between broker and shipper. But from broker’s perspective, they should always seek limitation of liability from shipper as well as indemnity from carrier. Thereafter, it becomes a matter of leverage…or carpe diem for the party with the most leverage. ************************************

July 19, 2014 RECENT BANKRUPTCIES WILL HAVE RIPPLE EFFECT ON SHIPPERS, BROKERS AND CARRIERS.

Recent announcements of bankruptcy by some shippers, carriers and 3PLs have for several clients raised the issue of preference claims that may yet be asserted by the trustee for such companies.  Depending upon the nature of your relationship with such bankrupt companies, you may receive such a claim if you were doing business with the bankrupt under any circumstance whereby they were paying you for services during the last 90 days prior to their filing Chapter 11 or 7 bankruptcy.

A preference claim is essentially a claim by the trustee that you received an avoidable preference payment(s), that should be recovered by the bankrupt estate, due to the payment being a preference over other creditors.  Typically, the trustee will just calculate all payments made to creditors within the 90 days preceding the filing of bankruptcy, and make demand on the creditor, alleging that the full amount is a preference over other creditors.  It is then up to the creditor to provide a defense to such claims.

While not all preference claims can be defeated, many can be defeated or minimized if properly handled.  The three primary defenses to such claims are:  Ordinary Course of Business;   New Value,   and  Contemporaneous Exchange of Value.

In the interest of brevity, I will not attempt to discuss the essential elements of each of these defenses.  However, the following are some suggestions that will help in effectively responding to any preference claim:

  1. A prompt response is essential, especially if you hope to avoid expensive litigation over the claim.  Trustees will normally send out demand for a large number of preference claims, and will not file suit immediately, unless the limitations period (2 yrs after date of filing) is approaching.  The sooner an effective presentation of your defenses is presented the more likely you are to avoid costly litigation.
  1. Any presentation of defense to a preference claim should include documentation that must be considered by the trustee.  A hasty prepared denial, without documentation will ordinarily be ignored by the trustee, until suit is filed and you are then required to present a more formal and expensive defense.
  1. A clear, written and documented explanation of your defense should be presented as soon as possible.

In addition to responding to preference claims, effective management of receivables for any suspect trade debtor (prior to filing bankruptcy) is equally important and can be very helpful to defeating future preference claims, if properly planned and executed.  Conversely, there are some steps in such an effort that may actually exacerbate your future position, if the wrong action is taken against such a debtor.  Without over generalizing, the most effective receivables policy is one that shows consistency over time in both terms and payment history, especially during the 90-day look-back period relative to all other prior history.  In this regard, if should be noted that allowing a debtor to go well over prior historical terms is considered evidence of preference as much as early payment.  Requiring expedited payment of receivables, out of the ordinary terms, will be problematic, unless done in conjunction with an effective transition to contemporaneous exchange.

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July 12, 2014

SHIPPERS AND CONSIGNEES CAN LIMIT POTENTIAL LIABILITY FOR DOUBLE PAYMENT OF TRANSPORTATION CHARGES WITH PROPER AGREEMENTS AND PROCEDURES

Paul Stewart, BBA, MA, JD  

Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies, Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel

 Most shippers are unaware of the potential liability to pay freight charges twice, until faced with a demand by a carrier who was not paid by a broker or non-delivering carrier. The original concept was fostered by the days of regulation which put emphasis on all filed rates being collected equally in order to avoid preference to members of the shipping public. Of course, such a purpose is gone with deregulation and the right to contract for rates and service.

However, the general concept of “carrier gets paid” is still fostered by collection agencies and others who seek to collect from shippers and consignees in instances where the ultimate carrier has not been paid, unbeknownst to the shipper. Usually, such an occurrence happens when a broker, subsequent broker, or non-delivering carrier has further brokered a load to a carrier not initially on the bill of lading, the shipper has paid the broker, and the ultimate carrier was never paid.

The case law on this situation is too complicated to fully review here, but generally, a shipper/consignee may limit their exposure for “secondary liability” by:

1. Having contract with the third party (broker, 3PL, etc) which requires the third party to indemnify, and have contracts with all carriers requiring they look only to the third party for payment.

2. Signing the Section 7 on the bill of lading in all instances, thereby giving notice to carriers that the load is shipped “without recourse”.

3. Protecting the consignee by marking the bill of lading as “Prepaid”, unless the consignee is accepting the responsibility for payment to the carrier.

4. Confirming that no carrier is allowed to be listed on the bill of lading other than the carrier assigned originally by the third party.

5. Not allowing any unknown carrier to pick up load, or to issue a subsequent bill of lading other than original bill of lading which designates the original carrier as delivering carrier.

While there may be exceptions to all such limitations, they are very rare, if documents and procedures are well disciplined.  Finally, brokers or other third parties should never pay a demand by a collection agency or subsequent carrier unknown to them without advice of counsel.

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June 10, 2014

RECENT DECISIONS AND CLIENT EXPERIENCE INDICATE CONFUSION AS TO RESPONSIBILITY FOR CARGO CLAIMS

Paul Stewart  BBA, MA, JD

Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies, Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel

1. First, and foremost, if you are a broker of transportation (truck, intermodal, etc) you cannot leave any doubt with your shipper as to whether you will accept ultimate liability for cargo loss or damage. Courts have held that such doubt is sufficient to hold the broker responsible, based upon past practice.

2. If you “process” claims, make sure your shipper understands that limited role, and the party who has responsibility for properly and timely filing the claims. Recent decisions have held broker liable for insufficient filing information, failing to file claim timely and failure to advise shipper of the limitations period on filing suit, should the claim be denied.

3. Understand that you as a broker have no legal/ownership interest in the claim, without a written assignment of the claim from the owner of the cargo.

4. If you do not have an assignment of the claim, the claim form should reflect that the claim is being filed on behalf of the owner of the cargo…and not in your name as the broker.

5. If your shipper expects to recover the full invoice value of all claims, you should be careful in your broker-carrier agreement to hold the carrier responsible for the value of the cargo and not just the limit on carrier’s cargo insurance.

Much more could be said about the many intricacies of cargo claims “processed” by brokers/3PLs, but in a nutshell, the duties and responsibilities for cargo loss or damage must be clearly indicated in the shipper/broker and broker/carrier agreements and practices.

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May 3, 2014

NOW THAT GAO HAS FOUND SMS BASICs TO BE INVALID FOR THE PURPOSE OF DETERMINING CARRIER SAFETY, WHAT HAPPENS TO THE PROTOCAL ADOPTED BY MANY SHIPPERS, BROKERS AND INSURANCE COMPANIES? 

 Paul Stewart  BBA, MA, JD 

Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies, Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel

For instance, if data, as established by a government agency, is invalid for a particular purpose, is it not prima facie evidence of negligence for anyone to rely upon that data in selecting carriers? If you say, well it should at least be considered, then I have to say be careful with that advice.

Forget for a moment the exclusionary use of SMS data and “thresholds”, what about those instances wherein a carrier is selected because their SMS scores appeared to be within tolerable “thresholds” as determined by SMS. If a shipper or broker then chose that carrier, in light of GAO’s findings (“Most carriers operate few vehicles and are inspected infrequently, providing insufficient information to produce reliable SMS scores.”), have they not been negligent?

Bottom line is that the SMS data is equally deficient for both excluding and selecting carriers. Again, data is either valid for its purpose, or it is not. If it is not, then it is corrupt for both purposes. Frankly, I never felt comfortable going into court with an affirmative defense of relying on corrupt/invalid data.

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March 15, 2014

BROKERS BEGIN 2014 UNDER MUCH MORE SCRUTINY AND POTENTIAL LIABILITY THAN EVER BEFORE, DUE TO MAP-21, AND IN PARTICULAR 49 U.S.C.14916.

Paul Stewart  BBA, MA, JD

Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies, Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel

Much is uncertain about the full extent of penalty provisions of MAP-21 for unauthorized brokerage activity. But at a minimum, brokers will be held to a broader standard of care in their transactions with other parties who may further broker loads tendered to them. And the potential liability for both civil penalties ($10,000 per incident) and civil actions by injured third parties will now extend beyond the corporate veil to officers and directors of brokerage companies.

49 U.S.C.14916(c) provides: “Any person who knowingly authorizes, consents to, or permits directly or indirectly either alone or in conjunction with any other person, a violation of subsection (a) is liable –

(1) to the United States Government for a civil penalty in an amount not to exceed $10,000 for each violation; and

(2) to the injured party for all valid claims incurred without regard to amount.”

While this statute is untested in the courts, a fair reading indicates that in those instances wherein a brokered load is accepted from or brokered to a party who does not have brokerage authority, and subsequently brokers the load, the broker who participates in this transaction (even with proper authority) may be liable for civil penalties and UNLIMITED damage claims by third parties.

The most simple assumption from this new exposure to liability by brokers is that all brokers must now be able to show they confirmed the brokerage authority of all parties from whom they accept a brokered load (subcontracting/double brokering), or to whom they broker the load, if it could be further brokered by that party. As such, both operations procedures and contracts with other brokers and carriers must be strengthened in a manner to show due diligence by the broker…i.e., that they did not “…knowingly authorize, consent to, or permit directly or indirectly either alone or in conjunction with any other person, a violation of (the statute requiring proper authority and financial security)”.

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February 3, 2014

SHIPPER/CUSTOMERS ARE NOT ORDINARILY ENTITLED TO TAKE SETOFFS AGAINST BROKER RECEIVABLES FOR LOSS/DAMAGE CLAMS, UNLESS BY EXPRESS CONTRACTUAL PROVISION.

Paul Stewart  BBA, MA, JD

Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies,  Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel

 1. Brokers have no common law or statutory obligation for cargo loss or damage claims, unless they agree by contract, either express or implied, with the shipper/customer, to be responsible. Chubb Group of Ins. Cos. v. H.A. Transp. Sys., Inc., 243 F. Supp. 2d 1064, 1068 (C.D. Cal. 2002); Commercial Union Ins. Co. v. Forward Air, Inc., 50. 2d 255, 257 (S.D.N.Y. 1999); 5KLogistics, 659 F.3d at 335-36; Travelers Ins. v. Panalpina Inc., No. 08-C-5864, 2010 WL 3894105, at *4 (N.D. Ill. Sept. 30, 2010).

2. An attempt by a shipper/customer to hold Broker’s receivables, without proper right or claim, is actionable as conversion, unjust enrichment and/or breach of contract.

3. The party asserting a claim to setoff has the burden of establishing its right to set off. Polk v. Torrence, 218 Tenn. 680, 683, 405 S.W.2d 575, 576 (1966); Conister Trust Ltd. v. Boating Corp. of Amer. & Villas-Afloat Ltd. (Tenn. App., 2002).

Brokers should be careful in review of their contracts with their shipper/customers, and not allow provisions which either make them responsible for cargo claims and/or allow the shipper/customer to withhold or claim setoff for pending cargo claims against carriers.

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January 21, 2014

RECENT CASE FOR CLIENT REMINDS ME THAT ALL BROKERS SHOULD HAVE PROTECTION IN BROKER CARRIER AGREEMENT FROM CONSEQUENCES OF DOUBLE BROKERING BY THEIR CARRIER.

Paul Stewart  BBA, MA, JD

Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies, Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel

 Not just a clause prohibiting such subsequent brokering, but also responsibility for subsequent claims and personal injury/death, by indemnity and acceptance for claims as though original carrier was the carrier at time of damage/loss/injury, or as advised by counsel.

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January 15, 2014

DO WE UNDERSTAND THE SIGNIFICANCE OF INDEMNITY CLAUSES IN CONTRACTS REQUIRED BY CUSTOMERS AND SERVICE VENDORS

Paul Stewart  BBA, MA, JD

Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies, Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel

Are you prepared for their future consequences?

How are you handling this issue?

1. Originally, fair indemnity agreements only required that each party indemnify the other for their own negligence. Recent decisions on vicarious liability and other issues have spawned over broad drafting of indemnity clauses which inequitably shift risk of liability from shippers to carriers/brokers/3PLs. This trend usually results in the weaker party assuming most of the liability, unless there is comprehensive review and push for a more balanced approach. (Hint, believing that you have properly addressed this exposure by passing it along to a small party who cannot afford to provide defense or indemnity is not a real effective method. The obligation will find its way back up the chain to you.)

2. Such clauses vary from “broad form”, wherein the indemnitor assumes UNQUALIFIED obligations to defend and indemnify the shipper (or other party) for all risks, regardless of fault; to, “intermediate form”, wherein the indemnitor assumes all risk of liability, except that caused by the “sole negligence” of the other parties; to, “limited form” (preferred and fair) wherein the parties agree to indemnify each other for their own negligence. Agreeing to a limited form of indemnity by contract is no more exposure than that party would have without a contract, if properly drafted.

3. If faced with customer who will not agree to limited form indemnity, seek counsel and insurance advice as to how to protect your position. Never assume that a contract is “just our standard draft and cannot be changed”, or accept a verbal representation that “we would never try to enforce such an obligation on you”…or, more likely, never accept your organization’s sales side argument that we “have to sign this agreement without any modification”. Many times, if you cannot change it or insure it, the revenue acquired by agreeing to broad form indemnity will not be nearly sufficient to pay your ultimate cost of defense and indemnity.