When goods are lost, damaged or delivered late, determining the amount of compensation owed by a carrier can be far from straightforward. The applicable rules depend on whether the transport is governed by the CMR Convention or by Poland’s Transport Law. Another important question is whether the party entitled to compensation can also recover the freight and other costs associated with the transport.

Compensation under the CMR Convention

Under the CMR Convention, a carrier is generally liable for three main types of events:

• total or partial loss of goods;
• damage to goods; and
• delay in delivery.

In cases involving loss or damage, compensation is generally calculated by reference to the value of the goods at the place and time when they were accepted for carriage. That value is determined based on the commodity exchange price or, where no such price exists, the current market price. If neither is available, the ordinary value of goods of the same kind and quality is used.

The value of the goods may, of course, be considerably higher than the freight agreed between the parties. Recognising this discrepancy, the CMR Convention places statutory limits on the carrier’s liability.

Under Article 23(3) of the Convention, compensation for loss is generally capped at 8.33 units of account per kilogram of gross weight lost.

The relevant “unit of account” is the Special Drawing Right (SDR), a monetary unit used by the International Monetary Fund. Its value is based on a basket of major international currencies and is converted into the national currency of the country where the claim is being considered in accordance with the rules set out in the CMR Convention.

What happens when the goods are damaged?

Damage to goods is addressed separately under Article 25 of the CMR Convention.

The carrier is liable for the amount by which the value of the goods has decreased as a result of the damage. The calculation is based on the value of the goods determined under Article 23.

In practical terms, compensation for damaged goods is therefore generally the difference between their market value at the time and place of acceptance for carriage and their value after the damage occurred.

However, the carrier’s liability remains subject to the CMR limits. If the entire shipment has lost value, compensation cannot exceed the amount that would have been payable had the entire shipment been lost. If only part of the shipment was damaged, the maximum compensation corresponds to the amount that would have been payable for the loss of that part.

Compensation for delayed delivery

The CMR Convention also establishes a specific limit for claims arising from delayed delivery.

Under Article 23(5), where the person entitled to the goods proves that the delay caused damage, the carrier is liable for compensation, but that compensation cannot exceed the amount of the freight.

Although the rule appears straightforward, proving the actual loss caused by a delay can be challenging in practice, particularly where several parties are involved in the transport chain.

Can the liability limits be increased?

The liability limits under the CMR Convention are not necessarily absolute.

The parties may, subject to the applicable requirements and an additional payment, declare a special interest in delivery. They may also agree on a declared value of the goods. In such circumstances, the declared amount can become the applicable upper limit of the carrier’s liability instead of the standard limitation under Article 23.

Compensation under Poland’s Transport Law

Poland’s Transport Law provides broadly similar rules concerning carrier liability, although it introduces an additional category: shortage or diminution in the quantity of goods.

Under Article 80, compensation for loss or shortage cannot exceed the value of the goods, determined in the following order:

1. the price stated on the supplier’s or seller’s invoice;
2. the price resulting from the price list applicable on the date the goods were handed over for carriage; or
3. the value of goods of the same type and quality at the place and time of dispatch.

The rules are therefore broadly comparable to those under the CMR Convention. One practical difference is that Polish Transport Law expressly gives priority to the value shown on the relevant invoice or account document.

For domestic transport, the sender may also declare the value of the shipment in the consignment note. This differs from the CMR mechanism for increasing the carrier’s liability, as the Polish carrier does not necessarily receive additional remuneration for accepting goods with a declared value and may challenge the declared value by presenting evidence of the actual value.

Another significant difference is that Polish Transport Law does not impose a carrier liability limit based on the weight of the shipment in the same way as the CMR Convention. As a result, carrier liability in domestic transport is generally linked more directly to the actual loss suffered.

This does not necessarily mean that every form of consequential loss can be recovered. The statutory compensation mechanism primarily addresses the actual value of the goods and may therefore exclude claims such as lost profits that could arise, for example, if the goods were intended to be processed and subsequently sold.

There is also a difference regarding delay. Under Polish Transport Law, compensation for delayed delivery may be limited to twice the amount of the freight, whereas the CMR Convention generally limits such compensation to the amount of the freight.

What about gross negligence?

Statutory limits on carrier liability may cease to apply where the damage was caused intentionally or as a result of gross negligence.

Under both the CMR Convention and Polish Transport Law, if the carrier is proven to have acted or failed to act in circumstances amounting to intentional misconduct or gross negligence, the claimant may seek compensation for losses that would otherwise fall outside the applicable statutory limits, provided that they are sufficiently connected to the carrier’s conduct under the applicable causation rules.

This can therefore have a significant impact on the value of a transport claim.

Can the freight be recovered?

Another important issue is whether the party entitled to compensation can recover the freight paid for the transport.

Transport is generally regarded as an obligation to achieve a particular result: the goods should be transported from point A to point B within the agreed timeframe and in the required condition.

Where freight has already been paid, the applicable transport regulations may allow the party entitled to the claim to recover some or all of that amount, depending on what happened to the shipment.

Under Article 23(4) of the CMR Convention, in addition to compensation for loss, the freight, customs duties and other costs incurred in connection with the carriage are refundable in full in the event of total loss and proportionately in the event of partial loss.

Polish Transport Law contains a broadly corresponding provision. Under Article 82, the carrier must also refund freight and other costs associated with the carriage:

• in full in the event of total loss;
• proportionately in the event of shortage; and
• in an amount corresponding to the percentage reduction in the value of the shipment in the event of damage.

The two regimes are therefore broadly similar, although Polish Transport Law expressly recognises “shortage” as a separate category. Under the CMR Convention, the treatment of a shortage will depend on the circumstances and the nature of the goods.

What costs can be recovered?

The concept of freight and “other costs associated with the carriage” may cover more than the basic transport charge.

The CMR Convention expressly refers, for example, to customs duties. This may indicate that other ordinary costs directly connected with the movement of the goods can also fall within the scope of recoverable expenses.

Depending on the circumstances, such costs could include loading expenses, forwarding services or payments made to reserve warehouse capacity.

The legislation does not provide an exhaustive list. The key consideration is whether the cost constitutes a normal and necessary expense associated with transporting the goods covered by the contract.

By contrast, costs incurred to collect the goods again and arrange a subsequent shipment—for example, as part of a complaint or replacement process—would generally fall outside the carrier’s liability, unless the carrier’s conduct involved intentional wrongdoing or gross negligence.

Conclusion

The calculation of compensation in transport claims depends on several factors, including the legal regime applicable to the carriage, the nature of the loss, the value and weight of the goods, and whether the carrier’s conduct involved gross negligence or intentional wrongdoing.

While the CMR Convention imposes specific limits based on the weight of the goods and the SDR, Poland’s Transport Law follows a somewhat different approach for domestic transport.

In both cases, however, the claim may extend beyond the value of the damaged or lost goods. Depending on the circumstances, the claimant may also be entitled to recover freight, customs duties and other reasonable costs directly connected with the carriage.

Łukasz Strzelczyk
Attorney-at-Law, Trans Lawyers

www.translawyers.eu