ON 1 April 2019 the Australian Competition and Consumer Commission accepted a court enforceable undertaking from Hutchison Ports Australia regarding its standard form Terminal Carrier Access Agreement.

It is the first acknowledgement of the unfair contract terms regime that we discussed in our article in late 2016 (attached). Indeed, it confirms what Berkshire Hathaway Specialty Insurance has been warning for some time – that the new regulations will prevent freight forwarders and other transport operators from avoiding liability in relation to the handling, transport and storage of goods, where their customers are “small businesses” as defined by the Act. A small business is one that employs less than 20 staff and where the services contract is valued at less than $300k or $1m in the annual.

It is important for freight forwarders and other transport operators to understand the ramifications of this enforceable undertaking and to know what to do next – which we suggest is to both review their contracts (to ensure compliance with the new laws) and review their liability insurance (to ensure they have cover).

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BHSI has engaged a transport lawyer to draft some generic standard trading conditions which can assist freight forwarders and other transport operators with a working draft designed to comply with the new laws. An insured could use those terms as a basis and with legal assistance, tailor the STCs to the individual Insured’s needs.

Importantly this policy covers the insured for both their contractual liability per se, and for liability arising if a court strikes out a clause in their contract as being “unfair”. In the latter case, an insured may not be able to rely on an exclusion clause such as ‘all care, no responsibility’ which may be deemed by the Court to be “unfair” and would be liable for the loss to their customer. Importantly our policy covers them for this enhanced exposure.

Should you have any queries or wish to discuss the above, please contact your insurance broker or Berkshire Hathaway Specialty Insurance.

* Important: This information is provided by Berkshire Hathaway Specialty Insurance Company. It does not constitute and should not be treated or relied on as legal, financial or any other form of advice.

Barton Phillips is head of transport & logistics for Berkshire Hathaway Specialty Insurance

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