1. Ross & Co Solicitors LLP 5 th INTERNATIONAL CARGO RECOVERY CONFERENCE PRACTICAL ASPECTS OF ENGLISH LAW, PRACTICE AND PROCEDURE AND OVERVIEW OF NEW DEVELOPMENTS

2. Ross & Co Solicitors LLP WHEN and WHY is the claim heard in England? English law and jurisdiction clauses traditionally and commonly found in international carriage of goods contracts True of both bills of lading and charterparties Jurisdiction is the territorial reach of the courts Jurisdiction may be in rem or in personam – established by service Law is the system of law which governs the contract

3. Ross & Co Solicitors LLP WHAT is the relevant law in England? For carriage of goods – mainly International Convention BY SEA – Hague or Hague Visby Rules. Hague Rules apply as a matter of contract. Hague Visby Rules apply as a matter of statute law to all bills issued in England Neither Hamburg nor Rotterdam Rules yet ratified in England BY AIR – Montreal Convention BY ROAD – CMR Convention for International carriage of goods (otherwise Domestic e.g. Road Haulage Association) BY RAIL – Convention concerning International Carriage by Rail (COTIF/CIM)

4. Ross & Co Solicitors LLP WHAT is the SUBSTANCE of the relevant law? Provisions of these Conventions essentially the same E.g. ‘Universal’ time limits under the Conventions 1 yr time limits under Hague / Hague Visby Rules and CMR/COTIF Conventions (unless wilful misconduct) 2yr time limit under Montreal Convention BUT national Courts may construe certain important provisions differently e.g. unseaworthiness English Courts recognise extensions of time limit where the time limit itself allows extension e.g. Hague Rules

5. Ross & Co Solicitors LLP PACKAGE LIMIT As per the Conventions BY SEA- £100 gold value per pkge (Hague Rules) 2SDR/kg or 667.67SDR per pkge/unit (HV Rules) BY AIR - 19 SDR/kg Montreal BY ROAD – 8.33SDR/kg CMR BY RAIL – 17SDR/kg COTIF.

6. Ross & Co Solicitors LLP SHIP’S LIMIT Under the Merchant Shipping Act 1995/1976 Limitation Convention, which is applicable, the limit is procedural So, the English Court will apply the 1976 limit The calculation is made on a sliding scale as per the ship’s limitation tonnage Recent (2015) substantial increases in ship’s limit E.g. 40,000grt bulker up from c15,200,000SDR to 22,952,000SDR 160,000grt VLCC up from c42,200,000SDR to 63,722,000SDR High limit but very difficult (impossible?) to break

7. Ross & Co Solicitors LLP BREAKING LIMIT Package Limit broken by – intent to cause damage or recklessly with knowledge of probable resulting damage (HV/Montreal/COTIF) wilful misconduct (CMR) Ship’s limit broken If proven that loss resulted from personal act or omission committed with intent or recklessly and with knowledge that damage would probably result

8. Ross & Co Solicitors LLP To some limited degree, it may depend on the Court Commercial, Admiralty, Chancery divisions of High Court each have a slightly different character Commercial Court is that – but still a forensic degree of scrutiny Judges are very experienced and often very specialised. Drawn from the ranks of successful practising barristers Choice of Court can be very important. Sometimes crucial (e.g. Admiralty for in rem) WHAT are the characteristics of the English Court’s approach?

9. Ross & Co Solicitors LLP LONDON ARBITRATION is a common option Arbitration clauses in bills of lading will be enforced (so long as specifically incorporated) A reference to an arbitration clause in a charterparty may be sufficiently incorporated into the contract evidenced by the bill/charterparty LONDON MARITIME ARBITRATORS’ ASSOCIATION (‘LMAA’) the commonest forum in carriage of goods cases Private rather than public – and Awards not publically available Subject to overriding supervision by the Courts Other forms of dispute resolution (e.g. mediation) gaining traction

10. Ross & Co Solicitors LLP COMMENCING THE CLAIM (1) Relatively few formalities in either Court proceedings or Arbitration e.g. no need for PoA or original documents A subrogated insurer can bring proceedings as of right in the name of his assured Where no subrogation rights, there is a need for sufficient authority. Proceedings commenced in Court by the issue of the Claim form. No need for service to protect time. Claim form needs general endorsement of claim for issue; not detailed Particulars Some traditional features may assist e.g. ‘The Owners of cargo lately laden….’ Court fee payable as a disbursement on issue. Recent great increases e.g. max fee now £10k!

11. Ross & Co Solicitors LLP COMMENCING THE CLAIM (2) Arbitration commenced by appointment and notification of the same to respondent Very brief outline details identifying contract and parties generally sufficient Notification can be more difficult e.g. with elusive one ship companies CAUTION - Service of notification must be effected to preserve time Generally, no disbursement cost other than LMMA arbitrator’s appointment fee (£250)

12. Ross & Co Solicitors LLP HOW LONG to Judgment? High Court in London now much quicker than in the past Active case management by Court and less tolerance of delay and missed procedural deadlines Summary judgement procedure where no reasonably triable issues – rare in carriage of goods cases 6 – 9 months in a summary judgment case 2 years otherwise (perhaps!)

13. Ross & Co Solicitors LLP HOW LONG to an Award? Arbitration probably now slower than High Court Tribunal’s Directions do not have the ‘bite’ of Court Orders Scheduling hearings to the convenience of all (including a 3 man tribunal) can cause delays Expert evidence also tends to cause delay 2 – 3+ years

14. Ross & Co Solicitors LLP COSTS (1) – Greater Court involvement Always a big issue in England and recognised as such (home and abroad!) The ‘Jackson Reforms’ are having an impact; not always anticipated The new ‘overriding objective’ – cases to be managed at ‘proportionate cost’ Active case management by Courts includes ‘costs budgeting’ with Courts being willing to trim budgets very substantially Greater transparency on costs Consideration in certain cases to fixed costs regime

15. Ross & Co Solicitors LLP COSTS (2)- Recoverability and exposure Costs FOLLOW THE EVENT Successful party recovers say 60%-70% of his own solicitors fees and usually 100% of allowable disbursements (e.g.Court fees, Counsel and expert fees) Court/Arbitrators decide (i.e. ‘tax’) costs if parties do not agree Court and Arbitrators both quite generous on recoverable fees (e.g. Court scale £126 - £409 per hour. Arbitrators equally generous) Losing party pays very heavily and may have to pay quickly Interlocutory applications in Court can often result in interim costs payment orders

16. Ross & Co Solicitors LLP COSTS(3) – Fee arrangements More flexibility for payment of own legal costs although time charges most commonplace Still no pure contingency fees for litigation BUT ‘Conditional fee arrangements’ (‘CFA’s’) now in place CFA essentially ‘no cure no pay’ with uplift through ‘success fee’ of up to 100% on time charges Post 1/4/2103 the success fee no longer payable by the losing party Damages based agreements (‘DBA’s) now available with success rewarded by % of recovered damages (subject to caps up to 50%). Still rare

17. Ross & Co Solicitors LLP COSTS (4) – Funding arrangements Litigation funding increasingly common for big cases Many players are now in the market Different forms of structured funding General market expectation of 1/10 ratio funding against claim and 2 -3 times return on investment with perhaps even a % of damages recovered Often but not inevitably linked with CFA arrangements Very often linked with ATE insurance (post 1/4/2013 premium no longer recoverable from losing party) to protect against adverse costs order

18. Ross & Co Solicitors LLP FOR Long established common law experience in all aspects of maritime and insurance law leading to relative certainty Specialised courts Consistent following of precedent by high quality judiciary (and practitioners!) Courts increasingly proactive in managing and directing cases Transparency and respect for foreign law and parties Adversarial system and procedure makes it difficult to camouflage the facts Good jurisdiction for good claims COSTS FOLLOW THE EVENT! WHAT ARE THE PROS AND CONS OF LONDON (1)?

19. Ross & Co Solicitors LLP AGAINST Quality of arbitration tribunal panels a bit patchier Arbitration can become bogged down with procedural delays Insistence on forensic approach to detailed preparation can appear uncommercial and ‘pedantic’ e.g. over ‘title to sue’ and cases can be lost on ‘technicalities’ Adversarial system leads to interlocutory battles over procedure and heavy costs Bad jurisdiction in which to roll the dice for poor claims Costs can too easily become disproportionate for small claims ( ˂ US$100k) COSTS FOLLOW THE EVENT!! WHAT ARE THE PROS AND CONS OF LONDON (2)?

20. Ross & Co Solicitors LLP NEW DEVELOPMENTS (1) - Practice and Procedure Changing landscape on COSTS – as above Very significant changes to try and make costs more manageable and controllable Initially on the domestic front, but increasingly also for international clients But, will never be a cheap jurisdiction and costs mitigation an important part of understanding the process (e.g. Part 36 offers, WPSATC offers etc)

21. Ross & Co Solicitors LLP NEW DEVELOPMENTS (2)- Legislation The Insurance Act 2015 A new and very important piece of English legislation amending parts of the venerated 1906 Marine Insurance Act Of limited relevance and interest to primary insurers in cargo recovery field But Potentially important to insurers who are reinsured in London Effective from August 2016 Deals with duty of disclosure, warranties, duty of good faith and contracting out e.g. the new ‘duty of fair presentation’

22. Ross & Co Solicitors LLP NEW DEVELOPMENTS (3)- Legislation The Enterprise Act 2016 Effective from May 2017 Requires insurers to pay claims within a reasonable time. Failure to do so will give rise to claims in damages Potential for dispute in difficult carriage of goods claims where payment delayed Will such damages properly form part of a subrogated recovery action? Ability for insurer to contract out in non-consumer contracts

23. Ross & Co Solicitors LLP NEW DEVELOPMENTS (4)- Caselaw British American Tobacco Denmark AS v Kazemier Transport BVBritish American Tobacco Switzerland SA v H Essers Security Logistics BV (2015) Supreme Court declines jurisdiction over successive carriers in CMR dispute ‘SUPERIOR PESCADORES’ (2016) Court of Appeal rules that a Clause Paramount incorporates the HV Rules not the Hague Rules (no ‘pick and mix’) ‘Standard Chartered Bank v Dorchester LNG(2015) Court of Appeal explains the circumstances in which an indorsee in possession of a bill of lading has title to sue as distinct from a consignee in possession Glencore International AG v PT Tera Logistic Indonesia and anor.(2016) The Commercial Court decides whether notice of time to appoint an arbitrator would interrupt the running of time for a counterclaim

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