Hamburg Rules

The object of the Hague and Hague-Visby Rules was to spell out the responsibilities and liabilities of the parties, particularly the carrier, in an internationally acceptable way. In the process, the liabilities of the carrier have been limited and in so doing they are in effect saying to the shipper “This is the point where my insurance of your goods ends so this must be the point where yours must start”. This is not so onerous as it might at first sound because it is a fact of life that the premium charged to a shipper for his goods and trade, which would be well known to his insurer, will inevitably be lower than the premium insurers would have to demand from the carrier to cover all the different types of goods that a ship might carry. As the cost of insurance, like any other expense, eventually has to be passed on to the shipper, it is bound to be cheaper for the shipper to do his own insurance. The Rules help all concerned because they know the point at which their risks begin and end. The United Nations Council for Trade and Development (UNCTAD) which is unashamedly on the side of the less developed nations of the world, felt that the Hague-Visby Rules were weighted too much in favour of the carriers most of whom, it seemed to UNCTAD, were operated by the developed nations. In 1978, therefore, the U.N. published a draft convention entitled the Hamburg Rules which required 20 Nations to ratify them before they became an International Convention. It took 14 years for the requisite number of signatories to be found. None of the ratifying countries are significant maritime nations; indeed several of them are landlocked. Not surprisingly there is, in the Hamburg Rules, a clear shift of liability on to the carrier as well as increased levels of compensation for the merchant. The fear generally expressed is that, first, the exporters and importers will be no better off because the carriers will have to pass on their increased costs. Secondly, and more importantly, the clauses in the Hague Rules have stood the test of time in the law courts throughout the world and the Hague-Visby Rules did not alter the fundamentals. The Hamburg Rules, however, introduce vast untried areas of potential legal dispute and in the words of one cynic “When the Hamburg Rules come in, the lawyers will be laughing all the way to the bank”.