Transfer

This, of course, creates an anomaly. Where the cargo owner sues the carrying vessel’s owner for breach of contract in respect of the goods being carried, the carrying owner can defend himself with any included exclusion and limitation provisions, even if 100% to blame. Where, however, his vessel is involved in a collision with another vessel, and the cargo owner decides to sue that other vessel, the carrying owner will find himself liable for 50% of the amount which the other owner had to pay in damages to the cargo owner even if, the carrying owner was in fact only, say, 1% to blame for the collision. For this reason shipowners have protected themselves with a clause written into their contracts of carriage with the shipper/cargo owner which entitles them to seek back from the shipper/cargo owner the 50% contribution which they might be obliged to pay out to the non-carrying vessel in a collision. It is no longer true to say that the U.S. adopts a rigid ’50 per cent each’ division of damages approach. The Reliable Transfer (1975) case has opened the way for U.S. law to come into line with legal thinking in other traditional maritime countries. (This has not meant, however, that the ‘both to blame’ approach has become obsolete.) The old idea, which has now fallen from favour, was that English courts could and only should award damages in sterling, conversion to take place either at the date of the breach of contract (if such was the nature of the claim) or at the date of the loss which was suffered or the expenditure incurred (if the claim was in tort).