Some areas of subrogation are niche and require specialized knowledge and expertise for analysis and investigation. Examples of those unique areas are losses involving the industries of trucking, marine, and aviation. Inspired by P.D. Eastman’s “Go, Dogs, Go,” this article breaks down each of these niche areas with a brief overview of the various applicable federal laws, including the notice requirements, statutes of limitations, and measure of damages to adhere to in order to attempt a subrogation recovery by truck, boat, and/or plane.
Recovery by Truck
Common trucking losses involve collisions, product defect, and intrastate cargo losses, all of which are analyzed under the standard state laws where the loss occurred. Interstate cargo losses are more peculiar. For losses involving damaged or lost cargo which travelled through or between states, the applicable law is the Carmack Amendment 49 U.S.C. §11707(a)(1). Under Carmack, claimants have 9 months from receipt of damaged goods or expected receipt of lost goods to give the target carrier written notice of the claim and 2 years to file suit from the date the carrier denies the claim. The measure of damages under Carmack when the cargo is delivered in damaged condition is the “sound” or “fair” market value less the value of the cargo in its damaged condition. When the cargo is never delivered or has been lost, the measure of damages is generally the replacement value of the cargo unless the cargo is “unique”. The shipper and carrier can contract to limit the carrier’s liability, so claimants need to review the language in the contract (if there is one) or on the bill of lading.
Recovery by Boat
Marine losses involve losses to pleasure crafts, commercial vessels, marinas, piers, shipped cargo, etc. Distinct to these losses are jurisdictional issues and various federal and state statutes. For losses involving allisions and collisions, the Admiralty and Maritime laws, the Limitation of Liability Act, etc. can apply depending on the circumstances of the loss. The applicable laws for losses of cargo delivered internationally to or from the United States by sea are set out in the Carriage of Goods by Sea Act (COGSA) 46 U.S.C. §30701. While written notice is not a specific requirement under COGSA, we recommend it as standard practice. Under COGSA, claimants have 1 year to file suit from the date of actual delivery of the cargo or the date the cargo should have been delivered. The measure of damages is $500 per “package.”
Recovery by Plane
Aviation losses involve losses to private or commercial aircrafts, airports, hangers, shipped cargo, etc. There are two primary law doctrines to check for cargo losses when shipped internationally by air, depending on your jurisdiction: Warsaw and Montreal Convention. Both have tight deadlines for sending written notice. Under Warsaw, claimants have 7 days to give written notice and must file suit within 2 years. Under Montreal, claimants have 14 days to give written notice of a claim (if damage was not immediately “obvious”) and 2 years from delivery of the cargo to file suit. The current measure of damages under Warsaw is 19 SDR per kg and 26 SDR per kg under Montreal.
These cases are difficult on many levels. Investigations can be delayed or halted as the evidence can quickly disappear from the scene and specialized experts are needed. Compliance with the short notice requirements and statutes of limitations require the insureds and insurance carriers to act without delay. The different terms of art in the laws require special knowledge of the background of the doctrines and context from relevant caselaw. One of the biggest hurdles to recovery on these losses is to the nominal measure of damages. However, knowing how to properly analyze these losses under the correct laws and retaining the right team of experts and consultants to push the investigation are the first steps to bringing in the recovery by land, sea, or air.
Go, Subro, Go!
