8â Electronic bills of lading

As modern transport and communication increase in speed and efficiency, the use of electronic bills of lading has increased. Section 1(5) of the COSGA 1992 provides a mechanism for the Secretary of State to extend the application of the Act to electronic bills, but this has not yet been exercised. However, the UNCITRAL Model Law on Electronic Commerce and the Model Law on Electronic Signatures have been helpful to provide guidance to parties using electronic bills. The CMI Rules for Electronic Bills of Lading were adopted by the Comité Maritime International (CMI) in 1990. The Rules need to be incorporated into the contract. If the parties agree that the Rules will apply to the contract, the shipper delivers the goods to the carrier who then transmits a receipt message to the shipper’s electronic address. The message will contain information pertaining to the name of the shipper, the description of the goods, the date and place of receipt and a private key. The private key is the mechanism that allows for endorsement, negotiation and registration of the electronic bill. It is also a secure means of electronic transmission. The shipper can access material with the private key and control the goods in transit. Once the shipper transfers the goods to the next holder, a new key is issued to the consignee.

Another mechanism is the BOLERO Rules (Bill of Lading Electronic Registry Organization). BOLERO is a project set up by the European Union to study the viability of electronic bills. This is a closed system only accessible by subscribers, who are subject to the BOLERO Rule Book. The system incorporates the use of notification, confirmation and authentication through digital signature. It is unknown how effective the system has been in international trade.

9â Conclusion

In this chapter, we have seen that the process of carriage of goods by sea in international trade is complex. While legal mechanisms such as the Hague-Visby Rules attempt to achieve a balance between the parties, there are still many gaps present in the law. The competing rights of the parties involved mean that the terms negotiated in the contracts have to be as clear and as specific as possible.

10â Recommended reading

Barclay, C. ‘Technical aspects of unseaworthiness’ (1975) LMCLQ 288 Baughen, S. ‘Does deviation still matter’ (1991) LMCLQ 70

â ‘Defining the limits of the carrier’s responsibilities’ (2005) LMCLQ 153 Clarke, M. ‘Seaworthiness in time charters’ (1977) LMCLQ 493 Dockray, M. ‘Deviation: a doctrine all at sea’ (2000) LMCLQ 76

Grunfeld, C. ‘Affreightment– unseaworthiness– causation’ (1949)MLR 372

Part 4

Tortious Liability for Defective Products

Introduction

Part 4 looks at the tortious liability of traders and the rights of users in respect of product-related injuries. The law of tort is, of course, a far wider topic than liability for faulty products, encompassing negligence, trespass and defamation, amongst other areas. However, the parameters of tort as discussed here are limited to tortious liabilities and actions arising from the production of faulty products.

Part 4 is divided into two chapters, the first looking briefly at the law of negligence before moving on to consider the move towards strict product liability, initially in the United States and, since the 1970s, in Europe. This movement in Europe stemmed from three different sources: the United Kingdom, the Strasbourg Convention and, finally, the EC Directive which overtook both of the other two. The second chapter looks expressly at the regime of strict product liability under Part I of the Consumer Protection Act 1987, which gave effect to the EC Directive in the United Kingdom.

It is important to recognise that negligence and strict liability run in tandem since, although product liability has had a significant impact in this area, the law of negligence remains extremely important for a variety of reasons. The strict liability regime under the Consumer Protection Act 1987 only provides rights to consumers, not businesses. Thus, any damage suffered by a business as a result of using a defective product, such as, for example, damage caused to a factory by a negligently manufactured heater catching fire, must be recovered via negligence. Further, consumer rights under Part I of the Consumer Protection Act 1987 are themselves restricted. Thus, claims for property damage of less than £275, damage to the defective item itself and claims that fall outside the limitation period or the ten-year cut-off period are excluded from the auspices of the 1987 Act. Accordingly, claimants in such cases will need to revert to the law of negligence, or contract, as the case demands.

Finally, while there is a tendency to think of product liability as a consumer law subject, it is important to remember that the legislation impacts on all businesses in the way that they produce their goods and the legal liability to which

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they are subject. Equally, every claim made by an injured user impacts on a defendant business and may affect the reputation of the business, its financial wellbeing and its ability to acquire insurance at a reasonable premium. As such, negligence and strict liability for product-related incidents cannot, and should not, be ignored as an important aspect of commercial practice.