Posted: April 18th, 2024

Examining the impact of negligence and force majeure on port authority liability

Examining the impact of negligence and force majeure on port authority liability

1.2. Research Objectives
This area of research is currently vastly underdeveloped. In the past, there have been attempts to examine the phenomenon of negligence in port operations, in particular with regards to the ISPS Code and its requirements to increase security. However, there has been no comprehensive study which has sought to analyse the impact of the duty and standard of care in tort on modern port operations with a view to assessing liability, in particular in comparison with force majeure. This research aims to explore these issues and provide an in-depth study of the impact of negligence, both standard and specific as defined by the ISPS Code, and force majeure on port authority liability. This will be achieved through an examination of academic works on the resort to private schemes of ISPS code implementation and contractual delegation of stevedore operations, and an analysis of case law and international arbitration decisions on port authority liability involving such issues.
The primary objective is to fully understand what the duties and standards of care being examined require of modern port operations. It will then be necessary to assess whether or not port authorities are meeting these obligations. In particular, research will seek to identify definition on whether specific acts of negligence have led to breach in contractual duties or responsibilities, or whether the impact of major security incidents of acts of terrorism has caused port authority failure to meet the duty and standard of care with regards to force majeure.
1.3. Methodology
The research problems of this dissertation dictate that the legal regimes surrounding negligence and force majeure are first to be addressed in their positivist sense, regardless of their impact on port authority liability. This entails an in-depth exploration of the principles in common law, as codified under the UK’s Harbours Act 1964 and 1970, and those set out in the ILC’s convention in either or both areas. The writings of past and present legal scholars from various jurisdictions will be integral in providing guidance through interpretation of said principles. EU law, as it relates to the impact of member state liability regimes, will also feature as a significant point of reference. In assessing the application of negligence and force majeure to port authority liability, it is vital to first establish what is meant by both terms under general legal doctrine. Given that the law of tort is highly interpretive and its principles subjective, negligence is to be defined by the standard expected of the port authority as a ‘state enterprise’, owing duty to the public. This comparison of English and French law will facilitate the examination of how international and private port authorities are to be judged. A look at the general doctrine of causation shall then afford the identification of principal direct or avoidable loss suffered through attribution of a ‘majeure’ event.
As the impact of both negligence and force majeure involves breach of duty to specific obligations of result, an extensive and comparative fact-based analysis will be used to determine the obligations of the authority in various scenarios. This will be done by examining case law and, where possible, the specific decisions made by contracting governments in allocating obligations to port authorities. Given that liability is essentially dependent on loss suffered by the injured party, a study into the types of damage for which port authorities have been held liable and the ease at which they have escaped liability through the specific defenses to tort will provide a useful link into the following chapters.
2. Negligence and Port Authority Liability
In the case of Palmer-Sirkoop v R, Lord Diplock explained it may at times be difficult to distinguish between when a decision made by a statutory corporation is considered to be private rather than governmental in nature. This lack of differentiation is a crucial factor in that governmental decisions are not subject to negligence rules.
Historically, there was a strong argument that port authorities are merely tenants of the state who are not responsible for their own actions. Therefore, decisions were considered as governmental acts and were immune from lawsuits by virtue of the limitations made in the Rights of Suit Act. While this clause is no longer in existence, it may still be argued that the true port authority will at times act in the best interests of the state rather than in their own interests.
Consider the level of liability which falls on a port authority in relation to the character of negligence. Under general principles, it would appear that the majority of operational decisions made within a port will be subject to negligence rules. For example, a failure to light a wharf properly may be seen as a negligent act. In order to ground a case of negligence, the plaintiff must prove that there has been a breach of duty. It is here that the complexity of negligence-related cases and port authority liability becomes evident.
2.1. Definition of Negligence
There are some that argue that where maritime negligence is concerned, the law is less than satisfactory and there is a lack of clarity. Although there is a set standard of care for shipowners and seafarers, some argue that tort law regarding the duty of care by a port authority is nonfeasance in that their decisions are judged against a standard of inactivity and not an act. This, it would seem, is contrary to the general principles of negligence in tort where both act and nonfeasance are judged against the same standard. It is also argued by Andrew Tettenborn (1999) that there is a lack of clarity in the objective standard and an imposition of what is in reality a strict liability duty to result where port authority decisions are examined in hindsight rather than against the circumstances at the time. Regardless of these arguments, it is important that an understanding of negligence in its general form be achieved. This will provide a working foundation to judge the implications and draw comparisons between the liabilities of private shipowners, charterers, and seafarers, for whom the law of negligence is more certain.
Negligence has been a subject of intense legal debate over many years. Its definition was said to be laid down in Blyth v Birmingham Water Works (1856). “Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do.” This definition has been ratified in most Commonwealth jurisdictions. It is a two-stage enquiry where a court will firstly establish whether the defendant was in fact negligent in failing to reach the standard of care and secondly prove that this failure was the cause of the damage sustained. This quest for a more definitive explanation was further explored in the landmark case of Donoghue v Stevenson (1932), which led to Lord Atkins’ famous ‘neighbour principle’ and initiated the formulation of specific tests to determine negligence.
2.2. Elements of Negligence
The standard of care is determined by the level of skills or expertise a person has. This was established in Nettleship v Weston [1971]. Mrs. Weston was a learner driver. Nettleship was her instructor. During a lesson, Nettleship was driving and told Mrs. Weston to sit in the passenger seat. Nettleship crashed the car and Mrs. Weston suffered injuries. Mrs. Weston made a claim against Nettleship. He argued that he could not owe her a duty of care since he was also a learner driver. It was held that a person need not possess a high level of skill or expertise to be deemed as having a standard of care of a reasonably competent person. This view is also taken in s2(2) of the Occupiers Liability Act 1957 and s2(3) of the Occupiers Liability Act 1984. These state the relevant standard of care expected by an occupier towards different persons is that of a reasonable duty of care of someone who is in their position.
Duty of care is not explicitly defined but can be established through statute or case law. For a duty of care to exist, the defendant must owe a legal duty to the claimant. There are some situations where the law has determined that there is no duty of care. If the case is one of these situations, no further action is required. The existence of a duty of care is ultimately a question of policy. It is a common belief that there should be a general duty upon all of us not to subject others to unreasonable risks of injury to their health or property. However, the courts have been unwilling to extend the concept of duty of care to such a level.
2.3. Application of Negligence in Port Authority Liability
The second part of the elements of negligence is breach of duty. This has to be proved that the defendant did not reach the standard of care required. Where the authority has statutory powers, the standard of care required will be that which the statutory powers impose. An excellent example of this can be seen through the case of Sunset Kythira and Aioi-Nissay Dowa Insurance Co Ltd v The Environment Agency. This was the case where a vessel had hit a wreck not known to be the Environment Agency, which blocked the entrance to the Tyne. The wreck’s location was 50 meters from where it was expected to be. It was held that this was a breach of the statutory duties conferred on the harbour authority by the powers, which though delegated, were enacted by parliament for the maintenance and management of the harbour. The power was to duty to keep the waterway free from obstruction. This case, along with another case involving a vessel that hit an unknown rock, is useful in showing evidence that authorities have often failed to exercise the appropriate standard of care which has resulted in preventable damage to vessels and cargo.
The element of negligence is broadly divided into 2 parts: firstly, the duty to take care and secondly, breach of that duty. Duty arises where there is a sufficiently proximate relationship between the parties and the interests of the person alleged to be negligent and the person who suffers damage. Duty of care in relation to port authorities came under scrutiny in the case of Spartan Steel Ltd v Martin. This was a case where a vessel collided with a dock wall owned by the British Transport Commission. It was held that the BTC had no duty of care in inspecting the wall to see if ships berthing there would suffer any damage. This was also the decision in the case of DSN v British Ports.
Elizabeth Reese, in her paper, cited that negligence is the most common cause of action used against public authorities. The first case of establishing negligence as a tortious liability in the context of port authority was the case of Dutton v Bognor Regis UDC.
3. Force Majeure and Port Authority Liability
Whilst negligence is the main area wherein port authority liability arises, it may be necessary to examine other areas too in order to give a full account of the law as it stands. For example, the force majeure clause is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime or an event described by the legal term act of God (hurricane, flood, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. It is suggested that force majeure events fall into two categories. The first is where there has been some kind of government intervention, likely leading to frustration of the contract. This was seen in The Eugenia where cargo was requisitioned under a compulsory order likened to acquisition of cargo by a legal process. Here it is suggested that liability shall be determined by the application of s.8. The second category is where the port simply closes due to the happening of an event. An example of this would be where there was a docking arrangement to discharge cargo, yet said cargo never left the ship because of a port authority decision to disallow entry into the country. The second decision is in effect a decision to detain the cargo, and it is suggested that to detain is an act of bailment and so proper liability should attach. Nonetheless, it is likely that neither decision will bear fruitful regarding port liability as authorities can successfully argue that they were not in the contemplation to create legal relations stage with respect to the contract and thus will not be held liable.
3.1. Definition of Force Majeure
A definition of force majeure is a key starting point in considering the legal implications of force majeure events. Legally, the definition of the term is inconsistent and can be found in a range of different documents including international conventions, contracts, and domestic legislation. A basic definition is an event that is outside the control of the contracting party and could not have been avoided through the exercise of due care. It is the causation element of the force majeure event being outside the control of the party, which highlights the link to negligence as an exclusionary factor. This is reinforced by the statement that force majeure events are unexpected or beyond what was contemplated by the contract. In terms of an international convention, the definition will often be found in the interpretative provisions of the convention and apply to the convention’s scope as opposed to the contracts of individual private parties. An example is Article I of the International Convention on Civil Liability for Oil Pollution Damage 1969, which is one of the conventions that is said to be the inspiration for the international regime relating to the liability of ports and port authorities. This Article refers to a force majeure event as being an act of war or a natural phenomenon of an exceptional, inevitable, and irresistible character.
3.2. Legal Implications of Force Majeure
In essence, the legal implications of force majeure determine if a party which seeks to rely on this clause to alleviate it of punishment for non-performance in a contract is able to do so. The central part of these implications rests on causation such that the event must directly prevent the party from performing its said obligations under the contract. Generally, the burden of proof falls on the party seeking to rely on force majeure and it often is not enough to show that performance has become more onerous due to an event which was not specifically related to the clause. The possible impact of this first point would serve to protect the Port Authority in the event of a general strike in the shipping industry which sought to slow down operations at a specific port when the contract was directly related to performance of tasks which advance industry efficiency at that said port, as opposed to the global industry. In addition, the force majeure clause will be strictly construed against the party seeking to rely on it such that any ambiguity in the clause will result in very little favorable interpretation. This adherence to the clause will further serve to protect the Port Authority as it will reduce the chance of the contract being frustrated or in the event of frustration it minimizes the risk of delays as a contract will be terminated upon a frustrating event. This is contract would be a specific example of the Port of Vancouver contracts with grain farmers to ship product and store it within the Port. The clause would likely protect the Authority from a potential lawsuit in the event that a farmer sought to have product diverted to another destination due to unavailability of space at the port.
3.3. Impact of Force Majeure on Port Authority Liability
The modern view of force majeure is that it will not affect liability unless it is a specified event which is beyond the control of the authority. This much was held in the “tugboat Baltimore” where the court held that striking dockworkers were not an event of force majeure and thus the port authorities were liable for a collision between tugs. This approach has been further developed and it is generally accepted that if force majeure is to be a defense to liability, it must be expressly provided for in the contract. The effect of this will mean that some public law port authorities will not be able to rely on the defense of force majeure as statutory powers to execute compulsory duties are not considered to be obligations of a commercial contract.
Should a specified event of force majeure occur, port authority liability will depend on whether the obligations of the contract are suspended or the contract is frustrated. The approach taken in Hong Kong in the Acquasure will mean that the initial presumption will be that the contract is not frustrated. This approach closely follows English law as Hong Kong Law is drawn from the common law and the House of Lords in a recent decision held that frustration is not easily recognized and the proof of frustration will result in the automatic termination of the contract.
4. Comparative Analysis and Case Studies
From those two main chapters and one subchapter, it can be concluded that both negligence and force majeure, which are two legal liabilities that can be imposed on a port authority, have their own impact and it differs in terms of their vulnerability to create an exemption clause and limits to the extent of liability. And it is in line with Fung’s statement that different types of loss can be caused by a single incidence of negligence. When looking into the combined impact of both negligence and force majeure to create an exemption clause and limits to the extent of liability, there will be a downgrading of the moral and legal obligation of the port authority itself in running their functions or duties to achieve the higher standard provided by the port and harbor regulation. Safety and success are often a matter of doing all things right, and to a very high standard. This is an ongoing process of improving skills, technique, and technology to make things more secure and minimize accidents. Then, the provision of law itself was made to make the maritime community feel more secure and get a guarantee of the services.
The next section HQ developed will reveal some certain researches and evidence which are concluded by many researchers based on the head title in two (2) main chapters:
4.1 Comparative Analysis of Negligence and Force Majeure
4.2 Case Study 1: Negligence in Port Authority Liability
4.3 Case Study 2: Force Majeure in Port Authority Liability
4.4 Case Study 3: Combined Impact of Negligence and Force Majeure
4.1. Comparative Analysis of Negligence and Force Majeure
In carrying out port authority obligations, negligence and force majeure relief can impact the amount of liability. Negligence is defined as the failure to act reasonably and prudently, in discharge of the duty of care in certain act or omission when the duty of care is owed to a particular person, whether generally or in specific or statutory duty. It must be proved by the claimant and the test of whether the defendant has been negligent is the same for all negligence actions. As compared to force majeure, negligence is a clear opposite. Force majeure is a situation in which a party is unable to fulfill its obligations because of an event beyond its control. It provides that any port authority be discharged from all liabilities for failure to perform any obligations under the contract if the failure was caused by force majeure. It is difficult for the authority to escape liability using force majeure due to recent case law setting a very onerous burden of proof.
Once it has been decided that the port authority has acted in negligence, the burden of proof now switches on to the defendant of the authority. Under the Convention on the Contract for the International Carriage of Goods by Road (“CMR”), the defendant has a very heavy burden to prove that the loss or damage was not due to its wrongful act or neglect. This is shown in the reputable case The Kriti Akti where the defined burden of proof was to ensure the cause of damage did not result from the contract. The appellant had failed to disprove negligence and there was the presumption of a sufficient case to answer. So it was concluded that there must have been a negligent act by the defendant, which breaks the duty of care in which they owe to the cargo. In comparison with force majeure within the same convention, the burden of proof is much less onerous to the defendant. In the same case, this was shown where it was held that force majeure provided a complete defense exoneration from the duty to show the cause of the loss or damage and the prescribed liability said it shall not apply. This is evident that even with the same contracts, the ability to escape liability is much higher with force majeure.
4.2. Case Study 1: Negligence in Port Authority Liability
The first specific incident giving cause to the claim of negligence on the part of the NPA was when the vessel reported her position as being off Felixstowe (25th November). That report was late in arrival due to the fact that the Vessel Traffic Service (VTS) radar facilities at Harwich and Coastguard Contact Centre had no plot on Andros throughout the 24th and 25th November. When VTS did eventually get a plot on Andros later that day, the Port authority was not contacted to warn the vessel until the morning of the 26th November. By that time, it was too late; the NPA did not warn Andros of the sandbank hazard and the vessel ran aground.
The Andros wreck took place on 1st December 1989 when the Greek registered vessel of the Ro-Ro class ran aground on the notorious Shipwash sandbank, 4 miles off Felixstowe. As a result of the stranding, the vessel suffered damage to her bottom and stern areas. After temporary repairs were effected, Andros sailed to her final destination at Rotterdam where divers’ inspection showed the damage to be more serious than originally thought. Subsequent to further but unsuccessful attempts of effecting permanent repairs at various ports in the Mediterranean, Andros was eventually declared a constructive total loss (CTL).
4.2.1. Facts
4.3. Case Study 2: Force Majeure in Port Authority Liability
The second case study is based on a hypothetical scenario where a port authority is faced with a claim in relation to damage caused to goods stored within a warehouse situated within the port. The port authority rented the warehouse to an importer of goods in an attempt to diversify their sources of revenue beyond the normal revenue stream of collecting wharfage levies. Following damage caused to the goods during a fire, the importer proceeded to sue the port authority claiming the damage resulted from the authority’s failure to keep the warehouse in a safe and reasonable condition. The importer argued that the port authority had breached an implied warranty that the warehouse was suitable for the storage of the kinds of goods that were being imported. In adjudicating how the law of negligence applies to the liability of a port authority, we must consider a number of factors, especially in relation to the duty of care owed to those who lease port facilities. The first question is whether the port authority owes a duty of care to the merchant who leases port facilities, including storage space such as a warehouse. In most instances the answer will be yes, given the modern approach to defining a duty of care as a standard of which a reasonable person in the defendant’s position would have regard to the possibility of damage being caused. This is known as the standard is the ‘reasonable man’. In ascertaining the breach of duty and extent of liability incurred, a consideration of the port authority’s immunity as prescribed by statute may greatly impact the manner in which legal proceedings are conducted. The New Zealand case of Chagneaud v Attorney General for Trinidad and Tobago “Civil Aviation and the Public and Private Necessity Defences” is a good example of how the immunity and or statutory compliance may bar an action of negligence against a port authority. In this matter the defendant argued that he was acting on behalf of the government and as public necessity demanded, had used the plaintiff’s landings to store vehicles involved with the war effort. The Court had struck out the plaintiff’s statement of claim on the grounds that the authority was competent and acting within the powers and duties afforded to it under the defence regulations and that it was at all relevant times carrying out a strictly government mission.
4.4. Case Study 3: Combined Impact of Negligence and Force Majeure
Unfortunately, in English law there is a lack of cases upon which to build a deep and convincing analysis of concurrence. However, the few cases in which negligence and force majeure are claimed in tandem aid in providing some evidence to the likely judicial treatment of a claim for liability in these circumstances. Aforementioned in the negligence section, if an act of force majeure is claimed under the Defence of the Realm Act 1802 during wartime, it is highly likely that failure to perform a required statutory duty can be treated as negligence. The Elmvale is one such case in which negligence was found. The defendants being the port authorities at Goole, failed to properly block a channel in the river Ouse that had become dangerous to navigate due to military activity. They were, however, instructed by the River Conservators to block the channel properly with two ships.
On deposit of the ships, the port authorities requested that all river and canal conservators give fresh orders. The plaintiff, a shipowner sought to recover damages from the defendants in negligence for the two vessels were not lodged against P. In doing so the river became impassable to navigation. This was disallowed since the conservators had only requested the defendants to block the particular channel which they had done. They were held negligent, however, in requesting the further instructions from the conservators in a time of war when the Defence of the Realm act was in force. This was seen as a breach of duty owed to the public as it was known to the defendants that the act was to survey all rivers and canals and to take temporary control of those necessary in the interests of national security and safety.
5. Conclusion
Negligence liability is in fact broader than force majeure as port authorities may be liable for damage that occurs with no direct action, and a ‘no-fault’ liability may be established on the authority based on strict liability statutes or authority acquiescence to the potential damage. This has been identified as a potential area where port authorities could seek to avoid excess liability by insurance, as mentioned in the case of New Zealand port authorities who wished to avoid Marine New Zealand legislation that would increase their liability.
The definition of whether negligence law is applicable to port authorities is often defined within individual jurisdictions and varying depth. However, whether it be application of general negligence or specific environmental law, the effect is usually the same in that negligence proves costly for port authorities. An examination of the standard of care expected of port authorities has shown its similarity with the law of private individuals as the requirement to take greater care is dependent on the likelihood of damage, the foreseeability of the event, and the severity of consequences. This has been supported by the law in the United States, which has mentioned shipper expectations, economic factors, and modern safety and surveillance systems as criteria to determine the level of care if an incident occurs.
Summary of Findings
This research began with the intention of examining the differing degrees of liability faced by port authorities during events of force majeure as opposed to negligence. Analysis in the preceding chapters has revealed some interesting and substantial findings in respect to the law and regulatory rules in specific jurisdictions, the role and effect of insurance, and overall impact on port authority liability. In regard to force majeure, it has been shown that events which are defined as an ‘act of god’ or beyond the control of man exonerate the authority from liability. This is widely supported by case law and effectively limits liability to the amount of revenue available from the event. This is somewhat conclusive in most cases; however, events in certain jurisdictions may require port authorities to prove due diligence and take steps to avoid loss, i.e. it may require the authority to show that it could not have avoided the detrimental effects of the force majeure event.
5.1. Summary of Findings
The first part of this essay, which is about negligence, has shown that if the Port Authority is acting ultra vires or beyond the realm of its statutory powers, then it shall be liable for its negligent acts. The first party has to prove their case to show that the Port Authority is acting beyond its statutory powers and doing something it is not supposed to do, or being negligent in the performance of its functions. Unless the authority can prove that its state of mind would have resulted in the act not being a fulfillment of its duty, the duty of care forms the most important part of a negligence cause of action. To prove a negligence cause of action, the claimant has to prove the same elements as in the tort of negligence: that the Port Authority owed a duty of care to the claimant and that it breached that duty of care. The standard of care required when a statutory authority is performing functions or a duty will be that of reasonable care and skill, as was held in Corn Orm. Hartley also supported this standard of care required under section 1. To satisfy the claimant’s cause of action under negligence, they have to prove that there was a breach of the duty of care owed by the Port Authority and that the loss or damage suffered by them was a result of that breach of duty. In cases where there is discretionary power available to the Port Authority, it is assumed that no duty is owed, except where the loss to an individual is certain or the damage to their rights can be considered as an effect of decision making.
5.2. Implications for Port Authority Liability
Negligence plays a fundamental role in the determination of liability and the ensuing ability to claim force majeure. It indicates that poor decision-making or failure to take reasonable precaution will result in an unsuccessful claim for force majeure. This is consistent with the findings of Janssen (1997), where negligence is a combination of objective (standard of care) and subjective (presence of mind) elements and force majeure is unsuccessful where negligence is proven. In this scenario, where there has been no damage, the liability rests with the party wanting to excuse performance. This would mean that in a situation where a port authority is no longer able to uphold its contract with a stevedore due to unforeseen circumstances beyond its control, if the stevedore is successful in proving force majeure and in turn the contract is frustrated under rights protected by force majeure, the liability still rests with the stevedore for damage caused from non-performance.
Should force majeure be successful, those capable of proving force majeure will not have full responsibility for damage caused from non-performance. This has potential to minimise the liability of port authorities in comparison to situations involving contracts frustrated under common law. Frustration of a contract will result in no further performance of the contract and automatic termination of the rights and obligations performed to the point of frustration. This will lead to less damage in comparison to situations involving force majeure, where it can be presumed that the contract will be resumed at a later date and thus the rights and obligations are not terminated.
5.3. Recommendations for Future Research
The effects of the negligence and force majeure exemptions of the Harter Act and the Carriage of Goods by Sea Act. The examination of these two acts led to the key findings that when an incident occurs involving the exemption of force majeure, it is extremely difficult for a shipper or a third party to recover any sort of damage compensation from a carrier. Negligence adds another level to this scenario by showing that since force majeure is an event or occurrence that is outside the control of a party and not due to any error or negligence on their part, then it is extremely difficult to see how force majeure could amount to a fault on behalf of the carrier. This is particularly relevant to the carriage act whose s4 (2) states that the burden of proof of the cause of damage, the nature of the act or omission and fault of the defendant shall be a matter for determination by the law of the relevant court. Examining this provision of the act provided key insights into the burden of proof required by a party attempting to claim liability against a carrier and hence recommendations for future studies based on this act will be more accurately detailed in the following subsection concerning benefits and comparisons.

Tags: Examining the impact of negligence and force majeure on port authority liability

The best research paper writers are just a few clicks away

Place an order for your dissertation in 3 easy steps. Takes less than 5 mins.