Logistics: Bite-Size Insights

In this edition of Logistics: Bite-Size Insights, we highlight product liability risks to hauliers, provide an update on the requirements for animal and plant products coming into the UK and review the Freight Crime Bill’s progress.

Product liability risks

In our April edition we considered the liabilities that a haulier may attract in its role of Customs Agent. We highly recommended that any haulier carefully considers the role in which it intends to act and that the appointment is set out in clear terms in a document confirming the authorisation (often referred to as the “empowerment”) agreed between haulier and its customers.
There is, however, also a heightened risk with acting as an Indirect Agent and, therefore, the importer on record, when it comes to product liability risks.

The importation of a product from a ‘third country’ into the EU or UK during the course of a business for sale/supply potentially can result in the imposition of liability on the importer of any defective product that causes bodily injury or property damage, under Product Liability Directive 85/374/EEC (PLD) and the Consumer Protection Act 1987 (CPA) in the EU and the UK respectively.

On 28 September 2022, the European Commission published its proposal to revise the existing PLD. The revised PLD, among other things, replaced the concept of ‘producers’ with the concept of ‘economic operators’ who can be held liable for defective products.

The person responsible for a defective product is the “manufacturer”, while the list of economic operators to whom liability can in certain circumstances attach includes (a) manufacturers of a product or component; (b) the provider of a related service; (c) the authorised representative; (d) the importer; and (e) the fulfilment service provider or the distributor. A distributor of a defective product can also be liable where an economic operator established in the EU cannot be identified and where the distributor fails to identify such economic operator or its own distributor (when requested by the injured person to do so).

The revised PLD came into force on 9 December 2024 and each EU Member States will have until 9 December 2026 to transpose it into their national laws. The UK is no longer an EU Member State, and its product liability law regime will for the time being remain that provided by the Consumer Protection Act 1987, which transposed the old directive. How far the UK will follow the EU approach if and when it updates its own laws remains to be seen.

The revised PLD contains elements intended to make it easier for claimants to succeed in product liability claims against a wider range of potential defendants than before. This means that contracts will need to be checked to establish whether a haulier is indeed acting an importer by virtue of the agreement with the customer and how certain customs documents are completed. And when it comes to insurance protections, underwriters of freight liability policies may not envisage their insureds being deemed to be importers and thus exposed to the potential liabilities that such a role attracts.

Contacts: Shaan Burton, Barnaby Winckler

More Brexit relayed delays and uncertainty

The consequences of Brexit continue to be realised, and the financial impacts are still being felt through the haulage industry. One of those areas hit are those businesses dealing with animal and plant products coming into the UK.

As global supply chains begin to navigate the summer influx of moving plant and animal goods across borders, there is now more uncertainty as to what is required for those carrying such goods into the UK. Whilst the UK’s latest Brexit trade deal with the EU was, at first glance, welcomed by businesses, the Government has since made the decision to delay the planned implementation of sanitary and phytosanitary (SPS) controls on EU agri-food imports.

A delay to implementing additional measures may initially be seen as a positive step. However, business owners have stated that the delay simply serves to create a significant amount of uncertainty. In addition, many business owners and haulage companies have spent considerable sums in preparing for the original implementation deadline of the SPS controls of July 2025.

The industry is already being squeezed in every direction. Will this latest change in policy make the businesses wary of making changes in preparation of new Brexit requirements? This could of course lead to lack of investment in getting ready for new export/import requirements, resulting in the industry as a whole being faced with further delays.

It is certainly worth insurers and insureds discussing the impact of the various regulations and ensuring that, despite the uncertainty, insured hauliers are acting in compliance with the regulations in place now and in the future. It will be expected that lack of compliance will lead to claims for delay in delivery, damage to goods (particularly foodstuffs), and fines for breach of contracts in the carriage of the goods.

Contact: Shaan Burton

Freight Crime Bill - update

Following our update on the introduction of the new Freight Crime Bill (here), the date for the Bill’s second reading has been pushed back to 12 September 2025.

However, even in these early stages, the Bill is gaining support from the haulage industry. The Road Haulage Association is urging the industry to call on MPs to back measures to tackle freight crime. It has set up an online tool to make it easier to contact your local MP, asking that they support the RHA’s freight crime campaign and support the Bill at its second reading in September.

Significant investment is needed in the safety of hauliers and the cargo they carry. However, without official statistics as to the extent of the issue, investment from the Government is unlikely to be forthcoming.

Contacts: Shaan Burton, Joanna Manthorpe