STEVEDORES CAN BE PROTECTED FROM CARGO LOSS LIABILITY Peter D. Clark Stevedores historically have occupied a special relationship with ocean carriers. Their services in loading ships fulfill one of the carrier's responsibilities to cargo shippers.The unique status of stevedores provides a novel theory in admiralty law for extending certain bill of lading protections to stevedores that are not parties to the contract of carriage. These protections limit a carrier's liability for loss or damage to cargo in its possession.The primary protections afforded stevedores are the $500 package limitation and the one-year suit time limit found in the Carriage of Goods Act, also known as Cogsa. The issue of whether stevedores may benefit from exculpatory provisions in ocean carriers' bills of lading has been the subject of considerable litigation.In 1959, the U.S. Supreme Court in the Herd case considered the issue of extending carrier Cogsa limitations to stevedores. The court found nothing in the legislative history of Cogsa that indicated any intention of Congress to regulate stevedores or to limit their liability.The Supreme Court held that the negligent stevedore in the Herd case was neither a party to, nor a beneficiary of, the contract of carriage between the shipper and the ocean carrier. Therefore, the stevedore could not claim the benefits of the limitation provisions in the bill of lading. Numerous courts have interpreted the Herd case to mean that a bill of lading provision can extend Cogsa protections to stevedores, who are agents of the carrier, if the provision is clearly expressed. Such a provision is known in admiralty law as a "Himalaya clause." The term is derived from a 1955 English case involving the vessel Himalaya.Himalaya causes reduce the liability of the beneficiary (i.e. stevedore), despite the beneficiary's negligence against an innocent shipper whose goods have been damaged. Such clauses are not favored by the law and are given effect only when the intent to do so is clearly expressed in the bill of lading. Furthermore, any ambiguity in the bill of lading will be construed against the party claiming the benefit of the clause. The Florida case of Ram Metals (1989 A.M.C. 2215) illustrates how courts scrutinize bills of lading when interpreting Himalaya clauses. The plaintiff shipped a cargo to Miami aboard the Zim Miami. The carrier issued a bill of lading that specified that the plaintiff's cargo was to be carried f.i.o.s.t., which means "free in and out stowage and trim." Under this term, the discharging stevedore was to bill the plaintiff directly for its stevedore services.The stevedore negligently unloaded the plaintiff's cargo and the plaintiff sued the stevedore more than a year after discharge for cargo damage. The stevedore attempted to dismiss the suit because under the Himalaya clause it was an agent of the carrier entitled to the one-year time limit of Cogsa.The stevedore routinely had performed a stevedoring services for the ocean carrier and was regularly engaged by the carrier to discharge cargo from all of its vessels in Miami. The plaintiff argued that the stevedore was not beneficiary of the bill of lading provisions because of f.i.o.s.t. term identifies the stevedore as an agent for the carrier. The stevedore argued that the f.i.o.s.t. term was simply a cost-shifting device. The court scrutinized the Himalaya clause and found that a stevedore engaged to discharge cargo as an agent of the carrier generally would be protected by the clause. However, the court held that in this case the f.i.o.s.t. provision shifted the risk and the stevedore was not acting as an agent of the carrier in unloading the cargo. Accordingly, the stevedore did not fall within the protection of the Himalaya clause. Over the past 30 years the benefits of the Himalaya clauses have been extended on a case by case factual basis to include terminal operators, a crane operator, a dry dock company and a pier guard service. However, the clause has not been extended to cover inland truckers, freight forwarders and marine carpentry firms.In each case where the Himalaya clause was upheld the courts followed the Supreme Court's mandate in the Herd case. Any contract purporting to grant immunity from liability must be strictly construed and limited to the intended beneficiaries. End of Article ______________________- Here are some sample Himalaya Clauses that were found on the BIMCO web site. BIMCO Himalaya Clauses (A) For Inclusion in Passenger Tickets: "By accepting or receiving this ticket, each passenger agrees without prejudice to its other provisions and both on his or her behalf and on behalf of any person or child travelling with him or her or in his or her care that neither the Captain, Officers, Crew and other personnel of the vessel named in this ticket or of any vessel owned or in the service of the Company nor any person employed by the Company at any time before, during or after the contemplated voyage shall be liable in respect of anything he may negligently do or omit to do in the course of or in connection with his employment which shall cause loss, damage or injury (whether fatal or otherwise) to the person and/or property of such passenger, person or child as aforesaid. For the purpose of the agreement expressed in this Clause, the Company shall be deemed to contract on behalf of and for the benefit of all persons who are or may be its servants or agents from time to time and all such persons shall to this extent be or be deemed to be parties to the Contract contained in or evidenced by this ticket." (a) For inclusion in Passenger Tickets: "All limitations, exceptions and conditions herein contained as to the liability of the Carrier shall apply also to the liability, if any, of his agents, vessels, employees and other representatives, and also to the liability, if any, of the owners, vessels, agents, employees and other representatives of any substituted vessel." (B) For inclusion in Bills of Lading: Either "It is hereby expressly agreed that no servant or agent of the carrier (including every independent contractor from time to time employed by the carrier) shall in any circumstances whatsoever be under any liability whatsoever to the Shipper, Consignee or Owner of the goods or to any holder of this Bill of Lading for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting int the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause, every exemption from liability, defence and immunity of whatsoever nature applicable to the carrier or to which the carrier is entitled hereunder shall also be available and shall extend to protect every such servant or agent of the carrier acting as aforesaid and for the purpose of all the foregoing provisions of this Clause the carrier is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servants or agents from time to time (including independent contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to the contract in or evidenced by this Bill of Lading." Or "The terms of this Bill of Lading constitute the contract of carriage, which is between the shipper and the owner or demise charterer of the ship designated to carry the goods. It is understood and agreed that, other than said shipowner or demise charterer, no person, firm or corporation or other legal entity whatsoever (including the master, officers and crew of the vessel and all agents and independent contractors) is, or shall be deemed to be, liable with respect to the goods as carrier, bailee or otherwise howsoever in contract or in tort. If however, it shall be adjudged that any other than said shipowner or demise charterer is carrier or bailee of the goods or under any responsibility with respect thereto, all limitations of and exonerations from liability provided by law or by the terms hereof shall be available to such other." (b) For inclusion in Bills of Lading: "All limitations of liability and other provisions herein contained shall inure not only to the benefit of the Carrier, his agents, vessels, employees and other representatives but also to the benefit of any independent contractor performing services to the goods."