Policy & Compliance
Know your BIFA Standard Trading Conditions 2021 – Clause 27 (B)
Last month we began the examination of Clause 27 with a detailed explanation of Clause 27 (A). This month we complete this important clause by analysing Clause 27 (B), which discharges the member liability in respect of services provided unless civil action is commenced within nine months of any event likely to lead to a claim
CLAUSE 27 (A) Any claim by the Customer against the Company arising in respect of any service provided for the Customer, or which the Company has undertaken to provide, shall be made in writing and notified to the Company within 14 days of the date upon which the Customer became or ought reasonably to become aware of any event or occurrence alleged to give rise to such claim, and any claim not made and notified as aforesaid shall be deemed to be waived and absolutely barred, except where the Customer can show that it was impossible for him to comply with the time limit and that he has made the claim as soon as it was reasonably possible Notwithstanding the provisions of sub-paragraph (A) above, the Company shall in any event be discharged of all liability whatsoever, howsoever arising, in respect of any service provided for the Customer or which the Company has undertaken to provide, unless suit be brought and written notice thereof given to the Company within nine months from the date of the event or occurrence alleged to give rise to a cause of action against the Company. for him to do so. CLAUSE 27 (B)
Comment on Clause 27 (B) In the context of this Clause, Suit be brought means commencing a civil action in a court. Cause of action means a factual situation, the existence of which entitles one person to obtain from a court a remedy against another person. Person in this context includes a corporate person such as a limited company. This is a very important clause. No matter what the merits of a claim, unless a person brings court action and notifies the BIFA Member of it within the nine-month period, then the BIFA Member has no liability whatsoever. If the claim is still the subject of ongoing investigation, then to avoid litigation an extension of the time limit should be sought. It was held in the case The Zhi Jiang Kou, Lloyd’s Rep [1991] 1 493 (which concerned the Hague Rules) that time limits are not waived because negotiations are taking place about a claim unless
there is a specific promise to do so, and a defendant is under no obligation to draw his opponent’s attention to a time limit. Because of this time limit, it is necessary to investigate the merits of a claim and deal with it promptly and assess its merits because, under the Civil Procedural Rules, the days are over for issuing a ‘protective writ’ without the need to take further immediate court action. However, the time limit for making suit under Clause 27(B) can be overridden by those in international conventions when they compulsorily apply. Examples are as follows: CMR Convention (international road carriage) a)Partial loss, damage or delay in delivery – 12 months from the date of delivery; b)For total loss – 12 months from the 30th day after expiry of the agreed time limit, or if no agreed time limit, from the 60th day
“ No matter what the merits of a claim, unless a person brings court action and noti fi es the BIFA Member of it within the nine-month period, then the BIFA Member has no liability whatsoever
10 | August 2024
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