Legal
BIFAlink
www.bifa.org
Know your BIFA Standard Trading Conditions
If you want to play a game such as football or rugby, or perhaps take up a pastime such as chess or bridge, then you are not going to get far unless you understand the rules of the game. At first glance, freight forwarding may seem to be fairly simple. All you have to do is get someone’s goods from one place to another; however, when something unexpected happens it is vitally important to understand your legal responsibilities and your potential liabilities. The BIFA Standard Trading Conditions (STC) could be called the rules of the game of freight forwarding and in the coming months we are going to explain what the various clauses mean and their importance to you in your business. How it all began Firstly, we need to glance back into history to see where the BIFA STC originated. Before BIFA there was the Institute of Freight Forwarders (IFF). This body had started life in the 1940s as the Institute of Shipping and Forwarding Agents when the London and Liverpool Agent Committees combined to make a National Forwarder Association. In the early 1980s there was a complaint made about the forwarding industry to the Office of Fair Trading by the British Shippers’ Council. There had been a number of disputes regarding liability when damage occurred and over whether the forwarder was liable as it was acting as an agent of the carrier. The complaint was withdrawn when the 1984 IFF Conditions were issued, which clearly defined the role of the freight forwarder as an agent or a principal. BIFA was formed in the late 1980s as a trade association to represent freight forwarding companies. The IFF continued with a role to provide services to individuals; however, the ownership and responsibility of maintaining the STC moved to BIFA and the first BIFA STC were issued in 1989. These were superseded as In the first of a series of articles on the BIFA STC, BIFAlink looks at why the STC are essential to protecting your freight forwarding business
necessary from time to time and the 2021 edition of the BIFA STC is the current version in use. The BIFA STC consists of a header and five sections as follows: • A clear statement to the freight forwarder’s customer that there are liability limits and indemnities included which should be noted; • A definitions and applications section. In this, the meaning of some terms used are clarified, such as where the BIFA STC apply in relation to the law;
that the provision of insurance is covered by conditions and also that the customer indemnifies the freight forwarder under certain circumstances. Typical situations that a freight forwarder will experience are that the customer will expect that if goods go missing, it will receive the full value as compensation, or that insurance cover has been automatically applied. The indemnities are a great defence when the customer does not give you accurate information or when you get unexpected costs from following the customer’s instructions. All clauses of the BIFA STC will be examined in detail over the coming months. Key aspect The most important aspect of using the BIFA STC is having them incorporated in the contract or contracts with your customer. Quite simply, if there is any dispute, you must be able to evidence that the STC have been brought to the attention of the customer and that it cannot say it was unaware of their incorporation in the contract between you and it. Furthermore, consumer legislation requires you to take extra steps to highlight the STC when dealing with private individuals or small ‘owner run’ companies. Incorporation of the BIFA STC is covered in detail in the guide to the use of BIFA Standard Trading Conditions 2021, which is available to BIFA Members from the BIFA website as a downloadable PDF at www.bifa.org > INFORMATON > THE GOOD PRACTICE TOOLBOX. Next month we will examine the definitions and application of the BIFA STC.
• The role of the freight forwarder; • The obligations of the customer; • Limits of liability; • Jurisdiction and law.
In this article we will start with the header, or opening statement on the BIFA STC: The customer’s attention is drawn to specific clauses hereof which exclude or limit the company’s liability and those which require the customer to indemnify the company in certain circumstances and those which limit time and those which deal with conditions of issuing effective goods insurance being clauses 7, 8, 10, 11 (A) and 11 (B), 12-14 inclusive, 18-20 inclusive and 24-27 inclusive. The customer’s attention is also drawn to clause 28 which permits arbitration in certain circumstances. All headings are indicative and do not form part of these conditions. In this statement the customer is being told that under certain situations the freight forwarder is either not liable or has limited liability for some events and actions. There is a clear indication
March 2022
21
Made with FlippingBook Annual report maker