Policy & Compliance
The new BIFA Standard Trading Conditions will be available for Members as soon as possible, once they have fi rst been carefully assessed from a compliance perspective BIFA begins Standard Trading Conditions update
T he BIFA Standard Trading Conditions (STC) are one of the foundation stones of the relationship between BIFA and its Members. Since 1989, the STC have provided Members with a contract to conduct their forwarding relations with their customers – a forwarding contract in effect. These STC are reviewed on a periodic basis in the light of industry and legislative changes. The current edition became effective in 2021. The Association endeavours not to re-issue too frequently to minimise a Member’s administrative burden. However, since the UK left the EU, and with increasing global tensions that have increased trade difficulties and therefore risks to Members, the Association recognised that a thorough review was necessary in order to protect Members’ interests. For example, in the earliest versions there are few references to Customs activities. The first significant reference was to direct Customs representation as defined in the EU Customs code; the 2021 edition of the STC expanded this subject further. The review process has been undertaken by BIFA’s Legal and Insurance Policy Group in conjunction with our solicitors, Salvus Law. This policy group includes forwarding Members, in addition to legal and insurance experts. The aim is to ensure a legally compliant set of STC balancing the interests of Members and their customers to ensure compliance with The Unfair Contract Terms Act 1977. The original drafters of the 1989 STC achieved this goal, and it has been one of the guiding principles of every update of the STC. Whilst the redrafting process is ongoing, it would not be appropriate to comment on the changes to individual clauses. However, one of
the main ambitions is to re-write them using modernised language and, where possible, simplify them to make them more readily understood. For instance, the present clause 26 of the 2021 edition causes considerable confusion and work is ongoing to re-draft it to achieve the previously mentioned end result. We believe that this will make them more readily understandable for Members and thus easier to use. When BIFA issues the new STC, Members will have to incorporate them into their contracts with customers and bring them to their insurers’ attention. In such a situation there is always a transition period. BIFA believes that the most appropriate point at which to move from the 2021 STC to the new set is at the Member’s renewal date for insurance policies, such as their freight forwarder’s liability policy. At this point the Member will have to advise its insurers that it intends to start trading under the new edition of the STC. Incorporation At this stage Members must remember that to rely on the STC Members that for a written term to be considered incorporated by the courts, it must fulfil three requirements: • Firstly, notice of the terms should be given before or during the agreement of the contract. • Secondly, the terms must be found in a document intended to be contractual. • Thirdly, ‘reasonable steps’ must be taken by the party that forms they have to incorporate the relevant set of STC into their contracts with clients. It is relevant to remind all
One key point for each Member to consider is, at what specific date will it transition to using the new STC? Then, Members will have to decide how they inform existing customers of the fact. As all Members incorporate the STC in different ways, individual Member companies will have to decide what is appropriate for their business. The methodology is likely to be varied, including announcements on websites, emails and via all other communications with customers to raise awareness of this important change. However, there should be a more formal communication on the subject. This could be in the form of an email addressed to the managing director or proprietor of the client. Alternatively, where paper systems are adopted, a letter similarly addressed could be sent with monthly statements (including zero balance ones) to all customers. When considering the above process, Members should consider a few points: • Record keeping so that BIFA Members can demonstrate having taken reasonable steps to bring the change to the attention of the other party. • Timeframes for bringing the subject to the attention of a customer.
“ When BIFA issues the new STC, Members will have to incorporate them into their contracts with customers and bring them to their insurers’ attention
the term to bring it to the attention of the other party.
16 | May 2025
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