FOLLOWING the commentary published by Freight & Trade Alliance (FTA) and Daily Cargo News (DCN) on 20 October 2017 "Damages of almost $1 million awarded against forwarder", Hunt & Hunt Lawyers have spoken to Jeffrey Lennon, the sole director of Freight Solutions and provide further considerations in terms of freight forwarder liability for misleading bills of lading.

The conversation with Mr Lennon makes this case and the upcoming webinar to be hosted by FTA even more important. More so than the Court Judgment, Mr Lennon was able to convey a sense that the circumstances in which Freight Solutions was found liable were similar to the position many freight forwarders find themselves in.

Key points made were:

• There was not any intention whatsoever by Freight Solutions to mislead the finance company. Freight Solutions did not even know the BOLs would be used to obtain finance;
• The house BOLs were issued at the request of the shipper to help facilitate clearance through Chinese Customs;
• The master BOLs were not used for this purpose as they were held by Freight Solutions as security for payment of freight.

It is important to appreciate that a freight forwarder (or any other company/individual) can be found liable for making misleading and deceptive statements, even if there was no intention whatsoever to mislead and deceive.

In this case, there was no finding by the Court that Freight Solutions intended to mislead or deceive any party. Rather, the Court made findings as to (a) what assumptions could be drawn from the existence and form of the Freight Solutions BOLs and (b) whether those assumptions were correct. By finding that some of those assumptions were incorrect, it found that the BOLs were misleading.

The major concern with this approach is that the Court looked at the BOLs from the viewpoint of a lay person, not someone who understands how BOLs work.

Making matters even riskier for freight forwarders is that the Court does not require third parties to take reasonable steps to protect themselves. It was noted by the Court in this case that negligence of the party alleging misleading and deceptive conduct will not prevent them bringing a claim.

In our webinar on this case we will highlight how this approach exposes freight forwarders to additional risk and that it is not sufficient to simply act honestly or assume third parties will take steps to protect their own interests. We encourage DCN readers to join our upcoming webinar with free registration available via www.FTAlliance.com.au/Upcoming Events.

Paul Zalai is director at Freight & Trade Alliance (FTA) and an advocate of the freight and trade sectors.
www.FTAlliance.com.au