Load Brokers & Shippers Held Liable in U.S. Crashes

Michael Ludwig

Michael Ludwig

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Jul 6, 2009
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Several months ago the Appellate Court of Illinois found that C.H. Robinson and the shipper (Tyson) were to be held responsible for the actions of a carrier, hired by CHR and loaded by Tyson, who did not carry enough liability insurance. The award was for $23+ million. Google Sperl v. C.H. Robinson Worldwide.
Recently, a second case in Illinois, Hoffman, et al v. Crane et al, was awarded the same way ... the carrier was involved in an accident and the load broker and the shipper were also held liable in conjunction to the tune of $27.67 million. This has now gone from a one-off anomoly in the courts to potential case law.
What is the general consensus among load brokers on here about such cases?
 
Hopefully, our courts here in Canada will not follow the verdicts of the cases you mentioned. The best defense for a broker, is to be able to prove that you did everything correctly in your selection of the carrier. Ensure that the carrier's insurance policy is current. Check references. Check, check and double check and maintain up to date files. Try to have your relationship with your customer and the carrier clearly defined. In other words, as a broker, you are NOT a carrier. Keep your name off the Bill of Lading. Remember, in the event of a serious problem that lands you before a judge, he/she will not be very familiar with the world of transportation and its various terms and definitions and that unfamiliarity could be a problem. In order to sleep more soundly, have an insurance policy that will provide adequate protection in the event that we become more like our American neighbours and their infatuation with litigation.
 
Was an interesting read Mr. Ludwig.

The paragraph below is what got my attention, and I believe it shows the need for EOBR's. If everyone was playing by the same rules, then rates would have to improve, otherwise carriers would basically be working for free.

"Pleasants testified that after talking to Henry on March 29, he filled in the driver's name as "DeAn" on the dispatch sheet and faxed a copy of the LCS to Dragonfly. According to the LCS, Henry was required to stay in constant contact with CHR during delivery. CHR imposed fines on the drivers to ensure timely delivery of a load. He was not surprised that Henry would not make any money on the trip if she followed federal regulations."


Here is the link for others:

http://www.state.il.us/court/Opinions/AppellateCourt/2011/3rdDistrict/March/3090830.pdf
 
So I am wondering in the case of a Canadian load broker and shipper with a load destined to the USA and something terribly went wrong while the carrier is in the USA, would you think the same law could apply as the 2 cases stated as per below?
 
The way I read the story - CH had complete control over the driver, they dispatched and controlled his movements. We have had brokers who wanted to talk to the driver directly but we do not allow it as they are our driver, we do all the communications.
 
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I for one cannot see as to why being a Canadian carrier or broker would have any bearing on this. Ambulance chasing lawyers could care a less where you are from - it is just sue sue sue. Litigation is what they live for.

TQL from Cinci will probably be the next one to get nailed by this as they will only dispatch your driver and will not send a confirmation showing shipper and consignee until they have dispatched the driver.
 
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Some of these large 3PL's are unreal. They want to dispatch the driver, they want to set the rate, they want to set the fuel surcharge. Next they will want thier name on the door and the trailer. They want everything but to actually be a carrier. Sad thing is the only reason they get away with it is that carriers let them.
 
So, If I read this right, there is probably no way that anyone can afford to pay for insurance to cover a $23 million dollar award.

Accidents do happen (not today I hope, he says touching wood and keeping his fingers crossed) and, hat being the case, why would any trucking company not want to have brokers dispatch their trucks?

Let the brokers be on the hook for the big lawsuits in case of accidents, correct?
 
Hey Manitoba Moose,

Agreed, passing the buck on liability would be a fun thought… Lets play devils advocate here for a minute:

So…. Take a perfectly good broker who would normally assist a carrier in filling voids in their service area, who would take the risk of the shipper not paying (even when they don’t, we do), who would assist by ensuring all of the information required to perform a move is up to date and who would help a carrier by calling ahead to ensure freight is ready, book apts, etc… You want to take this broker and have them dispatch drivers? Said broker would then need several more departments including a safety and compliance department (who would need to review driver logs to ensure what they were dispatching was legal), said broker would have a tough time doing background checks and drug tests for a driver that may be in the US already… Not sure this is a good mix…

Perhaps brokers should stick to brokering and trust good carriers to dispatch their own drivers. Tongue firmly planted in cheek (most of you know what I’m talking about)…

Keep well,
Mike
 
Manitoba Moose, in the cases mentioned in this article, the total award for damages was in excess of the limits provided by the carrier's insurance. The court then assigned liability to the broker and the shipper to complete the compensation to the injured parties. Perhaps the lesson learned from this incident, is for carriers and brokers to increase their liability limit, especially if you operate in the US, where this litigation madness is epidemic.
 
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Loaders,

But what limit do we as carriers and brokers raise the liability limit to? There are no safe numbers. Because some Liberal judge and jury is going to allow Chucky - a drug dealing impaired driver with no licence or insurance - driving a stolen car running from the police after he robbed a liquor store - to do whatever he damn well pleases.

You know why? Because the driver forgot to count all the hours in his log book 9 days prior and if he had done that he would have been 1 minute later on that road and the accident would not have happened.
 
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Granted, there is no "magic" limit, however the days of operating with a 2 million dollar liability limit over long gone. 10, 20, maybe an umbrella policy for an additional 10 on top. The limit will depend on a number of factors, how many trucks you operate and how many miles, where you operate, the calibre of your drivers and do you have an up to date safety and training policy, and last but not least, can you sleep soundly with the protection you presently have?
 
The best defence is an offence...as a broker we need to check our carriers out before using them. Make sure their BASIC score isn't over the threshold in any of the catagories. Minimize your risk in other ways by limiting how many carriers you use.
 
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Wow ... some healthy dialogue, and some really great comments ... that's nice to see :)

First off ... TQL, CHR, and other huge brokers ... We dispatch our own trucks, and they're all fine with that. You just have to be insistent and tell them that's the way it is done.

Loaders: I am assuming you are a load broker. There is no possible way for you to afford my rates if you want me to carry 50 million in liability coverage.

In short, there is no possible way to defend yourselves from a jury bent on making someone pay. For us Canadians, if such a judgment should come down, you simply cease all U.S. operations immediately, and never go back ... not even personally!

Freight Broker has touched on the proper tactic to some extent ... the best defense is a good offense. You can do all the preliminary legwork in the world, but like I said, nothing will protect you from a judge or jury bent on making someone pay. But what you can do is make sure your company is worth very, very little, if anything at all. As a trucking company rent your equipment from one party, your property from another party, and hire your drivers from a driver pool, and in turn make sure each of those entities is valueless as well ... the old adage "You can't get blood from a stone" seems to play well here.

It will still be years before tort reform in the U.S. is anything signicant, so in the meantime CYA is the order of the day.

Just my humble 2 cents worth :)
 
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