In cases where a number of claims are brought against a carrier concerning cargo loss arising from a common incident or cause, tactical and procedural issues can often play a significant part in maximising potential recoveries. An excellent example of this was provided by the decision in Volcafe Ltd v Compania Sud Americana de Vapores SA (2013) where the carrier's attempt to have individual claims dealt with separately was rejected in the Commercial Court, in a case where the successful claimants were represented by Clyde & Co.
The claims arose in relation to the carriage of coffee by CSAV from Peru and Colombia to Bremen over a six-month period. Nine of the ten claims alleged damage caused by "sweating" or condensation inside the containers during carriage. The tenth claim alleged damage to the cargo by ingress of water through a hole made in the container.
The carrier applied to the High Court for an order that the claims should be heard separately. This approach would result in a number of the smaller-value claims being dealt with under the fast track procedure, thereby potentially limiting the extent of costs that may be recovered as well as the ability to submit expert evidence. They also argued that the claims should be transferred to the County Court rather than the Mercantile Court in order to save costs. This proposed approach seemed designed to create an increased evidential burden and costs exposure for the claimants, thereby potentially improving the negotiating position of the carrier in relation to the claims taken as a whole. The claimants objected to the carrier's application and argued that the claims should be heard together in the Mercantile Court.
The procedural dispute was determined by Mr Justice Teare in the Commercial Court and he held in favour of the claimants. The Judge noted that the cargoes were all carried on the same terms and so any legal issues were likely to be common to all the claims. In addition, although no defence had yet been served, it seemed likely that the sweating and condensation claims would raise common issues about the carrier's system for preventing such damage. In these circumstances, the Judge felt that the most cost-effective course of action was for all the claims to be tried together. This approach meant that the court could consider the possible option of identifying one lead claim that might be held determinative of all the claims (or at least those where the damage was alleged to relate to a common cause). Finally, the Judge noted that the Mercantile Court had experience of dealing with small cargo claims arising from international carriage of goods and it was by no means certain that the costs would be higher in the Mercantile Court than in the County Court. It was therefore appropriate for all the claims to be transferred together to be heard in the Mercantile Court.
The decision provides a useful reminder of the potential significance of tactical and procedural issues when dealing with multiple cargo claims. However, it is important to note that in order for claimants to maximise the potential advantages that may be obtained by grouping claims in appropriate cases, it is helpful for details of all relevant claims to be submitted to Clyde & Co together where possible, to enable the most beneficial strategy to be developed from the outset.
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