Public Carriers and their Legal Liability

The common law relating to public carriers owes its origins to Roman laws created over 2000 years ago which were later imbedded in Dutch law and in turn incorporated into our legal system with the arrival of the Dutch in South Africa. The original law created by the Roman praetor, a magistrate responsible for ensuring the smooth functioning of Roman commerce, consisted of the praetor’s edict de nautis, cauponibus et stabularis, that is mariners, innkeepers and stable-keepers. The edict laid down that such people were strictly liable if they did not return goods entrusted to them. In other words, if they failed to do so, they would be liable whether or not they had been willful or negligent in regard to the failure to return the goods or to return them undamaged.

It is important to note that our law distinguishes between “public” and “private” carriers. Public carriers are those who carry goods as part of their trade or profession, usually for a fee or charge. Private carriers are those who agree to transport a particular item or goods but do not do so as part of their normal business activities. Private carriers are not bound by the law and will only be liable for loss or damage if they are negligent in relation to such loss or damage.

A contract of carriage occurs where the parties agree on:

  • the persons or goods to be transported;
  • the ticket, fee or freight charge;
  • the manner in which the goods or people are to be conveyed; and
  • the collection and destination points.

The parties are, of course, free to agree on terms and conditions. Although a binding contract of carriage can take place orally, it is customary for the terms and conditions to be recorded in writing. Often, particularly where the contract relates to the carriage of passengers, the transporter will issue a ticket which makes reference to terms and conditions recorded elsewhere. Provided it can be established that the reference to those terms and conditions would have been obvious or that the passenger ought reasonably to have understood that the reference was to terms and conditions of contract and would have access to read them, such terms and conditions will, unless illegal, be binding.

In the case of the transport of goods, the terms and conditions are set out in a document, often styled a “consignment note” or a “bill of lading”.

It is important not to confuse the “common carrier” of English law with South African law. Under English law, a common carrier, i.e. one who carries goods or passengers professionally is bound to accept such goods or services –provided they are within the scope of this routes and operation– and is strictly liable for the safety of those goods or passengers as the “insurer” of such goods and services. This applies, with a few exceptions, regardless of fault. Thus even if his vehicle is hijacked by third parties, his liability remains. The term “common carrier” is sometimes used in this country as being synonymous with a public carrier, but the English law provisions do not apply.

Almost all modern contacts of carriage contain provisions which exempt transporters from liability for loss or damage. The question which arises is to what extent may transport operators avoid such liability legally?

Prior to the coming into force of the Consumer Protection Act, 2008 (Act 68 of 2008) (CPA), on 1 April 2011, the position was entirely governed by the common law. There has never been any doubt that transporters could contract out of liability for their own negligence– but a question less easily deal with is whether they can avoid liability for gross negligence.

In the old cases of Adlington & Co and Naylor v Munnik (3 Searle, 187) the court resoundingly concluded that a carrier cannot contract out of gross negligence. In the latter case, the court held that

‘He is not exempted if he displays gross negligence or malfeasance, or if he employs such servants as are likely to be guilty of gross negligence or wilful misconduct.’

Years later, however, in Government of the Republic of South Africa (Department of Industries) v Fibre Spinners & Weavers (Pty) Ltd 1978 (2) SA 794 (A) at 807D the South African Appellate Division without referring to the earlier cases concluded that:

“In my opinion, there is no justification for so restricting the plain meaning of the words of the exemption clause, nor is there any reason founded on public policy why it should be held that, in so far as the clause refers to loss or damage caused by defendant’s gross negligence, it is not enforceable.”

The CPA has, dependent upon the circumstances, brought about sweeping changes. Provided that the person or entity making use of a transporter’s services (i.e. the customer) is not a juristic person whose asset value or annual turnover at the time of the transaction exceeds R 2 million, carriers cannot legally contract out of their own gross negligence. Section 51 of the Act prohibits an exemption of a supplier of goods or services from liability for any loss directly or indirectly attributable to gross negligence of the supplier or any person acting for or controlled by the supplier.

Since section 1(2)(b) excludes the scope of the CPA from corporate entities with the annual turnover or asset value referred to above, the question as to whether carriers can contract out of  gross negligence may remain an issue until it is considered afresh by the courts in due course.

At least one writer (see Contracting out of Liability for Gross Negligence by Ian Chadwick, De Rebus, December 2012) considers authoritatively that the better view is that modern law will no longer accept that a person or entity may validly contract out of their own gross negligence. He is well supported in this conclusion by the development of South African case law. In particular, Nicholls J in the South Gauteng High Court recently in in the South Gauteng High Court in Naidoo v Birchwood Hotel 2012 (6) SA 170 (GSJ) held that contractual provisions which exclude a party from enforcing his rights are contrary to the position that pertains under our new constitution. The judgment details many reasons for this view but the following paragraph sums up the position well:

“While the court in Afrox was of the view that the principle of contractual autonomy was paramount and the exemption clause was therefore not contrary to public interest, this finding must now be seen through the lens of the Constitution. In Brisley v Drotsky the observation was made that it was not difficult to envisage a case where certain contracts offend against the new social compact that the Constitution embodies. Decisions that proclaim that limits of contractual sanctity lie at the borders of public policy would receive enhanced force and clarity in the light of the Constitution and the values embodied in the Bill of Rights, so said the court.”

Accordingly, with the CPA ruling out disclaimers based on negligence in the cases where customers are individuals or small businesses and the courts heading definitively in the direction of refusing to uphold them, transporters would be well advised to avoid gross negligence.

The last issue for consideration here is to consider what amounts to gross negligence. Many tests have been applied. In the South African Supreme Court of Appeal case of Transnet Ltd t/a Portnet v MV 'Stella Tingas' and Another |LS|2003|RS| 1 All SA 286 (SCA), Scott JA put it this way at para 7:

“I shall assume, without deciding, that the exemption would not apply if the pilot were found to have been grossly negligent. Gross negligence is not an exact concept capable of precise definition.  Despite dicta which sometimes seem to suggest the contrary, what is now clear, following the decision of this Court in S v Van Zyl 1969 (1) SA 553 (A), is that it is not consciousness of risk-taking that distinguishes gross negligence from ordinary negligence.  (See also Philotex (Pty) Ltd and Others v Snyman and Others 1998 (2) SA 138 (SCA) at 143 C - J.)  This must be so.  If consciously taking a risk is reasonable there will be no negligence at all.  If a person foresees the risk of harm but acts, or fails to act, in the unreasonable belief that he or she will be able to avoid the danger or that for some other reason it will not eventuate, the conduct in question may amount to ordinary negligence or it may amount to gross negligence (or recklessness in the wide sense) depending on the circumstances.  (Van Zyl’s case, supra, at 557 A -  E.)  If, of course, the risk of harm is foreseen and the person in question acts recklessly or indifferently as to whether it ensues or not, the conduct will amount to recklessness in the narrow sense, in other words, dolus eventualis; but it would then exceed the bounds of our modern-day understanding of gross negligence.  On the other hand, even in the absence of conscious risk-taking, conduct may depart so radically from the standard of the reasonable person as to amount to gross negligence (Van Zyl’s case, supra, at 559 D - H.)  It follows that whether there is conscious risk-taking or not, it is necessary in each case to determine whether the deviation from what is reasonable is so marked as to justify it being condemned as gross.    The Roman notion of culpa lata included both extreme negligence and what today we would call recklessness in the narrow sense or dolus eventualis.  (See Thomas Textbook of Roman Law at 250.)  As to the former, with which we are presently concerned, Ulpian’s definition, D 50. 16. 213. 2, is helpful :  ‘culpa lata is extreme negligence, that is not to realise what everyone realises’  (culpa lata est nimia neglegentia, id est non intellegere quod omnes intellegunt).  Commenting on this definition, Lee in The Elements of Roman Law 4 ed at 288 describes gross negligence as being ‘a degree of negligence which indicates a complete obtuseness of mind and conduct’.  Buckland in A Textbook of Roman Law 3 ed at 556 suggests that what is contemplated is a ‘failure to show any reasonable care’.    Dicta in modern judgments, although sometimes more appropriate in respect of dolus eventualis, similarly reflect the extreme nature of the negligence required to constitute gross negligence.  Some examples are:  ‘no consideration whatever to the consequences of his acts’ (Central South African  Railways v Adlington & Co 1906 TS 964 at 973);  ‘a total disregard of duty’   (Rosenthal v Marks  1944 TPD 172 at 180);  ‘nalatigheid van ’n baie ernstige aard’  or ‘’n besondere hoë graad van nalatigheid’ (S v Smith en Andere  1973 (3) SA 217 (T) at 219 A - B);  ‘ordinary negligence of an aggravated form which falls short of wilfulness’  (Bickle v Joint Ministers of Law and Order 1980 (2) SA 764 (R) at 770 C);  ‘an entire failure to give consideration to the consequences of one’s actions’   (S v Dhlamini 1988 (2) SA 302 (A) at 308D).    It follows, I think, that to qualify as gross negligence the conduct in question, although falling short of dolus eventualis, must involve a departure from the standard of the reasonable person to such an extent that it may properly be categorized as extreme;  it must demonstrate, where there is found to be conscious risk-taking, a complete obtuseness of  mind or, where there is no conscious risk-taking, a total failure to take care.  If something less were required, the distinction between ordinary and gross negligence would lose its validity.”