Act of God
An argument advocating the use of this defence, as
contained in the Road Haulage Association Conditions of
Carriage 1998, and other conditions of carriage containing
a similar exclusion, for any loss or damage to goods in
transit arising from the torrential rain and subsequent
flooding of parts of the United Kingdom in the summer of
2007, together with the possible use of this defence in
future adverse weather conditions.
John Potter ACII
1st July 2008
1
Why use this defence?
1.
If it’s in the conditions the reasonable presumption is that the author
intended to use it in appropriate circumstances.
2.
This is a legal liability account. It’s a reminder that such an account
should never be used as a substitute for marine cargo insurance.
3.
Unlike a marine cargo policy, a haulage contractors’ liability type
account is written on the basis that the premium isn’t directly related to
the value of the goods.
4.
A similar, but less rigid, defence is available under CMR – Article 17.2.
5.
Global warming is changing the UK’s weather patterns, giving the
reasonable expectation of more violent weather. If this is so, it should be
for underwriters to change market expectations so that an Act of God
exclusion is used more commonly than it is today.
6.
A haulier carrying under Common Law status would prime facie have
the defence of non-negligence, without even having to resort to Act of
God.
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The role of the road haulage contractor in the United Kingdom
Road haulage contractors play a vital role in the distribution of goods and
foods throughout the UK. The country cannot do without the services of
this industry, and it is incumbent on the haulage contractor that it does all
it can to ensure goods are delivered to customers even though this means
travelling in weather conditions that can be extreme at various times of
the year. It’s a fact of life that all goods go on lorries for either part or all
of the journey from supplier to customer, the haulage industry having
proved beyond any doubt that it is the most flexible, and thereby efficient,
system for the carriage of goods from one place to another. In any case,
any argument favouring delivery by train is irrelevant to this paper
because many railway lines were damaged by flooding, preventing the
passage of trains for many days and, in some cases, weeks thereafter.
In order to save on costs most industries in the UK, from plastics to
pottery, from food to footwear, and so on, have adopted the ‘just in time’
method of supply. This involves producing only those goods that are
needed for immediate sale, thus abandoning the historic and economically
wasteful practice of producing goods for storage in warehouses, awaiting
call. The supermarket chains operate a small number of large central
depots, from which goods are picked to order and delivered to
supermarkets in an established routine, relaying on the supermarket
shelves being emptied as preceding products are purchased by customers.
This is a delicate balancing act in which the haulage vehicle acts as a
mobile warehouse, arriving at the supermarket at regular intervals,
ensuring that emptying shelves are replenished with fresh stock. It can be
seen just how vulnerable the ‘just in time’ system is to any delay or
interruption in the delivery of fresh replacement goods but that was one
of the major problems arising from the bad weather conditions in the
summer of 2007. If the lorries couldn’t get through, large populations
would have had to go without even the basic foodstuffs and other
essential goods forming part of everyday living. Tewksbury, in
Gloucestershire, was especially at risk of being cut off from the outside
world by the encroaching water, escaping by only a very narrow margin.
Hence the vital importance of the haulage industry in discharging its role,
and the justification for setting out in even the most foul of weather
conditions. This is the reason this paper is sympathetic to the haulage
industry and to the promotion of the Act of God defence in the
appropriate situation.
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Incidents in the UK that might have triggered the defence:
The Lynmouth Flood Disaster of the 15th August 1952 occurred after two
weather fronts, one from the mid-Atlantic and containing heavy
moisture, and the other from the Brittany area of France, containing
warm thundery air combined, with devastating consequences, to create
huge amounts of moisture in the air, exacerbated by cold, moist and
unstable air ascending up the north facing slopes of Exmoor,
introducing more moisture into the already heavy raining area. It is
thought this may well have been decisive in producing the excessive
rainfall in the Lyn catchment area.
The catchment area of the Lyn river totals 102 sq, kilometres, much of
which is plateau drained by steep-sided combes (deep valleys or
hollows in the hills). Some of the plateau is covered by moorland grass
growing from wet, peaty ground and other parts of it by heather and
bracken on well drained soils. On the smooth convex hills there were
few storage dips and ponds, which were quickly filled by the first rains.
When the soil profile became completely waterlogged, saturation and
surface run-off occurred.
From this point the flow of water would have been between 3 to 6 metres
per second. Combined with the narrow valleys the flow of water,
together with earth and rock debris, trapped boulders and trees, this
resulted in a 12 metre high wave travelling downstream at 30km per
hour.
The result of this natural phenomenon was:
Dead
34
Housing and building destroyed
38
Houses and buildings subsequently demolished 55
Houses damaged
72
Roads & farm roads damaged
110
Bridges destroyed and damaged
28
Lorries
2
Coaches, caravans & cars
25
The whole event arose out of nature, without interference from man.
(Source: www.geographyalltheway.com)
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The UK east coast floods of 1953 began on the 31st January 1953 with the greatest
storm surge on record in the North Sea at that time. The height of the surge was
recorded as:
2.74 metres at Southend in Essex,;
2.97 metres at King’s Lynn in Norfolk;
3.36 metres in the Netherlands. *
Although the latter* is not relevant for the purposes of a paper that is essentially
based on the UK weather situation it does, nevertheless, illustrate the power of
nature and may help to encourage the argument used herein to justify the use of
the Act of God defence.
The storm that caused the disastrous surge began in Scotland, blowing down
more trees there than were normally felled in a year and causing the sinking of
the car ferry, Princess Victoria, on passage from Stranraer to Larne, with the
loss of 133 lives.
Many telephone lines in Lincolnshire & Norfolk were brought down by the wind,
so virtually no warnings of the storm’s severity were passed to counties further
south until it was too late.
By midnight, Felixstowe, Harwich and Maldon (Essex) were flooded, with much
loss of life, and soon thereafter the sea walls on Canvey Island, in the Thames
Estuary, were breached and 58 people died.
The result of yet another natural phenomenon was:
South-east England
180,000 acres
flooded
24,000 houses damaged
300 people drowned
In the Netherlands
322,500 acres
flooded
46,000 houses damaged
1,835 people drowned
What is a surge?
Surges are caused mainly by the action of wind on the surface of the sea, with barometric
pressure a secondary factor. When pressure decreases by one millibar, sea level rises by one
centimetre. Thus, a deep depression with a central pressure of about 960 mb causes sea level
to rise half a metre above the level it would have been had pressure been about average (1013
mb). When air pressure is high, sea level falls correspondingly.
Around the UK, the effect of a strong wind coupled with very low pressure can be to raise sea
level in eastern England more than two metres. Fortunately, though, large positive surges tend
to favour mid-tide. They rarely coincide with high water.
(Source: www.metoffice.gov.uk)
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The Boscastle Flooding of the 16th August 2004 was caused by a
combination of heavy, thundery showers, themselves remnants of Hurricane
Alex which had crossed the Atlantic, that had developed across the South West
and aligned themselves with winds that had converged along the coastal high
ground around Boscastle, creating Cumulonimbus clouds 12,192 metres high
and kept them stationary for many hours. Slow moving thunderstorms caused
localised extreme rainfall over north Cornwall. The rain was extreme in both its
intensity and duration: up to 200 millimetres fell in 24 hours. Adding to all this,
storms grew out of a large depression area that dominated the eastern Atlantic
that day. It had sucked in pulses of warm, moist tropical air, including the
remnants of Hurricane Alex. These storms were channelled along the coast by a
strong line of convergence – a line where a moving airflow meets an opposing one
and the air is forced upwards. Higher air temperatures onshore may have
reinforced this uplift. Storm showers along the whole north Cornwall coast all
started at about the same time, 1pm. It is thought likely that this synchronised
timing was due to the convergence along the coast. The storms moved slowly up
the coast, shedding their load of thousands of tonnes of rain.
An estimated two million tonnes of rainwater flowed through Boscastle that day,
the steep sided valleys, known as “flashy catchments”, acting as huge funnels and
possibly producing true flash flooding. During the afternoon of the 16th, a
conservatively estimated 1,422 million litres of water fell in just 2 hours – over
197,500 litres per second. At its peak, in a 15 minute time-span, it is estimated
that over 632,000 litres of rainwater fell per second.
The physical and economic damage having been widely reported in the media, I
have not included the bare statistics. I believe the thing speaks for itself.
Source: geographyalltheway.com – The Boscastle Floods – 2004
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Definition of Act of God
This is something which occurs in the course of nature, which is beyond
human foresight, and against which prudence could not have been
expected to provide. It is something in the course of nature so
unexpected in its consequences that the damage caused must be
regarded as too remote to form a basis for legal liability.
(Nichols v Marsland 1876,)
An act of God is not one in the ecclesiastical and biblical sense.
(Pandorf v Hamilton 1886,)
This defence is only available in the case of rain so exceptional in
amount that no reasonable man could have anticipated it. A defendant
may still be liable if the force of nature was reasonably foreseeable or if
the state of affairs created by the force did not immediately lead to the
interference.
(Lord Maugham in Sedleigh-Denfield v O’Callaghan (1940.)
In Nichols v Marsland (1876) an extraordinary rainfall “greater and more
violent than any within the memory of witnesses” caused a stream and
ornamental lakes on the defendant’s land to swell to such an extent that the
artificial banks burst, and the escaping water carried away four bridges
belonging to the county council. Held – the defendant was not liable for this
extraordinary act of nature which she could not reasonably have anticipated.
The escape of water was owing to the act of God, and while one is bound to
provide against the ordinary operations of nature, one is not bound to provide
against miracles.
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Heavy rainfall & subsequent flooding in the UK in summer of 2007
The heavy rainfall and subsequent flooding that occurred in the United
Kingdom in the summer of 2007 has been commented upon regularly and
reported heavily in the media, so there is no need to delve into the area of
statistics. The question is whether the state of the weather was such that it
was so overwhelming that it could be classed as an act of God, in the
legal definition contained in Nichols v Marsland, (1876). The general
answer to this question seems to me to be that the defence may be
available in individual incidents that arose during the heavy rainfall and
flooding, where those incidents met the criteria of being unforeseen and
overwhelming, as defined in established case law, but not for the summer
weather as a whole.
Examples that may be classed as acts of God might be:
1.
The failure of the Ulley Dam, near Sheffield, had it occurred without
warning. It’s a debateable point whether the defence would have been
available if the dam had failed despite the tremendous efforts made to
save it, for those efforts implied foreseeability, as described in SedleighDenfield v O’Callaghan (1940). As with all cases, such an event would be
decided on the individual merits of the event that caused the claimed act
of God. Fortunately, the dam held, and the Act of God defence wasn’t
called upon.
2.
Severe flooding in places such as Leeds, Doncaster, Hull, Tewksbury,
and other places in the UK, all of which were featured regularly in the
media but only where there was evidence of unexpected and
overwhelming forces acting beyond the normal heavy rainfall that is a
regular feature of the United Kingdom’s weather pattern. Thus flooding
arising where it could be shown that weaknesses in the public
infrastructure, in the failure to manage watercourses properly, or in
building on flood plains without adequate drainage, would militate
against the successful pleading of Act of God.
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Availability of Act of God defence under RHA Conditions.
By virtue of Condition 9 (2) (b) the Carrier shall be liable for physical loss, misdelivery of or damage to any other goods comprising the Consignment unless the
same has arisen from, and the Carrier has used reasonable care to minimise the
effects of: (i) Act of God;
In adopting this wording the conditions give the carrier an extra
obligation before he is entitled to the benefit of the defence; that of the
duty of the carrier to “use reasonable care to minimise the effects of an
act of God.” But how can one minimise the effects of an act that, by legal
definition, is beyond the foresight and control of man?
Because the force of an act of God is so overwhelming it is unlikely that
anyone can do much to minimise such a loss, other than in the clearing-up
operation after the event. It would be better if the RHA conditions
contained an unqualified exclusion of loss or damage arising from an act
of God but they do not, so we have to deal with the situation as it is.
However, I am confident in saying that, as a career underwriter, I would
have happily considered the use of the Act of God defence in the RHA
conditions had it been appropriate to do so during the floods in the
summer of 2007. Had the Ulley Dam, outside Sheffield, failed without
warning, I probably would have supported the use of the Act of God
defence. However, as with all cases, the individual circumstances of the
event that brought about the loss or damage would be the deciding factors
in whether to, or whether not to, put the defence forward. It would then
be for the court to decide for or against.
On the issue of foreseeability, the state of the weather was clear to all
businesses throughout the UK by virtue of the Meteorological Office’s
weather forecasting service but it may reasonably be argued that an event
that would constitute an act of God could not be foreseen or forecast. It
has also to be remembered that businesses had to keep going in spite of
the inclement conditions. Haulage contractors are especially vulnerable
because the very nature of their operations exposes them to a wide variety
of weather conditions throughout the year and throughout the country.
One thus cannot reasonably criticise them for continuing to deliver goods,
especially goods that constituted the basic needs of everyday living. They
were doing their duty and, in the circumstances, can reasonably claim to
have been one of the UK’s lifelines in extremely trying times!
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The CMR Article 17.2 defence as a comparison.
Under this Article, “The carrier shall however be relieved of liability if
the loss, damage or delay was caused”…………”through circumstances
which the carrier could not avoid and the consequences of which he was
unable to prevent.”
The fact that this defence is available to CMR haulage contractors tends
to be supportive of the principle that overwhelming forces should not
cause a liability to fall upon them. It must, however, be remembered that
the goods must not be exposed un-necessarily where the risk of loss or
damage is reasonably foreseeable, for such action may expose the carrier
to an attempt at setting the Article 17.2 defence aside in favour of ‘wilful
misconduct’ facility available in Article 29 of the CMR Convention. This
comment should, however, be tempered with the fact that most weather
conditions are foreseeable, so the circumstances of a particular incidence
in which the weather is cited in a 17.2 defence must be so exceptional in
force that it could not have been anticipated by the carrier nor could it be
avoided.
Argument against using Act of God
There are very few instances that I know of this defence being used. This
invites the argument that, by it’s non-use (or virtual non-use) a custom of
trade practice of non-use has been established. Whilst this may be true of
other defences I do not expect it to apply in the case of Act of God. By its
very nature, an act of God, in the legal sense, is indeed a very rare
occurrence and, because of the courts’ great caution in allowing it to be
pleaded successfully, I think it is also equally unlikely that a court would
allow a custom of trade argument to succeed purely because of non or
rare usage.
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Conclusion
I believe there is a prime facie justification for the use of the Act of God
defence where circumstances that meet the criteria of the case law cited
have arisen, or may arise at some time in the future. There are
commercially sound reasons for applying it and for letting the market
know that it may be applied in the future.
Since a similar defence is, in theory, available under CMR, it creates a
contradiction between its use under that convention and its non-usage
under domestic conditions of carriage. Applying this defence does not
deny the haulage contractor the protection of his Haulage Contractor’s
liability cover. The nature of the indemnity given under this type of
policy means that the insurer:
a)
pays a sum up to the financial liability accepted under the conditions of
carriage or;
b)
applies any of the various defences available under those conditions or;
c)
agrees to pay the legal costs involved in any claim it chooses to defend
and pays up to the legal liability under the conditions of carriage, plus
both sides’ legal costs and any interest awarded, if judgement is given
against the haulage contractor.
A closing thought
Does modern day weather forecasting destroy the Act of God defence
altogether and consign it to the history books? If you think it does,
beware of mother nature’s pernicious ways of producing the unexpected
on the unexpecting. Remember the tsunami in the Indian Ocean on
Boxing Day 2004!
Warning
This paper is based upon opinion only. It is designed to challenge existing market thinking and practice. It should
not be used as a guideline in any legal dispute. It is for individual underwriters and their employers to decide upon
the merits of each case before deciding whether or not to apply an Act of God, or similar, defence.
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