RESEARCHTRAININGINFORMATIO N INSTITUT DU DROIT INTERNATIONAL DES TRANSPORTS ET DE LA LOGISTIQUE...

RESEARCH TRAINING INFORMATION

INSTITUT DU DROIT INTERNATIONAL DES TRANSPORTS ET DE LA LOGISTIQUE

INSTITUTE OF INTERNATIONAL TRANSPORT & LOGISTICS LAW

Intermediaries – Various Legal Situations

The Case of France

IRU Symposium – 21 February 2014

Frédéric LETACQ

1- Intermediary Types & Functions

The carrier performs transport

The forwarder (“commissionnaire de transport”) organises transport

The forwarding agent (“transitaire”) receives / forwards on


Definitions: Forwarder (“commissionnaire de transport”)

Transport Code (L 1411-1):Considered as forwarders: those who organise, under their responsibility and in their own name, the performance of a freight carriage operation by means of their choice on behalf of a principal.

Case Law: The carriage assignment is the agreement through which the forwarder commits itself vis-à-vis the principal to perform on the latter’s behalf any legal acts necessary for the carriage. It is characterised not only by the freedom which the forwarder has to freely organise carriage by ways and means of its choice, in its own name and under its responsibility, but also by the fact that it relates to the whole carriage from start to finish.


Legal elements defining the capacity as forwarder

1) Acts in its own name on behalf of the principal(as opposed to an agent)

2) Is an organiser and does not mainly perform physical services (as opposed to the carrier or handler)

3) Is free to choose ways and means and resorts to substitutes(fundamental criterion)

In return for this freedom of action => strict liability


Definitions: Auxiliaries – Forwarding Agents

Transport Code (L 1411-1):Considered as transport auxiliaries: those who contribute to the transport operation without actually performing it or providing the means to perform it.

Forwarding Agent: Legal representative – the forwarding agent’s functions are defined by its assignment, and usually restricted to receiving, warehousing, re-sending and administration (port passage). Forwarding agents may also organise, monitor and coordinate transport operations and book freight, container filling or emptying from carriers. They act on behalf of and in their principal’s name (≠ forwarder)


2- Rules of Admission to the Occupation

Regulated Occupations:

Carrier / Removal firm /Truck rental with driver => YES

Forwarder => YES

Agent - forwarding agent => NO / Freedom of tradedoes not require any specific registration


Forwarder Carrier / Rental Firm

Ref.: Decree n°90-200 amended 2011 + orders

Ref.: Decree n°99-752 amended 2011 + several orders (road transport package)

Authorisation to operate issued by the regional Prefect upon submission of the RCS company register extract (for companies) Prerequisite for registration in the trade register and issuing of licences

Registration omthe forwarder register

Location: French company – headquartersForeign company: main place of business

Registration in the carrier / rental firm register

Location: French company – headquartersForeign company: main place of business

Conditions : 2

…

Conditions : 4

Establishment requirement: premises suitable for the activity to keep documents (transport / accounting / personnel / social documents...)

Objective: avoid shell companies

Admission to the Occupation

Forwarder Carrier / Rental FirmProfessional competence:

The person in charge of transport assignments must hold a certificate of professional competence issued by the regional Prefect

The certificate is obtained via: - Written exam / -Equivalence of diplomas (level III / transport specialist or including 200 h of management)- At least 5 years’ work experience in management (uninterrupted + possible 40h internship)

Professional competence: The transport manager (in charge of permanent actual management of carriage or rental activities) must hold a certificate of professional competence issued by the regional Prefect

The certificate is obtained via: - Written exam / -Equivalence of diplomas (level III / restrictive list)- At least 10 years’ work experience in management (uninterrupted)

Financial standing requirements dropped in 2010

Financial standing: Own capital + reserves

Vehicles > 3.5 t => 9000€ for first vehicle, 5000€ per further vehicle

Vehicles ≤ 3.5 t => 1800€ for first vehicle,900€ per further vehicle

Good repute: Applies to management + the holder of the certificate of competence (either a single sentence prohibiting from engaging in a business activity, or several sentences for transport offences)

Good repute: Applies to all managers, the director and the corporate body (List of sentences extended by Regulation 071/2009. Cumulative sentences)


Forwarder Carrier / Rental FirmConsequences of registration:

A certificate of registration in the register is issued(The company’s various establishments are recorded in the register of the company headquarters as well as in the registers of the regions where they are located)

Consequences of registration: Leads to issuance of licences by the regional Prefect (in accordance with EC Regulation 1072/2009) : EU Licence => Vehicles > 3.5 t (allows domestic transport / international within the EEA / cabotage)Domestic transport licence => Vehicles ≤ 3.5 t (only covers domestic transport)

Sanctions: Criminal penalty: Unlawful practice without registration => Misdemeanour (1 year jail sentence and €15,000 fine) Provision of false information => Misdemeanour(2 year jail sentence and €30,000 fine)

Administrative sanctions: by the Prefect as advised by a Commission for administrative sanctions

Sanctions: Criminal penalty: Unlawful practice without registration => Misdemeanour (1 year jail sentence and €15,000 fine)

Administrative sanctions: by the Prefect as advised by a regional Commission for administrative sanctions (withdrawal of authorisation / licence / striking from register)


3- Contractual Framework


Forwarder Carrier Agent / Forwarding Agent

Commercial Code“regarding Forwarders” + Transport Code

Commercial Code“regarding Carriers” + Transport Code

Civil Code “regarding Assignments”

Standard contract for transport assignment

Standard contracts of road carriage(general or specific)

Freely set General Terms

System of contracts under French law

Transport assignment contracts and contracts of carriage

Forwarder

Transport assignment contract

Governed by:National law

Commercial / Transport CodesStandard assignment contract

Contracts of carriageGoverned by:

Standard contracts; CMR; Brussels Convention; CIM

Uniform Rules...

Goods flow

Contractual relationships

Benefits of the “transport assignment” standard contract

• Provides a legal framework for relationships between the forwarder and the principal

• Restricts the forwarder’s personal liability (proof of wrongdoing required for personal liability to be involved)

• Instates ceilings to automatic compensation• Instates periods of notice in case of breach of relations

Caution! As with any standard contract, the provisions of the assignment standard contract only apply unless otherwise agreed in writing between the parties


Admissibility of Actions

Action for contractual liability: • Consignor / Consignee against the carrier => YES • Consignor / Consignee against the forwarder => YES • Shipping contractor against the forwarding agent => YES

(commissioning rules; the shipping principal may also take action against the sub-contractor, Civil Code Art 1994)

• Non-contracting consignee against the forwarding agent => NO (no privity of contract)

Legal basis: L132-8 Commercial Code: "the consignment note amounts to a contract between the consignor, carrier and consignee or between the consignor, consignee, forwarder and carrier”


Admissibility of Actions

Action for payment: • Domestic carrier against the consignor or consignee => YES• International CMR carrier against the consignor or consignee => NOExcept if the former demonstrates that French law applies in addition to CMR (Regulation EC 593/2008 “Rome 1”, Art 5) [chosen law / law of carriers’ country if this is the same as the country of loading or receipt / law of the country of receipt / escape clause]• Forwarder against consignor / consignee, non principal => NO

even subrogate• Forwarding agent against consigner / consignee, non contracting => NO

Legal basis: L132-8 al.2 Commercial Code: “The carrier is entitled to direct action for payment of its services against the consignor and consignee, which stand as guarantors for payment of freight charges”.


4- Contractual Liability Aspects

Carrier against consignor and consignee => Presumption of liability for loss / damage / delay

Forwarder against consignor and consignee => Presumption of liability for loss / damage / delay + Liability for actions of substitute carriers (L132-4; 5 & 6 Commercial Code)

Forwarding agent – agent against its client (principal) => liability for proven default (commissioning rules; Civil Code art 1992) + in case of hidden assignment subcontracting => the main contractor answers for the subcontractor (Civil Code art 1994 § 2)


Case of the subcontracting road carrier

Case law before 2005 :The road carrier who freely subcontracts carriage becomes a forwarder => answers for the substitute carrier

Case law since 2005 (Commercial Court of Appeal 10 May 2005) :Subcontracting carriage does not entail qualifying as a forwarder for the subcontracting party except where the consignor has approved the substitution => the carrier who freely subcontracts no longer answers for the substitute carrier

ORTF Law - 8 December 2009 (Transport Code Art L 3224-1) :“The responsibilities of road carriers resorting to subcontracting are those foreseen for forwarders in the Commercial Code”=> Same liability as forwarder – answers for the subcontractor

(does not become a forwarder but is subject to the same liability)


IDIT - Institut du Droit International des Transports et de la Logistique

110/112, avenue du Mont Riboudet – F.76000 ROUEN

Tél : +33 (0)2.35.71.33.50

Fax : +33 (0)2.35.88.51.64

[email protected]

www.idit.fr

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