A3 Freight Payment Blog

Shippers’ “Vicarious Liability” Increases…Again

This blog does not wish to add to the misery of shippers who are suffering from CSA-overload, but shippers should be aware that a recent development by the FMCSA has the potential of once again increasing their vicarious liability for the actions of their motor carriers.

The last few years have brought a torrent of issues and information to shippers regarding the Compliance Safety Accountability (CSA) and its implementation.

Naturally, the two biggest issues for shippers’ have been the increase in “vicarious liability” and the effects of CSA on motor carrier capacity and its knock-on effect upon costs.

Vicarious liability refers to the shipper’s liability for injury to persons or property due to the negligent actions of motor carriers with whom they contract to move freight. This is the typical “deepest pockets” play of the tort bar whereby plaintiffs seek out parties with the most assets to cover claims when the most immediate defendants (carriers) do not have enough resources.

On May 16, the FMCSA issued “guidance” whereby they seemed to state that a shipper cannot rely upon the agency’s ratings to prove that the motor carrier operates safely. Such reliance could help clarify if the shipper did proper due diligence and could mitigate his liability.

To some experts, especially those at the Alliance for Safe, Efficient and Competitive Truck Transportation (ASECTT), this guidance by FMCSA has the net effect of transferring liability to shippers’ in determining that a carrier is fit to operate. In legal parlance, such a change should normally occur as part of a “rule making process”.

A rule making process is a formal administrative procedure which a regulatory agency of the federal government promulgates new rules. The process includes public comment opportunities and/or formal hearings. Agencies issue “guidance” to complement previously set rules. In this case, it appears that the agency may have used “guidance” to dramatically shift the landscape of vicarious liability.

Shippers can read the ASECTT’s summary of what was released by the FMCSA in this Call for Action.

Posted by Ross Harris at 12:10 PM
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