DEVIATION UNCERTAINTIES RESULT IN UNPREDICTABLE LAWSUITS

“Deviation” as it relates to ocean carriage is one of the most important concepts in the law of shipping because of the severe penalties associated with it. It is also one of the most difficult doctrines to apply.

The term “deviation” was originally used in admiralty to describe the wandering of a vessel from the customary course of the voyage. The meaning was later expanded to include any variation in the vessel’s operation that increased the risk of the voyage.

Unreasonable deviations invalidate bills of lading and strip carriers of their statutory and contract defenses, such a s the one year suit time or the $500 package limitation. The doctrine has been used to impose strict liability on vessel owners for cargo damage resulting from carrier negligence or misconduct.

To complicate matters, the Carriage of Goods by Sea Act, known as Cogsa, does not define the term “deviation” or explain its consequences. As a result, American courts have been struggling with the deviation concept for years.

The term “deviation” was originally used in admiralty to describe the wandering of a vessel from the customary course of the voyage. The meaning was later expanded to include any variation in the vessel’s operation that increased the risk of the voyage.

Deviation originally pertained to geographic departures from the contracted route. The concept originated from marine insurance law. Underwriters were deemed to have assumed only those risks inherent in the contemplated voyage. If the carrier departed from the intended course, the deviation would deprive the shipper of his cargo insurance. The deviation justified voiding the shipping contract and holding the carrier liable for any resulting cargo damage.

These coverage problems have been eliminated by modern marine insurance; however, the deviation principle still remains. The shipowner has a duty to carry goods on the agreed voyage without unnecessary deviations. However, reasonable departures from the prescribed route may be permitted in order to save lives or property.

American courts have extended the deviation concept to include other material contract breaches.

These expansions are sometimes referred to as “quasi-deviations.” The most common application involves unauthorized deck stowage of cargo. This is considered such a fundamental breach of contract that the vessel becomes automatically liable for cargo damage, unless the on-deck stowage was customary in the particular trade or expressly agreed upon by the parties.

Delays in carrying the goods, failure to deliver at destination over-carriage of the goods to another port, and return of the goods to the original load port have also been held to be quasi-deviations. The theory is that since the goods have been subjected to risks, the bill of lading clauses limiting carrier liability are void.

Numerous deviation cases have been litigated in federal courts. Situations that have been held not to constitute deviation are misdelivery and non-delivery of cargo, negligent stowage and strandings.

In 1975 the Second Circuit (507 F.2d 68) held that the principle of quasi-deviation should not be extended beyond on-deck stowage of cargo covered by below deck bills of lading. Since that time there have attempted to expand the deviation concept. The doctrine has been held applicable to fraudulent misrepresentation in bills of lading, transshipments to other vessels during carriage and late deliveries.

Yet it has not applied when a vessel’s officers and crew engaged in the systematic theft of cargo, or for misdelivery of cargo even though the misdelivery resulted from corrupt or criminal conduct by the carrier’s agent.

Failure to provide covered storage to cargo after discharge to a pier has been held not to be a quasi-deviation, as well as gross negligence and willful misconduct in furnishing g an unseaworthy vessel.

In the S/S TFL Adams case, 596 F.Supp. 338, the court stated that the carrier’s failure to connect a refrigeration container to a power source during the voyage would constitute a quasi-deviation if the act was reckless.

A review of the case law from the various federal circuit courts reveals inconsistent rulings in the area of deviation. Considering the potentially devastating impact that this uncertainty can have on the shipping industry, perhaps the time has come for the U.S. Supreme Court to set down clear guidelines on the deviation issue. Otherwise the only certainties that will be associated with the concept of deviation are more unpredictable lawsuits.


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