Adv. Gill Nadel
A decision was recently issued by the Magistrate's Court of Tel Aviv dealing with the question of how high should be a compensation given for loss of cargo.
The case involved loss of cargo sent from Liverpool Port to Ashdod Port, containing reading books and textbooks intended for institutional bodies before the beginning of the school year. The Israeli importer guided the forwarder whose services he hired, to make sure that the shipment is prepared with a single bill of lading, and that he takes off only after verifying with the exporter all the packages are ready for shipment.
What actually happened was that the agent in England confirmed before sailing that he had the relevant number of packages and even updated his representative in Israel about
the voyage’s details. However when the cargo reached Ashdod Port the client was informed that only nine packages (out of the twenty eight packages that had been ordered) had arrived and all the rest- were lost.
The importer filed an action to the court for the damages he suffered, and asked for compensation on two matters : firstly- direct damage ("financial "|( that is, concrete loss of expenses that can be financially evaluated, and secondly, indirect damage ("non-financial"), that is, harm to reputation, loss of future clients, pain, suffering, etc.
Regarding the direct damage, the court accepted the action of the importer, in light of the fact that the forwarder in Israel acknowledged his liability for loss of the cargo. However, regarding the non-financial damages- the court’s point of view was different.
In this case, the importer sued for a sum of 200,000 NIS for the non-financial damage- half of it for damaging his reputation and half for loss of present clients.
The importer claimed (and his claim was fundamentally accepted) that his failure to meet the set timetables and the loss of the valuable cargo itself, are very significant for a business and its reputation, acquired over the years. The importer also filed a written declaration reporting on a sharp drop in sales from those institutional clients who were badly hurt by the failure to supply the goods in time.
However so, the importer failed to prove his damages. Firstly, the importer did not prove that it had taken the required steps to minimize the damage in relationship with those clients who were hurt immediately after the incident, which would be to update the clients about the significant delay in supplying the goods. The importer also did not call representatives of those clients to testify about the size of their orders, nor did he present to the court any opinion regarding the clients who stopped doing business with him, and also he did not even list the clients of the corporation who agreed to accept their orders late. Worst of all, the importer did not prove the preventative steps that he had taken when he was informed of the loss of the cargo.
The court ruled that the importer did not thoroughly prove the causal link between the damage done to his reputation and the failure to supply the cargo on time, as well as not meeting the burden of proof regarding the harm done to his reputation, and he certainly did not prove the damage caused to his existing clients, for the loss of whom he had originally filed the action for non-financial damages.
Therefore, the importer was compensated with the insignificant sum of 16,000 NIS for the non-financial damage. The justification for this compensation rested on the fact that the court assumed that some damage had indeed been caused to the importer, but given the lack of supporting evidence presented, the court’s compensation assessment was low.
As a side note we would like to turn your attention to the fact that the court did not go into the question of the limitations on the liability of the forwarder under the bill of lading, as well as the question of whether the international forwarder was even liable to compensate for non-financial damages.
CA 37124-05 Tal Edna v. Avi Ram Cargo Ltd. Issued 11.5. 10. Representatives: for the importer: Adv. Nava Zohar, for the forwarder, Adv. Gabriel Disney.
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