Academic journal article Texas Law Review

What Should We Do with the Fire Defense, Late in the Evening?*

Academic journal article Texas Law Review

What Should We Do with the Fire Defense, Late in the Evening?*

Article excerpt

In 1851, Congress passed a law, which is still in force . . . .1

-Oliver Wendell Holmes, The Common Law

I. Introduction

The 1851 law to which Justice Holmes referred-the Limitation of Shipowners' Liability Act2-is now over 150 years old and it "is still in force." You may ask yourself, "Why?"3 Did the 31st Congress diligently craft a legislative masterpiece that would withstand the test of time by wisely anticipating future technological and economic developments? No. This 1851 law, rushed through with little debate at the end of the session,4 is an example of legislative largesse and favoritism that, while it may have been appropriate in 1851, may not be necessary or appropriate in 2005.

The Limitation of Shipowners' Liability Act contains a provision known as the Fire Statute5 that represents a significant departure from the almost-strict liability imposed by the common law on a shipowner operating as a common carrier. The Fire Statute provides a special exception from liability-the fire defense-which allows the shipowner to avoid all liability for cargo damage caused by a fire on board, unless the shipowner was personally at fault. Justice Holmes noted that it is "[a] very common phenomenon" that "[t]he customs, beliefs, or needs of a primitive time establish a rule or a formula. In the course of centuries the custom, belief, or necessity disappears, but the rule remains."6 The Fire Statute is a fine example of this phenomenon. Some such rules "adapt[] ... to ... new reasons which have been found for [them]. . . , and enter[] on a new career";7 however, there appear to be no currently legitimate reasons for the Fire Statute, and it simply persists in the U.S. Code as an outdated concession to a special interest group. When The Common Law was published in 1881, it was still "early in the morning" for this 1851 law; now that it is late in the evening, what should we do with the fire defense?8 This Note proposes answers to that question for Congress, the United Nations, and the Supreme Court.

In the 1920s, much of the international community adopted an essentially identical fire defense for shipowners by signing the Hague Rules,9 the predominant international convention on rules governing maritime bills of lading. In 2002, however, the United Nations Commission on International Trade Law (UNCITRAL) began working on a new Transport Law Project, which the United Nations hopes will replace the Hague Rules and bring uniformity to international trade law.10 Unsurprisingly, not all of the parties are satisfied with the existing preferential liability treatment of maritime common carriers, and one of the issues that UNCITRAL has yet to resolve is the allocation of risk between the cargo owner and the carrier in the event that cargo is damaged as a result of fire." The developing nations, as well as other nations responsive to cargo interests, seek a more balanced allocation of risk, but carrier interests, of course, do not want to give up the favorable liability scheme created by the fire defense. This Note focuses on the risk allocation choices available, ranging from strict liability for the carrier to no liability for the carrier. After considering the choices and the various schemes associated with each choice, I recommend that UNCITRAL abandon the fire defense and treat cargo loss caused by fire under a simple fault-liability scheme that makes the carrier liable unless it proves that it was not at fault.

In addition to the fire defense's role in the ongoing UNCITRAL Transport Law Project, there is currently a split of opinion between the U.S. circuit courts of appeals related to the application of the fire defense in light of the overlapping provisions of the Fire Statute and the Carriage of Goods by Sea Act (COGSA), which is the U.S. enactment of the Hague Rules.12 I argue in this Note that the U.S. Supreme Court, although unable to actually abandon the fire defense as long as the Fire Statute and COGSA are still in force, should not adopt either of the circuit's opinions, but should instead construe these statutes more favorably to cargo interests by assigning the burden of proof to the carrier to show that it was not personally at fault in the event of fire. …

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