Montana House approves indemnity clause

By Keith Goble, Land Line state legislative editor | 2/13/2013

An effort to improve fairness for truck drivers doing business in Montana is halfway through the statehouse.

House lawmakers voted unanimously to advance a bill to the Senate that would add Montana to the list of states to do away with indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

“With this law you will be responsible for your own conduct, and you will indemnify someone for that conduct, but you won’t have to indemnify someone for something they do wrong that you have nothing to do with,”

Rep. Steve Fitzpatrick, R-Great Falls, said his bill is about safety.

“If you aren’t responsible and you don’t have to pay for your own conduct, you don’t have much of an incentive to be safe. That’s important, particularly in trucking,” Fitzpatrick told lawmakers.

States across the country have been busy in recent years changing rules on indemnity clauses.

In the past year alone, Alabama, Hawaii, Massachusetts, Minnesota and South Dakota acted to forbid the provisions in motor carrier contracts. Starting March 28, Michigan will become the 36th state to adopt the protection from the unfair clauses.

A full list of states, and the laws, where protections are in place is available.

Supporters say throwing out the clauses in contracts doesn’t change anyone’s ability to collect for damaged goods but will simply hold the responsible party liable.

Affected contracts in Montana would be defined as “a contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property for hire by the motor carrier, entry on property to load, unload or transport property, including the storage of property.

“This is a good bill. It levels the playing field,” Rep. Tom Steenberg, D-Missoula, told lawmakers before the vote. “Support small motor carriers and vote ‘yes’ on the bill.”

The protection would not apply to intermodal chassis, containers, or other intermodal equipment.

The bill – HB347 – is awaiting assignment to committee in the Senate.

To view other legislative activities of interest for Montana, click here.

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