Ohio 43rd state to forbid truck contract rule

By Keith Goble, Land Line state legislative editor | Monday, January 25, 2016

Ohio is the latest state to act to outlaw an unfair clause in trucking contracts.

Gov. John Kasich signed into law a bill to do away with clauses in trucking contracts that are set up to protect shippers or to hold them harmless from anything that happens with a shipment.

The bill, HB71, swept through the statehouse with only three lawmakers voting in opposition.

Speaking on the Senate floor, Sen. Kevin Bacon, R-Minerva Park, said on the Senate floor the bill outlaws provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence.

“Basically what (shippers) are saying is ‘if you’ve done something wrong, you’re going to pay. If I’ve done something wrong, you’re going to pay.’”

Bacon said the bill limits the practice that has “gotten out of control.”

Starting March 23, the new law prohibits only those indemnification clauses that require the motor carrier to pay for the accidents, injuries, claims, damages, etc. that are caused by the negligent or wrongful acts of the shipper.

Mike Matousek, OOIDA director of state legislative affairs, says the new law is a reasonable and fair solution to address existing rules that essentially provide shippers and receivers with immunity from any damage caused by their negligence while a trucker is on their property.

He added that the new law prevents all parties to a transportation contract from granting themselves blanket immunity.

States lawmakers across the country have been active in recent years changing rules on indemnity clauses. To date, Ohio is the 43rd state to forbid unfair provisions from contracts.

A full list of states, and the laws where protections are in place is available. States yet to adopt protections are Delaware, Mississippi, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

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

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

Rep. Kristina Roegner, R-Hudson, added that the rules set in the new law are “not only fair and equitable, but should also reduce motor carriers insurance costs as now they would only be liable for their own actions.”

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

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