Rhode Island lawmaker calls for outlawing truck contract clause

By Keith Goble, Land Line state legislative editor | Monday, February 01, 2016

An effort in the Rhode Island General Assembly that is being considered would put an end to the inclusion of unfair clauses in trucking contracts.

The House Corporations Committee heard testimony last week on a bill to prohibit indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

Sponsored by Rep. Patricia Serpa, D-West Warwick, H7166 would outlaw provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”

Serpa highlighted to the committee one scenario with hazardous materials shipments that is concerning to professional drivers.

“Over the years states have had a number of problems with hazardous materials not being packed properly or not notifying the carrier that he or she is carrying hazardous materials,” Serpa testified. “(These clauses) make the truck driver responsible for the delivery of the goods when in fact he had no knowledge of what he was carrying or no knowledge that it was kept improperly. This bill would no longer make him or her responsible.”

The Owner-Operator Independent Drivers Association supports the effort.

Mike Matousek, OOIDA director of state legislative affairs, says the legislation is a reasonable and fair solution that will prevent all parties to a transportation contract from granting themselves blanket immunity.

“Existing state law provides shippers and receivers with immunity from liability for any damages or injuries to a trucker and his/her equipment that are caused by the negligence of a shipper or receiver,” Matousek said.

“Truckers should not be held liable for damages or injuries that are caused by the negligence of shippers or receivers. Conversely, shippers and receivers should not be held liable for damages or injuries that arise from the negligence of a trucker.”

States lawmakers across the country have been active in recent years changing rules on indemnity clauses. To date, 43 states have acted to forbid unfair provisions from contracts. An Ohio law to prohibit the protection for shippers takes effect March 23.

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

Affected contracts in Rhode Island would be defined as “a contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property by motor carriers, entrance on property to load, unload, or transport property.

The Senate version, S2223, of the bill awaits consideration in the Senate Judiciary Committee.

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

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