REPORT ON THE DRAFT LAW OF THE LAND TRANSPORT CONTRACT

COUNCIL OF MINISTERS OF JUNE 22, 2007

The future regulation encompasses the land transport contract for goods and passengers and aligns with the most advanced regulations in our neighboring countries.
For the first time, liability for damage or loss of luggage is regulated, and the deadline for bringing actions for personal injury to travelers is extended to three years.
Detailed provisions are made regarding the handling and delivery of goods, and a specific rule is established for courier and small shipment services.
The Council of Ministers has received a report from the Minister of Justice on the Draft Law of the Land Transport Contract, which aims to update the legal framework for the transport of goods and passengers, both by road and rail.

The future regulation, which must now undergo consultation with the transportation sector, the Autonomous Communities, and affected Public Administrations, will put an end to the current anachronistic situation, still governed by the nineteenth-century regulation of the Commercial Code, and will eliminate the legal uncertainty that currently exists in this matter.

Until now, the transport contract was mainly regulated in the codified text of the Commercial Code of 1885, in the Land Transport Regulation Law of 1987 and its Regulation of 1990 (recently modified), while passenger transport by rail was governed by the Regulation of September 8, 1878, leading to a mismatch between reality and regulations.

Similarly, the European Union’s transport policy is not indifferent to these concerns. The European Commission published on September 12, 2001, the «White Paper on European transport policy towards 2010: the time for decisions,» which analyzed the situation of transport in relation to future needs in an «expanded unified internal market.»

The relevant objectives of the White Paper are to strengthen road transport, which remains the most demanded, and to achieve the integration of rail transport, so that usage percentages increase significantly in both mediums by the horizon set for the year 2020.

Following the path of other European countries

Regarding its content, the Draft adapts, in substance, the Spanish land transport contract law to the model represented by international conventions, mainly the Convention on the International Carriage of Goods by Road (CMR) and the Uniform Rules CIM/1999, thus following the path outlined by other European countries.

Based on this, aspects such as the responsibilities of the parties, their limitations, the moving contract, or the prescription of actions are regulated, which generally increase consumer protection. Thus, liability for damage or loss of luggage is specified -previously unregulated- and the deadline for bringing actions for personal injury to travelers is extended to three years.

The Law chooses to uniformly regulate the land transport contract in its two variants, by road and by rail. In this way, the provisions are common to both modes, without prejudice to offering specific solutions for rail freight transport in appropriate places, when convenient.

As a general rule, it is accepted that parties may agree in their contractual relationships terms different from those derived from the Law, provided that this takes place through individually negotiated agreements or through general conditions that are more beneficial to the adherent and are not imperative rules.

Delivery of goods

Everything related to the conditioning and delivery of goods to the carrier and the obligations of loading and stowage is regulated in detail, and the dichotomy between full and fractional loading is eliminated. Instead, a specific rule is established for courier and small shipment services, attributing, in principle, loading and unloading tasks, and in any case, stowage and destowage, to the carrier.

Regarding the carriage of goods, the Law closely follows the CMR and CIM conventions, as well as regarding impediments to transport and delivery, and delivery deadlines. In the latter case, the Law establishes a differentiated solution for road and rail transport.

Since there is no precedent in international conventions, the Law opts for a novel approach in the legal regulation of the obligation to pay the transport price. It highlights the subsidiary payment responsibility that the shipper assumes in cases where the payment of the freight is agreed upon by the consignee. This aims to put an end to certain abuses committed to the detriment of the legitimate interests of the carrier, facilitated by considering the consignee as a third party outside the transport contract.

The regulation devotes special attention to determining the subjects of transport, which has been a source of continuous problems, particularly regarding the problems posed by the intervention of multiple subjects in transport. The aim is to clarify the contractual position of freight forwarders, operators, transport agencies, and other intermediaries in transport, obliging such intermediaries to always contract transport on their own behalf and to assume the carrier’s position.

Likewise, the Draft has introduced the concept of continuous transport to designate the transport contract that is framed in a continuous relationship between the parties, and each shipment or dispatch must be specified. The regulation of the moving contract is also incorporated, as a transport focused on a special object and involving equally special ancillary obligations.

Special passenger protection

One of the main provisions contained in the Law is the special protection of the passenger. As in the case of the carriage of goods, the Law did not aim for an abrupt rupture with the rules on which passenger transport contracting has relied until now. However, international conventions’ rules have also been taken into account here.

It is particularly significant that, for the first time, responsibility for personal injury suffered by passengers is addressed in our commercial framework, previously only dealt with under rules related to road safety and compulsory insurance.

In the passenger transport field, what constitutes hand luggage and baggage is defined to establish the corresponding regime. It also considers the hypothesis of transporting pets, an increasingly common scenario.