The 12 International Group P&I Clubs recently announced amendments to their respective rules to deal with liabilities arising from undeclared or mis-declared dangerous goods. The changes underline the need for insured ship owners and operators to maintain enforceable rights of recourse against shippers in accordance with the Hague/Hague-Visby Rules.
The Hague-Visby Rules have been around for a long time and they contain a provision that, in the absence of proper notice to the carrier of the nature of the goods, the shipper of inflammable, explosive or dangerous goods “shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment.” Under the revised Club rules (effective from 20 February 2026), an insured ship owner or operator must not expressly waive or fail to incorporate terms providing for such liability into their contractual arrangements for carriage of goods. Failure to do this may enable the Club to decline to cover the member for liability arising to cargo/ cargo insurers for goods lost or damages arising as a result of the shipment of such goods.
In a sense, this is not really a change at all. It has long been a requirement that insured members should not contract on terms that are less favourable than the Hague or Hague-Visby Rules or, to put it another way, should not voluntarily increase their liability to others. The amendments to the Rules are probably a response to the increasing number of claims arising due to the carriage of dangerous goods on ships. There are many recent examples of large losses from fires and explosions on containerships where improper declaration of hazardous cargo has been held to be the or a principal cause.
Of course, having a right of recourse does not mean that it is possible for the Club to make a recovery from a third party shipper. It can be challenging to find evidence of the causative impact of dangerous goods on a burnt out ship. Even assuming there is such evidence, the right of recourse is also only as good as the financial standing of the shipper themselves or that of their liability insurer (if they have one). A right of recourse against a small manufacturer of chemicals in China is not likely to be worth much if one is facing claims of millions of dollars.
The point however is not the likelihood of making a recovery but to ensure that rights of recourse are not inadvertently given away by the ship owner or operator thus prejudicing their rights to be indemnified by the Club for any liabilities that arise. We regularly assist clients to review and amend their contractual terms and other standard documentation. Maintaining P&I cover is always an important consideration. Any changes in Club rules may require contractual documents to be updated to ensure there are no unexpected issues for the insured ship owner or operator when they are faced with potential claims and need to call upon their insurers.
James Ingham
Managing Associate
