Pursuant to Mexican law, carriers are obliged to care and preserve the cargo; pay for the damage sustained by the consignment, and in general; are liable to the shipper and/or consignee for the total amount of damages caused in the event of breach of contract.
Regardless of the above, in accordance with the Federal Mexican Road Bridges and Transportation Law of 1993 (“LCPAF” by its Spanish acronym), carriers could avoid their liability in a handful of cases in which there are extremely restrictive limits based on the weight of the cargo (c.USD5.00 per ton).
Given the extremely low limits set-out by the LCPAF, insurers, recovery agencies and even lawyers, often do not bother to pursue recovery actions against local carriers unless the cargo weight is significant.
However, because of the need of insurance and reinsurance companies to improve their results, there has been an increase in recovery actions by way of subrogation where there may be a possibility to breach the limits established under the LCPAF.
The analysis must be done on a case-by-case basis but, the unconstitutionality of the limits, gross negligence and/or lack of registration before the Ministry of Transport, are good arguments that can be used to prevent carriers from limiting their liability under such legislation.
There is a long way to go regarding this matter in local courts -especially considering the strong lobbying of the transportation industry- however, the future seems promising since there are already a couple of paths to achieve what it seems to be a more equitable and healthier liability scheme for carriers in Mexico.
