It is often said that a claimant, in any dispute, has a duty in law to mitigate (avoid or reduce) loss and thus the term the “Duty” to Mitigate. Should the claim recovery matter become litigated, the courts look at what steps the claimants have taken in mitigation when assessing damages. If a claimant has failed to take reasonable steps to mitigate loss, then its recovery of damages will be impacted by that failure. 

A claimant is required to act level-headedly when mitigating loss. The question of reasonableness is fact specific and will depend upon the circumstances of the case at hand. For example, the steps taken by an insured were reasonable and/ or necessary. The burden of proving that the claimant failed to take all reasonable steps to mitigate rests with the defendant. That said, there is merit in keeping a record of all actions taken by way of mitigation and the reasons for taking those steps, as this may prove helpful if the issue of reasonableness is raised at a later date and time.

It is not unusual for insurers to require the insured to prove that the circumstances that have arisen ‘would’ or ‘might’ give rise to a claim under the policy where a third-party claim is to be made, and in those circumstances, there are often a series of requirements for the insured to meet. We assist in mitigating losses by keeping all concerned aware of the situation and aiding in reducing losses by way of information /ways /methods and or professional help/ cargo salvaging. 

 It makes sense to advise insurers of the problem, notify if necessary and then keep them appraised of all actions taken by mitigation. It is, of course, also in the insurers’ interests for mitigation to occur early. A well-executed mitigation strategy can save insurers both time and money.

A notice of loss is a notification made by the consignee to the carrier, stating that goods were damaged or missing upon receipt of the shipment and/or whilst the cargo was in his or her custody.

When a notice of loss is given within the correct time, it is presumed that the damage occurred while the carrier had custody of the goods and that he is responsible for the damage.

How is a notice of loss made?

A notice of loss should be made in writing. In the case of apparent loss or damage, notice must be given immediately upon the consignee’s delivery of the goods. In road transport, this is accomplished when the consignee makes an annotation on the consignment note.

This annotation must also be visible in the carrier’s copy. After the extent and nature of the damage have become clear, a separate, written notice of loss can be made in a letter format.

In cases of non-apparent loss or damage, written notice must be given to the carrier within specific and very short time limits. The length of these time limits varies depending on the mode of transport and can be found in our form for notice of loss.

A notice of loss should include information about transportation details and the damage. These are, for example, the transport route, the date of arrival, and the number of consignment notes or similar. In addition, information about the damaged goods, the amount and type of damage should be included. Finally, the notice of loss is dated, signed, and sent to the carrier.

The effect of a neglected notice of loss varies depending on the mode of transport. In sea transports, if the Consignee fails to give notice within the set periods, the Consignee shall have the burden of proof that the goods were lost or damaged while they were in the carrier’s custody.

The presumption is that the goods were delivered to the Consignee in good condition and the liability for the damage no longer lies with the carrier.

To overturn this presumption, you must be able to show that the damage occurred during transportation. Unfortunately, proving this is often difficult or even impossible. In other modes of transport, this omission results in a loss of the right to claim compensation from the carrier.

Consignees must be informed in writing to take steps to safeguard and protect their rights of recovery against all parties responsible and hold them accountable for the loss incurred. The Consignee must not delay giving it in writing to carriers/transporters of goods received in damaged condition. Without providing such notice/s of losses may weaken the case of recovery for the Consignee. Putting remarks on carriers’ receipts could be considered steps towards protecting rights and recovery of claims.

Submission of claim recovery should be made promptly and without delay. The Consignee should know the relevant and competent authority to submit the claim documentation. Acknowledgments of documents submitted by the Consignee are necessary proof of claim submission.

Claim recovery is usually a long-drawn process and often requires timely follow-ups by the Consignee. The follow-ups should be in writing.