Recent large losses due to explosions and/or fires aboard containerships caused by the improper declaration of dangerous goods has resulted in the 12 International Group P&I Clubs recently implementing rule changes. Effective 20 February 2026 all mutual members are now required to actively maintain their rights to seek recovery from shippers or charterers if a loss stems from dangerous goods not properly declared. Shipowners and operators cannot waive, limit or fail to incorporate rights of recourse (found in the Hague/Hague-Visby Rules, Article IV, Rule 6) into bills of lading, charterparties, etc. If a mutual member waives these rights, the IG P&I Club may exercise its discretion to deny cover for any resulting liabilities.
Article IV, Rule 6 of the Hague-Visby Rules provides that an ocean carrier is entitled to recover from a shipper any loss, damage or liability arising from the carriage of dangerous goods if the shipper fails to provide proper notice that the goods are dangerous. This rule imposes a form of strict liability on the shipper for the consequences of mis-declared dangerous cargo, providing the carrier with a right of recourse regardless of fault.
Goods classified as “dangerous” include any that are corrosive, explosive, flammable, or otherwise hazardous to the ship, crew or other cargo. The shipper must provide accurate information about the nature of the cargo. A failure to do so triggers the carrier’s right of recourse for any damages. While the rule automatically applies to bills of lading, it can also be incorporated into other contracts through a Clause Paramount. This ensures that a shipowner’s or operator’s rights are preserved in charterparties, service contracts, shippers’ terms and conditions or other agreements. Members should not agree to contractual terms that expressly waive these recourse rights.
Possessing a right of recourse does not automatically mean that it is possible for the Group Club to make a successful recovery against a third-party shipper. It is often a challenge to locate the cause and origin of a fire and find evidence of the causative impact of the dangerous goods on a burned-up ship. Even assuming there is such evidence, a right of recourse is only as good as the financial standing of the liable shipper or its liability insurer, if one exists.
It has long been a requirement that members should not contract on terms less favorable than the Hague/Hague-Visby Rules. Group Clubs require Members to preserve these rights of recourse in order to maintain a level playing field and ensure the recoverability of losses caused by dangerous goods. In most maritime jurisdictions, a carrier’s right of recourse under Article IV, Rule 6 is enforceable as a matter of law. Shipowners cannot contract away their rights to recover for losses from negligent shippers of dangerous cargo as it would undermine the mutual risk-sharing foundation of P&I insurance. On a broader note, Clubs seek to promote overall safety, including for mariners, property and the environment.
We recommend that members review and ensure that their contracts of carriage and charterparties do not restrict their rights of recourse. Members with questions are invited to contact us via NewJersey.ukclub@thomasmiller.com.