May 6, 2011
Illinois Appellate Court holds Third-Party logistics operator liable for driver’s negligence
On March 30, 2011, the Illinois Appellate Court issued a ruling upholding a jury's finding that a third-party logistics provider, CH Robinson, was responsible for a driver's negligent operation of a tractor-trailer. This case involved a serious accident: the driver of a tractor trailer failed to stop and avoid a traffic jam, ran over several vehicles, causing serious injuries to one person and the death of two others. The jury awarded plaintiffs $23,775,000. The issue on appeal concerned the liability of CH Robinson. CH Robinson is a third-party logistics provider, that is, it arranges transportation services for its clients, it does not actual provide any of the actual transportation. CH Robinson argued at trial that the driver was an independent contractor and, accordingly, CH Robinson should not be found liable. Both the trial court and appellate court disagreed. The appellate court found there were substantial facts indicating the existence of an agency relationship between the driver and CH Robinson and CH Robinson was properly held vicariously liable for the driver's negligence.
This is significant ruling in the industry and should cause concern to logistic providers and those companies that hire independent contract drivers (like shippers and manufacturers). Historically, these types of companies have been successfully in shielding themselves from liability based on the independent contractor relationship. However, in this recent case, the appellate court found the existence of an agency relationship despite contractual evidence that the parties intended the driver to be an independent contractor. Those in the third-party logistics industry, as well as shippers, manufacturers and their insurers, should be aware of this case and risk, particularly any requirements or governance over the drivers they hire to transport freight.
Sperl v. C.H. Robinson Worldwide, Inc., 2011 Ill. App. LEXIS 307 (Ill. App. 2011) can be found online here