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schedule of unpaid invoices or an account statement. In the second paragraph, you need to state in wording
similar to the following: “The purpose of this letter is to give you [your client] notification that all sums due must be paid before the release of the goods detailed above. You are advised that in accordance with the Standard
Trading Conditions of the British International Freight Association clause 8(A) (i), we [your firm] are taking a lien on the above-mentioned shipment(s). You have 21 days’ notice that should the sums due not be paid, then the goods on hold may be sold and the proceeds applied to the outstanding debt. Any legal expenses and interest will be deducted from the proceeds of sale and any remainder remitted to you under clause 8(A) (iii). “We are a member of the British International Freight
Association and all our business is conducted in accordance with the BIFA Standard Trading Conditions (STC) and these terms apply between us [add in here details of notice given to your customer of the application of the terms to the contracts under which the debts claimed was given, such as in a signed credit agreement or accepted quote or quotes referring to the conditions]. “We are exercising this lien contractually on the basis that
you are the owner of these goods or have the authorisation of the owner to contract on their behalf on the basis of the BIFA STC (see clause 3). If you are not the owner or have not been so authorised by the owner, please advise immediately as we shall need to seek instructions from the owner.”
It should be noted that Members have no right to hold goods
under the BIFA STC unless their customer has title to them or has the authority to act on behalf of the owner of the goods as specified in Clause 3 of the BIFA STC. This authority does not have to be expressly given and may be implied or provided for in terms of a head contract.
Clarifying control Members have to take instructions from the party with the right of control over the goods and the identity of that party may not be clear when the lien is exercised. You are entitled to clarify who that party is, but this must be done quickly in order to keep any rising charges to a reasonable sum. Any lien exercised against an owner who is not your client,
nor bound by the STC, will not be as broad ranging as a BIFA lien. It will be a specific lien covering costs relative to the goods covered by one specific shipment and will not be a general lien for all outstanding monies owed to you. Furthermore, your right of sale will only exist if you have given reasonable written notice of the intention to sell and have obtained a court order permitting you to sell. One area that is often overlooked is that as a bailee, a
forwarder should be aware of the insurance aspects of exercising a lien. Particular attention should be paid to the insurance cover provided to the forwarder by the insurer. It is important that the policy covers goods held under a lien against all risks of loss or damage. If this is not the case, the broker should be consulted to arrange suitable cover. Once a lien has been taken out, the party who has exercised it is who will be held responsible for the loss or damage to the goods. Liens are a very difficult area.
Disputes regarding their legality can escalate very quickly and if they do, you are strongly advised to seek immediate legal assistance to ensure your rights are protected and that you are not infringing anyone else’s rights.
BIFAlink
It should be noted that Members have no right to hold goods under the BIFA STC unless their customer has title to them or has the authority to act on behalf of the owner of the goods as specified in Clause 3 of the BIFA STC
June 2020
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NOT RELEASE T RELEASE
DO NOT RELEASE DO NOT RELEASE
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