Court ruling allows CP Rail to limit liability in transport of dangerous goods

MONTREAL - Canadian Pacific Railway is welcoming a recent court ruling allowing it to strictly limit its liability when transporting toxic goods by rail.

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The Federal Court of Appeal ruled in December that CP was justified in transferring a significant amount of the liability in lawsuits triggered by train derailments to shipping companies from itself.

Shipping companies had complained to the Canadian Transportation Agency that CP (TSX:CP) was attempting to avoid its legal obligations by limiting its liability through a provision in a rail tariff, known as Item 54.

The agency ruled in the shippers' favour in a 2013 decision but was overturned on appeal in December.

CP's tariff states it cannot be held liable for any claims, including environmental damage or death caused by hazardous, toxic inhalants transported on its railway network, unless the railroad is found to be solely negligent or guilty of wilful misconduct.

Lawyers involved in the case say the ruling applies only to toxic inhalants such as liquefied or compressed gas but could also be interpreted more broadly to include other goods such as crude oil.



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