Written by Peter CarterMay 28, 2013
As leisure cruising becomes a major segment of the Australian travel market with 53 cruise ships having a daily passenger capacity of 54,000 souls plying Australian waters and visiting 31 ports this year, a timely reminder of the legal consequences of an accident at sea has occurred with a shipboard fire on the giant Grandeur of the Seas.
Grandeur was today set ablaze at sea after what passengers described as “big explosions” and the captain declared a ‘mayday’ emergency. The seven-night cruise was forced to end early and the ship returning to the US port of Baltimore. All 2,224 passengers were forced to disembark in an unscheduled visit to Freeport, Bahamas and are to be flown back to the US.
Grandeur is a sister ship of the largest cruise ship to base itself in Australia – Royal Caribbean’s Voyager of the Seas – which sails from Sydney during the southern summer. Both ships are registered in Bermuda, the “flag state” of the vessels.
The legal regime that applies to cruise ships is complex. On some occasions, the law applicable to events occurring on the vessel, including personal injury, is the law of the flag state as the vessel is deemed to be a part of the state represented by its flag. On other occasions, the law of the place where the injury occurs is the applicable law.
The Convention on Limitation of Liability for Maritime Claims (London) 1976 and 1996 protocol allow liability limits for passenger death and injury claims. They have been incorporated into the law of Australia by the Limitation of Liability for Maritime Claims Act 1989.
The convention does not establish a cause of action, rather it simply limits a “seagoing” vessel’s liability for most types of losses in tort as a result of negligence and contract and in particular:-
- injury occurring on board or in direct connection with the operation of the ship
- loss resulting from delay in the carriage by sea of cargo, passengers or their luggage
It applies if the ship is registered in a nation which is a party to the convention or located in the waters of such a nation or on the high seas on a voyage between two such nations. The convention establishes apply a maximum liability for multiple injuries. Under the 1976 Convention the liability limit for the vessel is:
- 46,660 SDRs x passenger capacity (up to a maximum of 25 million SDRs)
At 46,666 SDRs per passenger, the upper limit per vessel of 25 million SDRs is topped out with a passenger capacity of 536. At 3,138 passengers Radiance’s per passenger cover under the LLMCA regime is 7,967 SDRs or AUD$11,642.
The 1996 protocol came into force in May 2004. The protocol increases per passenger allowance for calculation of the vessel’s liability limit, to 175,000 SDRs and abolishes the per vessel upper limit. Accordingly, Radiance’s maximum liability under the 1996 protocol is:-
- 175,000 SDRs x 3138 = 550 million SDRs (AUD$804 million)
A shipowner liable is not entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with the knowledge that such loss would probably result.
The Convention Relating to the International Carriage of Passengers and Their Luggage by Sea (Athens) 1974, which is not ratified by Australia or the USA, creates a per passenger personal injury claim limit, of 46,666 SDRs. Contributory negligence rules apply but legal costs and interest are in addition. UK (incl Bermuda), Bahamas, Greece, China and Russia are notable ratifying nations.
Fault or neglect is presumed in the case of shipwreck, capsize, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship. It does not apply to injuries occurring in “a marine terminal, station or on a quay”.
A new Athens Convention of 2002 is set to enter into force on 23 April 2014, after the last of the required 10 ratifications were reached in April 2013 which raises the limit at which carriers can set their liability to 250,000 SDRs per passenger.
The 10 ratifying states are Albania, Belgium, Belize, Denmark, Latvia, Netherlands, Palau, Saint Kitts and Nevis, Serbia and the Syrian Arab Republic. It has been also ratified by the European Union.
The carrier has a complete defence if the incident causing injury is an act of war, natural disaster, insurrection or “was wholly caused by any act or omission done with the intent to cause the incident by a third party” eg terrorism.
Cruise ship injury claims are therefore legally complex in terms of deciding the applicable law. Other complexities relating to forum and damages must also be carefully considered to ensure the proper recovery of fair compensation.
The rights of Australian Grandeur passengers will be subject to their cruise contract but there is a good chance Australian law can be made to apply.