Experts expound practical aspects of to underwriters and average adjusters
collision claims
A raft of consequences faces shipowners, insurers and adjusters in dealing with the aftermath of ship collisions, speakers at the latest joint seminar in London of the Association of Average Adjusters and the International Underwriting Association made clear.
Casualties harbour potential cost implications for salvage, wreck removal, cargo damage, damage to ship, oil pollution, crew and passenger personal injury, limitation of liability, damage to fixed and floating objects, and claims from port authorities.
Alistair Johnston, partner at CJC Law; Chris Zavos, partner with Kennedys; and Michiel Starmans, director of the legal department at Amsterdam- based Spliethoff Group, set out in their talk on 24th March 2022, what they called Practical aspects of collision claims. Mr Starmans is current chairman of the Association of Average Adjusters.
The three speakers outlined how amid the complex interplay of factors early assessments can be made as to which ship might be to blame, the role of the Collision Regulations, and where parties might commence court proceedings if needed.
They ranged in their presentation over principles of collisions and liability, apportionment, forum shopping, limitation and security, insurance, quantum, and single and cross liability.
To illustrate the multiple factors that might be at play, Mr Johnston posed an imagined scenario of a laden handymax bulk carrier on voyage from Chile to India, which on its way out of inner anchorage at Singapore proceeding south westerly, collides in port limits during dense fog with a south easterly voyaging container vessel bound for Greece.
In that supposed instance, carriage contracts of relevance were that the Greek-owned bulk carrier was on voyage charter to a Portuguese entity, and the bill of lading was issued to shippers in Chile. The German-owned containership was on time charter to a US entity, and the charter had a vessel-sharing agreement with a Greek company and a Turkish company.
The collision bulkhead of the handymax is breached and water damages the cargo in number one hold. Residual bunker oil in the empty breached double-bottom heavy oil fuel tank causes a small oil slick, with the risk of pollution. On the boxship, extensive damage is caused amidships with containers underdeck being smashed; some containers on the forepart topple, and one crushes and kills a seafarer.
To start to deal with such casualties, the need was to go back to basic principles and the law of tort: that every ship owes a duty of care to all other users of the seas, said Mr Johnston. The objective standard of care was “good seamanship” (the ordinary skill and care of each
seafarer according to their rank) plus observation of Navigation Rules. Should those two branches of the standard of care conflict, the first prevails. There is a burden of proof on the claimant to prove loss plus negligence or want of good seamanship which led to loss (causation).
Mr Johnston said that for quantum (the amount of damages awarded to a successful party in a claim) it was critical to assemble evidence as soon as possible: “Getting evidence together, the key pieces of information, makes it so much easier for everyone involved.”
What we needed to look at straight away is who is going to be the paying party and who the receiving party, said Mr Johnston. “We are looking at how blameworthy were the parties.” The Collision Convention 1910, incorporated into English Law by the Maritime Conventions Act 1911 (now section 187 of the Merchant Shipping Act 1995) lays the groundwork for apportionment of liability for damage. It says that the liability to make good the damage or loss shall be in proportion to the degree in which each ship was in fault.
Introducing the principle of liability in proportion to blame, the owner of a ship involved in a collision is liable to make good the damage suffered in proportion to that ship’s fault. (Distinct from that, liability for death and personal injury is joint and several.)
The Report • June 2022 • Issue 100 | 84
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