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Cruise lines use law and contracts to limit liability

An Italian consumer and environmental group, Codacons, has announced that it is preparing a class action lawsuit and that more than 70 passengers who had been on board the ship that ran aground on Friday off the Tuscany coast have signed on as plaintiffs. Other suits are sure to come.Anyone trying to sue Costa Concodia's corporate parent, Carnival Cruise Lines, though, will find that the company is stoutly protected by international law and by a carefully worded contract that passengers accept when they buy their tickets.For its part, the company is heaping blame on the ship's captain, Francesco Schettino, calling the accident 'human error' and contending that the captain diverted the ship from its authorised route. Such forceful criticism of the captain may be intended to help the company avoid liability under international agreements like the Convention on Limitation of Liability for Maritime Claims. The convention is referred to on the website of the International Maritime Organization as 'a virtually unbreakable system of limiting liability' for ship owners after accidents.That limitation on liability can be set aside in cases of egregious acts by the vessel's owner if, in the language of the convention, 'it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such a loss, or recklessly and with knowledge that such loss would probably result'.But Vincent Foley, an admiralty lawyer in New York, said the egregious acts must be the owner's. If the captain disregarded his duties, the company could argue that it was not responsible for his behaviour. Whether Schettino's actions 'can be imputed to the owner to break limitation is, I think, a key issue', Mr Foley said. To Jack Hickey, a maritime lawyer in Miami who is working with an Italian lawyer to represent Costa Concordia passengers, the cruise line's responsibility is obvious. Referring to the captain, Mr Hickey said that the company had 'nobody with more authority or responsibility than him' on the ship. Besides, he noted, in an age when ships are in constantcommunication with their owners, the company should not be able to argue that it had no idea what was going on. The issues in the case could be shaped by the highly restrictive terms of the contract that every passenger gets with his or her ticket, said Gerald McGill, an admiralty lawyer in Pensacola, Florida.Cruise contracts are notoriously restrictive regarding the rights of passengers, and Costa's 6,400-word contract is no exception. The contract sharply limits the kinds of lawsuits that can be brought, where those suits can be brought and how much the company can be made to pay. For cruises that do not involve a US port, the contract states, any litigation must be brought in Genoa, Italy, and be governed by Italian law. But when it comes to liability, the contract says that the company can take advantage of any limits set by international treaties or by US laws, which are very generous to owners of vessels. If there is a conflict among the patchwork of laws and treaties regarding liability, it says, 'the Carrier shall be entitled to invoke whichever provisions provide the greatest limitations and immunities to the Carrier'. 'That's called 'the terms are whatever we want them to be' clause,' Mr Hickey said. 'It's a contract created by lawyers under this fantasy that the everyday passenger will understand what that means.'

Date:January 24, 2012                                                                                                Source : NYT

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