Collision and Non Contact Incidents
Collision is one of the few areas where third party liabilities may be covered by the hull policy. Traditionally, the English hull policy covered 3/4ths of the collision risks and the P&I Clubs the remaining 1/4th. The usual Lloyd’s hull policy does so under the ‘Running Down Clause’ (RDC). Nowadays the Club may exclude collision risks altogether or cover up to 100% of the risk, depending upon the mix of hull and P & I cover for the risk adopted by the ship owner.
Collision cover under the hull policy will normally only encompass a ship owners liability for damage to the opponent vessel and her cargo caused by physical contact between the two vessels. It is usually limited to the insured value of the insured vessel. P&I cover encompasses such liabilities in excess of the hull cover limit, together with a wide range of other risks flowing from the collision incident including damage to cargo carried on the entered vessel, personal injury, pollution and wreck removal. Therefore the Club will almost certainly be involved in the resolution of any serious collision claim and will generally take the lead role in dealing with it whilst liaising closely with the Member and their hull insurers. See Class I Rule 25v.
The claims for damages suffered by the owners of vessels involved in a collision, if not settled amicably, will need to be resolved through litigation. The jurisdiction in which such disputes are dealt with can have an important bearing on the outcome because different jurisdictions apply different laws to the resolution of such claims. Most collisions occur in ports, harbours, anchorages or coastal waters where there is an obvious local jurisdiction but collisions that occur on the high seas require a choice of jurisdiction which can be influenced by the parties to the dispute.
Decisions in respect of jurisdiction taken in the early stages of a case can have an enormous impact on the overall outcome. This is particularly true in serious cases where limitation of liability of one or both of the vessels may be an issue. Laws on the application of rights to limitation vary from country to country. If the Member is considered to be the less blameworthy of the two parties, and is likely to make a net recovery on the balance of claims, the better jurisdiction is one which minimises the Members liability and maximises his recovery without the constraints of limitation. Conversely, where the Member is thought to be the more blameworthy, a jurisdiction which offers the best prospects of defence and the lowest limits of liability is preferable.
However choice of jurisdiction is not simply a matter of picking a forum which suits the Member, irrespective of its connection with the incident. The chances are that, if a particular forum suits the Members interests, it will not suit the interests of the other vessel and voluntary agreement is unlikely. There must be some means of enforcing the jurisdiction of choice by service of proceedings on the concerned vessel or a sister vessel or the owning company, if any of them are in the chosen jurisdiction and there must be sufficient connection with that jurisdiction to sustain proceedings there. Moreover, the question of which side establishes jurisdiction first may be a factor. Quick decisions on choice of jurisdiction may be necessary.
If neither party is able to enforce the jurisdiction of their choice it may be necessary to agree a compromise. For many years England has commonly been accepted as a neutral forum for deciding questions of collision liability. Because of the vast experience of the English Admiralty Court and the system of judicial precedent, litigants can reach an informed view about how the Courts are likely to view liability in a particular set of circumstances. English jurisdiction is therefore regularly agreed for collisions which occur all over the world between vessels of various nationalities.
It is extremely important that the Club is consulted at the earliest possible stage if a collision occurs so that the issue of jurisdiction can be resolved as soon a possible.
Early consultation is also vital in order that decisions can be taken concerning the security that may be required for the Members own claim or the need to provide security on behalf of the Member to ensure that one of his vessels is not detained. In some cases, the opponent vessel may be the only significant asset against which a claim can be made and it may therefore be necessary to obtain financial security in case that vessel is subsequently sold or otherwise lost. In the event that such security cannot be obtained immediately in a suitable jurisdiction, it may be necessary to give consideration to lien insurance as a temporary measure. [See the section of this guide on Guarantees.]
Investigation and Evidence
To make often complex decisions about issues such as jurisdiction, it is important to collect certain basic information rapidly in order that a view can be taken on the likely apportionment of liability and the amount of each vessels claim.
The following surveys will therefore normally be arranged by the Club when it has been notified of the incident:
- a survey of the entered ship in order to determine the extent of the damage sustained and repairs required. This survey is usually arranged for and on behalf of the owners and their hull underwriters and will be for their account. It is customary to invite the owners of the other vessel to attend and conduct a joint survey in order to avoid later disputes about the extent of the damage;
- a without prejudice survey of the damage to the other ship. Again, this is normally conducted jointly with the opponents surveyor. It is usually arranged on behalf of the owners and their collision liability underwriters and the costs will be apportioned between the Club and the hull underwriters in the same proportion as their respective cover for collision liabilities;
- in most cases, the Members Classification Society will also appoint a surveyor to inspect the vessel;
- in serious collision cases, and particularly in the event that the circumstances of the case are likely to be in dispute, a speed and angle of blow survey will be arranged. This will assess, from the extent and configuration of the physical damage to both ships, their relative speeds and the angle between them at the time of the collision. Such evidence, being based on fact, can frequently be used to resolve any inconsistencies between the various reports on the circumstances of the case. The cost of this report is usually apportioned between the hull underwriters and the Club since it concerns both the prosecution of the Members claim and the defence of the opponent vessels claim.
The Club will normally send their correspondent/surveyor (and possibly a lawyer in the more serious cases) to investigate the casualty but there is much that the ships crew can do to facilitate this process.
Brief notes to form the basis of factual reports should be prepared by the Master, duty officers, helmsman and any other material witnesses as soon as possible after the incident and before memories begin to fade. However, it should be borne in mind that written evidence may be disclosable to the other side in the event of litigation.[See the section of this guide on Documentary Evidence.]
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