Collisions between ships inevitably lead to claims, and frequently to litigation. The major concern is the establishment of what exactly occurred – what the lawyers call “the facts” – and the application to those facts of well- established principles of law. The cause of action pleaded in every collision case is that of negligence. This is defined as the breach of a recognised duty of care owed to a person who may reasonably be foreseen to suffer loss as a direct result of that breach.
To discharge the duty of care the negligent party needs to demonstrate that it complied with the required standard of care. A collision at sea may be caused by negligence of the master or a crew member in the way the ship is navigated or managed.
However, it may also be caused by a negligent act or an omission by the shipowner or the management company in relation to the management and upkeep of the ship. The applicable standard of care for the navigation of the ship is that of “good seamanship”. The standard of care for the shipowner, manager and/or operator of the ship includes compliance with international conventions, such as MARPOL and SOLAS as well as those concerning the manning and training requirements for the ship and the management codes.
Only breaches of the duty of care which are causative of the damage make a party liable for the collision.
The principal procedural issue in every case is the choice of jurisdiction for the collision litigation. In most cases this issue is resolved by an agreement between the parties, or, more frequently, between their insurers, since the financial consequences of collisions are invariably covered in large measure by the insurance on the ships involved.
Insurance Interests Concerned
In arriving at an understanding of the practical working of collision litigation it is important to understand the involvement of the insurance interests concerned. These may be summarised as follows:
(a) Hull underwriters
(i) repairs to damage suffered by the insured ship;
(ii) voyage and port expenses to port where repairs can be effected;
(iii) salvage and General Average – insured ship’s proportion;
(iv) Running Down Clause (“RDC”) – three- quarters of third-party liability for damage to the other colliding ship and cargo.
(b) P&I Club
(i) one- quarter RDC, if not covered by the hull insurer;
(ii) death and/or personal injury claims;
(iii) pollution;
(iv) liability (if any) to cargo on entered vessel;
(v) other entered risks.
(c) Defence (FD&D) Club
Proportion of legal fees attributable to recovery of owner’s loss of earnings claim and other uninsured items of claim.
(d) Shipowner
Loss of earnings due to detention for collision damage repairs.
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