The IMO stated that the diplomatic conference that met in London adopted a protocol to the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974. The Protocol would, if ratified by at least 10 States, impose a compulsory insurance requirement on passenger ship operators
and raise liability limits to 250,000 Special Drawing Rights about $325,000.
The amendments to the Convention are contained in a Protocol to the Athens Convention.
IMO Secretary General William A. O'Neil said that the 2002 Protocol, when it comes into force, would provide a much-needed update to the 1974 Convention and he urged Governments to ratify the Protocol as soon as possible.
He said, "For some time now it has been recognized that the limits of liability in the 1974 Convention are no longer adequate to meet the needs of the international community. The 1990 Protocol, in the eyes of many States, suffered from the same defect. Therefore it never entered into force. It goes without saying, however, that compensation, in adequate measure, must be provided for loss of human life and physical injury for all passengers travelling by sea."
The new instrument will provide for adequate compensation for death and personal injury claims and claims for loss of or damage to luggage and vehicles.
"As with all IMO conventions, the aim of the Organization has been to create an internationally accepted regime so that the shipping industry does not become subject to a variety of individual national schemes. I am hopeful that with these new elements, this Protocol will be widely accepted and quickly brought into force," O'Neil added.
The Conference was attended by more than 70 States, many of which held differing views on what constitutes adequate compensation. Some delegations had proposed even higher limits. However, the Conference was able to achieve a compromise and a consensus on the final package of measures adopted, balancing the concerns of commercial insurance with
the need to ensure adequate protection.
The slow rate of acceptance of the 1974 Convention (it has been ratified by 28 States) has been largely attributed to the low level of the limits of liability set in the original Convention and in its 1990 Protocol (which raised the limits but never entered into force).
As well as raising limits of liability for passenger claims, the Protocol also introduces other mechanisms to assist passengers in obtaining compensation, based on well-accepted principles applied in existing liability and compensation regimes dealing with environmental pollution. These include replacing the fault-based liability system with a strict liability system for shipping related incidents, backed by the requirement that the carrier take out compulsory insurance to cover these potential claims.
The limits contained in the Protocol set a maximum limit, empowering - but not obliging - national courts to compensate for death, injury or damage up to these limits.
The Protocol also includes an "opt-out" clause, enabling State Parties to retain or introduce higher limits of liability (or unlimited liability) in the case of carriers who are subject to the jurisdiction of their courts.