Liability Limits News

The Legal Committee of the IMO will meet for its 111th session at IMO Headquarters in London from April 22 to 26, 2024. The Committee deals with any legal matters within the scope of the IMO, including issues relating to liability and compensation, fair treatment of seafarers and the registration of ships. This meeting will discuss:1. Abandonment of seafarersSeafarer abandonment happens when shipowners fail to fulfil obligations to seafarers related to timely repatriation, payment of outstanding wages or salary…

Balance sheets of clubs operating in the marine protection and indemnity (P&I) sector are generally strong, bolstered by several years of positive earnings but underwriting discipline will be tested over the February 2018 renewal period, according to a new report by A.M. Best. The Best’s Special Report, “Balance Sheets of P&I Clubs Strong But Pricing Under Pressure Amid Strong Competition” states that ahead of the Feb. 20, 2018 renewal deadline, pressure from members and brokers to reduce rates is growing. Competition is intense, exacerbated by a growing fixed-premium market. Catherine Thomas, senior director, analytics, said: “Historically, clubs were able to use investment income, not only to enhance free reserves, but also to offset underwriting losses.

Unpredictable markets and continuing marine claims volatility means the international shipping industry is facing a particularly challenging time, says Pratap Shirke, chairman of North P&I club. His comments are published today (16 July 2015) in the 170 million GT, ‘A’ rated club’s 2015 Management Report. ‘Shipowners continue to operate in unpredictable shipping markets and the economic climate shows little signs of improvement,’ he says. He also notes that risk levels in the industry continue to be volatile, with North’s members experiencing an unusually high level of larger claims during the 2014/15 policy year. ‘The significant number of large claims in excess of US$1 million was unexpected…

Unpredictable markets and continuing marine claims volatility means the international shipping industry is facing a particularly challenging time, says Pratap Shirke, chairman of North P&I club. His comments are published today (16 July 2015) in the 170 million GT, ‘A’ rated club’s 2015 Management Report. ‘Shipowners continue to operate in unpredictable shipping markets and the economic climate shows little signs of improvement,’ he says. He also notes that risk levels in the industry continue to be volatile, with North’s members experiencing an unusually high level of larger claims during the 2014/15 policy year. ‘The significant number of large claims in excess of US$1 million was unexpected…

Fidelis Group Holdings, LLC Launches Master Port Risk Program For The Maritime Industry. Fidelis Group Holdings, LLC (FGH) with its subsidiary company Continental Underwriters, Ltd. (CUL), a National Marine Insurance coverage and service leader, announced today the launch of its new Master Port Risk Program. H. Elder Brown, Jr., President and Chief Executive Officer of FGH commented, "We are consistently pursuing ways of providing insurance solutions to help streamline our client's daily operations. The new Master Port Risk Program is designed to provide Hull and Liability coverage for qualified vessels that are laid up and out of commission for an extended period of time.

To help yacht owners navigate increasingly risky waters, XL Group is adding a Kidnap, Ransom & Extortion (KRE) Crisis endorsement to ShipShape, and ShipShape Plus, its recreational marine insurance coverages. "Crisis events like kidnapping, disappearance and hijack are increasingly real threats, especially on open seas," explained Denise Balan, Country Manager of XL's US Crisis Management business which developed the KRE endorsement. According to Rick Salway, Vice President of XL Group's Recreational Marine business, "Our ShipShape insurance pulls together the most relevant, comprehensive insurance coverages for yacht owners and other recreational watercrafts under one policy.

Moving 30 barges at once takes the sure hand of a tugboat pilot who knows how to maneuver a flotilla through the twists and turns of the Mississippi River. Lashed together, three across and 10 long, the barges cover more than twice the surface area of a modern aircraft carrier. Most would agree that the best river pilots are artisans, deeply skilled in methods to meet the challenges of that particular job. Equally skilled, however, are the tugboat captains in a crowded ocean harbor…

An essential part of spring cleaning is sorting through what you have, deciding what needs to be kept, and throwing out what can safely be eliminated. The tidy end result lets you move forward in the best shape possible. An annual “spring cleaning” of insurance coverage is equally valuable for a business operation. Whether the economy is booming and cash flow is substantial, or times are tight and shaving costs is essential, a business should step back at least once a year, take a look at its assets, and evaluate its current risk management strategy. The goal is to make sure the company is maximizing its benefit from premium dollars.

Secretary of the Interior Ken Salazar directed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) to issue new suspensions of deepwater drilling – set to last until at least November 30, 2010 -- on the Outer Continental Shelf (OCS), claiming a pause is needed to ensure that oil and gas companies implement adequate safety measures to reduce the risks associated with deepwater drilling operations and are prepared for blowouts and oil spills. “More than eighty days into the BP oil spill…

The management ballast water discharges began with the enactment of the Nonindigenous Aquatic Nuisance Prevention and Control Act of 1990 (NANPCA) as an effort to prevent the introduction of additional invasive species into the Great Lakes. Since then, NANPCA was amended by the National Invasive Species Act of 1996 and the issue has progressed over the intervening years to a much larger campaign to regulate all vessel discharges into U.S. waters. Ballast water management has been the subject of litigation, regulation, and legislation at the state and federal level.

Senator Lautenberg (D-NJ) introduced a bill (S. 2700) to amend the Oil Pollution Act of 1990 to double liability limits for single-hull tankers and tank barges for 2009, and for other purposes. This bill, as introduced, is worded in a strange manner and may not have the intended effect. (HK Law).

On December 18, the Senate Committee on Commerce, Science, and Transportation will conduct a hearing on Oil Spills from Non-Tank Vessels. Among the issues to be addressed are the adequacy and enforcement of vessel response plans for non-tank vessels and the adequacy of non-tank vessel liability limits. (HK Law)

On December 18, the Subcommittee on Oceans, Atmosphere, Fisheries & Coast Guard of the Senate Committee on Commerce, Science, and Transportation conducted a hearing on Oil Spills from Non-Tank Vessels. Committee Chairman Daniel Inouye (D-HI) noted the success of OPA 90 in reducing spills from tank vessels, but noted that the incidence of spills from non-tank vessels have not declined as much, asking whether standards for these vessels should be strengthened. Admiral Thad Allen, Commandant, US Coast Guard, discussed efforts to make fuel tanks on vessels less susceptible to damage and proposed increasing the limit of liability for damages caused by oil spills from non-tank vessels. Ms.

As recent events have shown, no single judicial action is likely to have as much impact on the maritime community in the next decade as the Supreme Court?s U.S. v. Locke (Intertanko) decision. Last year, the Supreme Court ruled unanimously that a state could not impose tanker safety standards that exceeded the federal standards set by the Oil Pollution Act of 1990 (OPA 90). At the time, it was widely hailed as a major victory for tanker owners. The decision appeared to limit states? ability to regulate shipping; but on second glance, something far more dangerous to the maritime community was contained within. The Supreme Court outlined a road map for how any state could pass legislation and implement regulations with far reaching implications. The gist of the legal loophole is this. U.S.

On November 9, 2004, The Supreme Court of the United States decided Norfolk Southern Railway Co. v. James N. Kirby, Pty Ltd., docket No. 02¬1028 (Nov. 9, 2004). The Court reversed the Eleventh Circuit and held that Himalaya Clauses in both an NVOCC's bill of lading, and in a VOCC's bill of lading extended the bill of lading COGSA package limitation or other protection to the participating land carrier, the Norfolk Southern Railway Co., which was hired by an affiliate of the VOCC. The opinion also upholds the limitations in the VOCC's bill of lading even though there was no strict privy of contract between Kirby, the cargo interest, and the VOCC. The case involved a shipment of cargo from Australia to Athens, Alabama by way of Huntsville, Alabama.

Following is a more expanded analysis of the recent U.S. Supreme Court decision than the short summary provided yesterday. This analysis was prepared by Chester Hooper or Holland & Knight. On November 9, 2004, The Supreme Court of the United States decided Norfolk Southern Railway Co. v. James N. Kirby, Pty Ltd., docket No. 02­1028 (Nov. 9, 2004). The Court reversed the Eleventh Circuit and held that Himalaya Clauses in both an NVOCC's bill of lading, and in a VOCC's bill of lading extended the bill of lading COGSA package limitation or other protection to the participating land carrier, the Norfolk Southern Railway Co., which was hired by an affiliate of the VOCC.

Senator Lautenberg (D-NJ) introduced a bill (S. 3035) to amend the Oil Pollution Act of 1990 to prevent oil spills and increase liability limits, and for other purposes. This is a companion to the bill (H.R. 5431) introduced the day before by Representative Pallone (D-NJ). Both bills automatically died when the 108th Congress ended last week. (HK Law).

The U.S. Coast Guard released its Report on Implementation of the Oil Pollution Act of 1990. Among other things, the report notes that, while the Oil Spill Liability Trust Fund (which now stands at $842 million) is fiscally sound at the moment, it may be depleted in 2009 if current trends continue. A combination of reinstituting the fee on imported oil and indexing liability limits to inflation is a means of resolving this potential problem. The report also notes that the domestic tank barge industry will be impacted if the phase-out date for single hull tank vessels is accelerated. The report was prepared at the direction of Congress. (HK Law).

INTERTANKO and ICS restate their full support for the measures that have evolved from the Working Group of the IOPC Fund Assembly. Over the past five years the Assembly and its Working Group have been responsible for the successful development and bringing into effect of increased compensation levels for the victims of oil spills through the adoption of higher liability limits for owners and oil receivers, the introduction of a supplementary fund for those states that wish to avail themselves of further levels of compensation, and an increase in compensation funded by shipowners in those states. Industry also fully supports the extension of STOPIA to all CLC 1992 States which will be of particular benefit to developing States.

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.

New developments in wreck removal and the ever-increasing size of ships provided the focus for the International Salvage Union’s London conference on March 7. Looking at the prospects for a new Wreck Removal Convention, the Institute of Maritime Law’s Richard Shaw warned that adoption of the draft at the May diplomatic conference in Nairobi was not a foregone conclusion. Richard Shaw said that the new Convention, if adopted, would provide comfort to harbormasters and shore authorities asked to provide refuge for marine casualties. He added that the convention provides freedom to contract. A Coastal State may not impose a particular salvor on an owner.