Understanding Legal Liability in a Subchapter M Environment

By Mark Hebert April 19, 2017

There is more to SubM than just attention to safety. Protect yourself accordingly.

In today’s environment, safety management systems for brown water marine operators are standard industry practice, whether they come in the form of the American Waterways Operators (AWO) Responsible Carrier Program (RCP) or the Tanker Safety Management Assessment (TSMA) framework developed by the Oil Companies International Marine Forum (OCIMF) for liquid carriers. However, with the full-fledged implementation of Subchapter M on the horizon, individual company-established Towing Safety Management Systems (TSMS) are expected to be the norm for the brown water industry.

Subchapter M was enacted for the safety and protection of seamen on vessels in navigation. The entire focus of Subchapter M is establishing a “comprehensive safety system ... dedicated to towing vessels.” While this safety system, the TSMS, can be tailored to meet the needs of each individual operator, a TSMS serves the purpose of “establish[ing] policies, procedures, and required documentation to ensure the owner or managing operator meets its established goals while ensuring continuous compliance with all regulatory requirements.” Because Subchapter M mandates what elements that must be included in a TSMS, questions will arise with respect to a vessel owner’s or operator’s ability to defend himself or herself in the event of a serious marine incident.

Perhaps one of the greatest challenges that will be faced is that affirmative defenses, once exercised routinely, likely will become limited in both scope and application, and statutes which once afforded protection may be rendered useless. As such, all vessel owners and operators should expect certain legal issues to arise in the context of civil litigation under the General Maritime Law and involving personal injury or death, allisions or collisions.

First, Subchapter M requires towing vessels which elect the TSMS option to be “operated in accordance with the TSMS applicable to the vessel.” Thus, failing to adhere to the vessel’s TSMS may very well equate to a violation of the federal regulation requiring compliance.
Second, if a plaintiff proves the violation of a regulation (or the TSMS) and some causal connection between the violation and the injury, the vessel owner may well be absolutely liable. This principal of law, embodied in the Pennsylvania Rule, has been a part of federal maritime law since the United States Supreme Court’s 1873 ruling in The Pennsylvania.
Third, the violation of a regulation which has any causal relationship to the injury can result in the liability of the employer and any contributory negligence on the part of the injured employee will not be considered in the determination of apportionment of fault.
Fourth, a vessel owner will only be able to limit his liability to the value of the vessel and her pending freight under the Limitation of Shipowners Liability Act (46 U.S.C. App. §30501 et seq), if he proves that he lacked privity or knowledge of “the act or condition that caused the injury.” Various provisions of Subchapter M, generally under a TSMS, essentially charge the ownership/management with knowledge and require privity in the day to day operations of the vessel under the TSMS. It thus may be argued that, by statute, the owner’s or operator’s knowledge is mandated and privity may be implied.

In addition to the above legal issues, vessel owners will need time to adjust to civil litigation in a new system of extensive regulatory requirements. In most cases, they will have until July 20, 2018 to do so. However, we can expect discovery to become even more onerous. With the enactment of Subchapter M, the U.S. Coast Guard and industry hope not only to establish a comprehensive safety program for inland towing vessels, but also to ensure compliance with that program. As a result, with every regulation and requirement of Subchapter M comes an additional “compliance” regulation which mandates that the owner or managing operator document, record, or preserve “objective evidence” of its compliance with the regulation.

A brief overview of the proposed regulations reveals that, at a minimum, vessels opting for the Towing Safety Management System (TSMS) will be required to have and maintain on board the substantial documentation establishing compliance. Much of this documentation will be maintained in electronic format, making discovery easier for plaintiffs. The concern is that the TSMS will be a “roadmap” for plaintiffs counsel seeking to establish a pattern of non-compliance with federal regulation (i.e., Sub M) and a TSMS by a vessel operator or owner.

Finally, there is the issue of use of audits under Sub M for civil litigation. In the time remaining before the deadline for full transition to Subchapter M compliance, more attention should be given to the possibility of extending the protection given to Coast Guard accident reports to the documentation required to comply with the TSMS option. Reports created by the Coast Guard as part of a marine casualty investigation are protected by Title 46 of the United States Code.

Notwithstanding any other provision of law, no part of a report of a marine casualty investigation conducted under section 6301 of this title, including findings of fact, opinions, recommendations, deliberations, or conclusions, shall be admissible as evidence or subject to discovery in any civil or administrative proceedings, other than an administrative proceeding initiated by the United States.

The marine casualties that require reporting include:

death of an individual;
serious injury to an individual;
material loss of property;
material damage affecting the seaworthiness or efficiency of the vessel; and
significant harm to the environment.

Extending the same level of protection to internal audit reports under Sub M would encourage vessel operators to choose the TSMS option. The TSMS option is designed to be a more efficient way of towing safety management than relying solely on Coast Guard inspections, and Congress should provide to internal audits under Sub M the same protection as exists under 6301 for Coast Guard investigative reports to encourage the implementation of an even stronger and more proactive TSMS than a vessel owner or operator would otherwise craft and draft.

These are only some of the legal issues that will likely arise as vessel owners and operators enter into compliance with Subchapter M. Therefore, when crafting a TSMS, owner’s and operator’s should consider the legal ramifications of this new regulatory regime in order that the TSMS can be properly tailored to their operations, and thus drafted to as best as possible reduce exposure to such risks liabilities imposed upon them under Subchapter M.

The Author

Mark Hebert is a Partner at Jones Walker LLP.

(As published in the April 2017 edition of Marine News)