LECTURE 4

Collision at Sea and Liabilities
1.0 INTRODUCTION TO TO CRIMINAL LIABILITY
2.0 VIOLATING THE COLLISION REGULATIONS
2.2 Official Log Books
2.1 Duty of ship to assist the other in case of collision
LGC | ADMIRALTY LAW & MARITIME LITIGATION | 4
2.3 Dangerously Unsafe Ship and Owners and Master’s
Liability
2.4 Conduct Endangering Ships, Structures
and Individuals
2.5 Oil Pollution Sanctions under MSA
2.6 Involuntary manslaughter Legal Overview
3.0 CIVIL LIABILITY
3.1 Legal Liability and Vicarious Responsibility
3.2 Ship’s Liability and Management
3.3 Liability attaches to the ship
3.4 Master and crew
3.5 Tug or tow, Salvors and Pilots Liabilities
3.6 Port Authority Liability
4.0 MARITIME LIABILITY: COLREGS AND NEGLIGENCE
4.1 Breach of the Duty of Care, Burden of Proof and
Causation
4.2 Factual Causation
4.3 Legal Causation and Defenses
5.0 MARITIME FAULT APPORTIONMENT RULES
5.1 The Concept of Novus Actus Interveniens
5.3 Time Bar Defenses
6.0 SHIP AND OBJECT COLLISION CLAIMS
6.1 Tortfeasors’ Contribution in Admiralty
6.3 Mitigation of Loss
7.0 DAMAGES ASSESSMENT
5.2 When an innocent third ship claims against one of the tortfeasors
6.2 Remoteness, Foreseeability and Liability
7.1 Fundamental Principle: Restoration to Original State
7.2. Ship’s Value Determination
7.3 Loss of a Profitable Charterparty
7.4 Collision Damage and Repairs
7.5 Loss of Profit
7.6 Out of Pocket Expenses and Financial Loss
7.7 Detention time and dock charges
8.0 TIME LIMITS FOR COMMENCEMENT OF CLAIMS
9.0 INSURANCE MATTERS AND RISKS ARISING FROM COLLISIONS

LECTURE 4

COLLISION AT SEA AND LIABILITIES

• INTRODUCTION TO CRIMINAL LIABILITY

In accordance with Section 277 of the Merchant Shipping Act 1995, corporate entities representing shipowners, along with their respective directors, managers, secretaries, or equivalent officers, may face charges if it is demonstrated that an offense occurred with the approval, connivance, or negligence of any such officer within the corporate body or anyone acting in a similar capacity.

The Regulation 6 of Collision Regulations of Merchant Shipping (Distress Signals and Prevention of Collisions) Regulations 1996, provide as follows:

(1) Where any of these regulations is contravened, the owner or the vessel, the master and any person for the time being responsible for the conduct of the vessel shall each be guilty of an offense, punishable on conviction on indictment by imprisonment for a term not exceeding two years and a fine, or on summary conviction:

(a) in the case of any infringement of reg 10(b)(i) (duty to proceed with traffic flow in lanes of separation schemes) of the international regulation 35 and by fine not exceeding £50,000; and

(b) in any other case by a fine not exceeding the statutory maximum.

(2) It shall be a defense for any person charged under these regulations to show that the took all reasonable precautions to avoid the commission of the offense.

• VIOLATING THE COLLISION REGULATIONS

Failing to adhere to the Colregs, regardless of whether the violation results in a collision, is considered a criminal offense under the MSAs. In such cases, the prosecution is required to demonstrate intentional negligence. If any harm arises due to non-compliance, a provision assumes that the damage resulted from the intentional negligence of the individual responsible for the ship’s deck at that time, unless it can be proven that deviating from the regulation was necessary due to the circumstances.

The current stipulation encompasses any individual accountable for the vessel’s conduct at the relevant time and is subject to prosecution. It clarifies that both the ship’s master and owner cannot evade prosecution for the offense, even if the responsibility of bridge watch is delegated to another individual who commits the violation. To avoid conviction, the owner must demonstrate having taken all reasonable precautions in selecting a competent master and implementing a system to supervise the master, ensuring compliance with regulations. This offense falls under the absolute category, wherein the prosecutor is not required to prove the ‘mens rea’ of the offense.

However, compliance with international regulations for maritime safety, especially the substantial amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) in July 1995 and the International Safety Management Code (ISMC) system, becomes crucial evidence. qualification in line with international standards. This evidence assesses whether the master and crew received adequate training and

2.1 DUTY OF SHIP TO ASSIST THE OTHER IN CASE OF COLLISION

Section 92 of the MSA 1995 stipulates that:

(1) In every case of collision between two ships, it shall be the duty of the master of each ship, if and so far as he can do so without danger to his own ship, crew and passengers (if any)—

(a) to render to the other ship, its master, crew and passengers (if any) such assistance as may be practicable, and may be necessary to save them from any danger caused by the collision, and to stay by the other ship until he has ascertained that it has no need of further assistance; and

(b) to give to the master of the other ship the name of his own ship and also the names of the ports from which it comes and to which it is bound.

(2) The duties imposed on the master of a ship by subsection (1) above apply to the masters of United Kingdom ships and to the masters of foreign ships when in United Kingdom waters.

(3) The failure of the master of a ship to comply with the provisions of this section shall not raise any presumption of law that the collision was caused by his wrongful act, neglect, or default.

Legal penalties for non-compliance are succinctly outlined in the Act. If there is a failure to adhere to sub-section (1)(a) without a valid excuse, the individual is subject to penalties, including (i) a fine of up to £50,000 or imprisonment for a maximum of six months, or both, upon summary conviction; and (ii) a fine or imprisonment for a period not exceeding two years, or both, upon conviction on indictment. Failure to comply with subsection (1)(b) results in liability for a fine. In either situation, an inquiry into the individual’s conduct may lead to the cancellation or suspension of their certificate.

2.2 OFFICIAL LOG BOOKS

Section 77 of the Merchant Shipping Act 1995 stipulates that, unless otherwise mandated by regulations established under this section, every UK ship must maintain an official logbook. The regulations formed under this section have the authority to outline the specific details to be recorded in the official logbooks and may necessitate the presentation or submission of such logbooks under specified circumstances. These regulations may also include provisions for exempting certain ships from these requirements. Contravening any provision of this section through the regulations may constitute an offense, punishable by a fine. Deliberate destruction, mutilation, or rendering illegible of any entry in an official logbook may result in a fine on summary conviction.

Similarly Section 91 mandates that the captain of a UK vessel must communicate potential navigation hazards to nearby ships and onshore authorities; failure to do so may result in a fine.

2.3 DANGEROUSLY UNSAFE SHIP AND OWNERS AND MASTER’S LIABILITY

The MSA 1995 governs the repercussions associated with the operation of hazardous or unsafe ships in sections 94–107. Section 94, originating from section 30 of the MSA 1988 and modified by the Merchant Shipping Maritime Security Act 1997, outlines the criteria for defining a ship as ‘dangerously unsafe’. Section 95 empowers the inspecting officer at a UK port to detain such a ship, irrespective of its British or foreign registration.

Provisions pertinent to collision prevention are found in sections 98 and 100. Under section 98, derived from section 30 of the MSA 1988, both the master and the owner of a dangerously unsafe ship (or any other party assuming responsibility for safety, such as charterers and managers) are liable to commit an offense.

A defense is outlined in section 98(4), (5), (6), requiring the accused to prove that arrangements ensuring the ship’s fitness for sea had been made at the time of the offense. Section 100 (equivalent to section 31 of the MSA 1988) imposes a duty on the owner of any UK ship or any ship within UK waters, registered under the laws of another country, to take reasonable steps for safe operation. Failure results in liability, ranging from fines to imprisonment upon conviction. If the ship is chartered or managed by a party other than the owner, the same duty applies to that party.

The initial case applying the former equivalent of this section was The Safe Carrier. The ship-managers faced charges for not ensuring safe operation, leading to an engine breakdown. The House of Lords held that the offense required proof of the accused owner, manager, or demise charterer failing to take all reasonable steps for safe operation. Section 99 of the MSA 1995 deems the defective condition of a vessel or improper usage of a lighter or barge, endangering human life, as an offense. The Act also addresses penalties for violations related to the manning, qualifications, equipment, and management of vessels.

The Dangerous Vessels Act 1985, particularly section 1, authorizes the harbor master to order the removal of any vessel posing a significant and immediate danger to persons or property in the harbor. This includes conditions or contents that might cause a serious threat or limit harbor use.

2.4 CONDUCT ENDANGERING SHIPS, STRUCTURES AND INDIVIDUALS

Section 58 of the MSA 1995 pertains to the actions of the master or any seaman aboard a UK ship or a foreign ship within UK waters. Sub-section 2 specifies that if such an individual, while on board the ship or in its immediate vicinity, engages in any act causing or likely to cause harm to the ship, machinery, navigational or safety equipment, another ship, or results in the death or serious injury to any person, they will be deemed guilty of an offense. This act must either be intentional, a breach or neglect of duty, or the result of the person being under the influence of alcohol or drugs at the time (sub-s (3)).

The same legal consequences apply if the person omits to preserve the ship, etc., from loss, destruction, or serious damage, or fails to protect individuals on board from death or serious injury, or neglects to prevent their ship from causing harm to others (sub-s (4)). The offense also encompasses situations where the person performs their duties related to the operation of the ship in a manner likely to cause such harm or fails to properly discharge their duties to an extent that may cause such harm (sub-s (4)).

Punishment for the offense includes a fine on summary conviction or imprisonment (up to two years) upon conviction on indictment (sub-s (5)). The accused may mount a defense under sub-s (6), arguing that they took all reasonable steps to fulfill the duty imposed by sub-s (2), or that they were under the influence of medically prescribed drugs without reason to anticipate their impact. In cases falling under sub-s (4), proof of reasonable precautions and due diligence to avoid the offense can serve as a defense. Although there is no defense for deliberate acts or omissions, both subsections provide a further defense if avoiding the offense involves disobeying a lawful command or if, given the circumstances, the accused could not reasonably have foreseen or avoided the loss, damage, death, or injury in question.

However, the earlier legal provision did not encompass neglect of duty, such as a lack of proper care in fulfilling the responsibilities of the master or seaman. Consequently, in the collision between The Gladys and The Prome, leading to the sinking of The Prome and its crew, the simple negligence of the master, resulting in a poor lookout, did not constitute a criminal offense. Subsequent to this case, there were no further criminal prosecutions until 1980, when The Harcourt case marked a significant development. . In this instance, the master, incapacitated in bed, had entrusted an experienced mate with the task of keeping watch. However, the mate, in turn, left an experienced deckhand on watch after sunset, failing to activate the forward anchor light, creating a potentially hazardous situation.

The master, informed of the incident by police officers days later, admitted responsibility and was found guilty. This ruling suggests that the master’s duty is non-delegable, requiring personal verification of the delegated responsibilities’ proper execution. This principle extends to the current statute, Section 58. Furthermore, the decision indicates that actual loss is not a prerequisite for a breach of statutory offense provisions.

2.5 OIL POLLUTION SANCTIONS UNDER MSA

Under the Maritime Safety Act of 1995, criminal penalties are applicable to incidents of oil pollution that go beyond those resulting from collisions. Section 136 places an obligation on the owner or master of a vessel to promptly report any discharge of an oil mixture from the vessel into a harbor within UK waters or any escape of oil from a vessel into any UK waters. This report must be made to the harbormaster or relevant authority. Failure to adhere to this duty can result in punishment, with a fine imposed upon summary conviction. Committing an offense occurs if an individual, to whom a direction is properly issued under section 137, violates or fails to comply with any requirement specified in the direction (section 139).

2.6 INVOLUNTARY MANSLAUGHTER LEGAL OVERVIEW Involuntary manslaughter can be charged in cases involving a breach of duty, such as violations of the Colregs or provisions outlined in the MSA 1995 concerning dangerously unsafe ships (sections 94, 98) and unsafe ship operation (section 100). If such breaches result in loss of life and meet the criteria for criminal negligence under common law, a prosecution for manslaughter may ensue. A relevant case, R v Adomako, illustrates this principle. In this case, the appellant, an anaesthetist, failed to notice the disconnection of oxygen during an eye operation, leading to the patient’s death. Although negligence was acknowledged, the central issue was whether it amounted to a criminal offense. The jury convicted the appellant of manslaughter, a decision upheld by the Court of Appeal.

The House of Lords clarified that, in cases of manslaughter involving a breach of duty, the jury can rely on the gross negligence test without necessarily referring to the recklessness definition in R v Lawrence. Regarding corporate liability, convicting a corporation for criminal negligence is challenging unless the “directing mind and will” individuals are found guilty of gross negligence. The Herald of Free Enterprise case highlighted difficulties in attributing guilt to a corporate body. A subsequent statutory offense, created by the MSA 1988, holds the owner, demise charterer, or ship-manager criminally liable for unsafe operation, with penalties outlined in the MSA 1995.

• CIVIL LIABILITY

As can be seen later with the column that dealt with Collision Regulations (Colregs) and its application, it will be clarified that the mere breach of the Colregs no longer implies a presumption of fault. To establish civil liability arising from a ship collision, the claimant bears the burden of proving the facts leading to liability due to negligence or lack of good seamanship. The breach of Colregs serves as evidence for the court to assess the defendant’s blameworthiness and determine the causative impact of the fault.

The principles of negligence law apply, with an exception under s 74 of the Harbours, Docks and Piers Clauses Act 1847, establishing strict liability for damage to a harbor’s property by a vessel. In negligence cases, a three-stage test – reasonable foreseeability, proximity, and fairness, determines the existence of a duty of care, varying based on circumstances and damage type. For cases of direct physical injury, the three-stage test is typically satisfied. However, claims for pure economic loss pose challenges in meeting the second and third stage tests.

The duty of care is evident in collision cases, and the same applies to economic loss resulting from physical damage. For claims involving pure economic loss, especially by time or voyage charterers, the examination of this aspect is contextually linked to damages. The subsequent examination of the burden of proof includes special rules for the division of loss in sea collisions, now statutory under the MSA 1995, s 187.

3.1 LEGAL LIABILITY AND VICARIOUS RESPONSIBILITY

Regarding liability, the employer of the wrongdoer in personam, such as the ship owner or charterer, may be vicariously liable for a collision caused by the negligent act of those on board. The act must be within the scope of employment, but questions arise regarding liability for malicious or criminal acts. Past decisions, such as The Druid, provide insights, but non-admiralty cases demonstrate that liability may exist for fraudulent acts within the course of employment. Vicarious liability depends on the wrongful acts occurring within the scope of employment, with complex outcomes based on individual case facts.

The employer is generally not liable for acts outside the course of employment unless they involve tortious conduct linked to acts within the course of employment. The concept of “occurred in the course of employment” relates to the authority granted to the employee or agent on behalf of the employer or principal. The employer is not liable for acts not within the course of employment unless there is connivance with the employee or agent. The cases of bailment and fiduciary duty differ, as due care is expected within those relationships. Despite varying interpretations, The Druid’s decision may not align with current legal standards. The master, not the employer, is usually personally liable for criminal acts, and vicarious liability depends on acts occurring within the scope of employment.

3.2 SHIP’S LIABILITY AND MANAGEMENT

Individuals responsible for overseeing the management and operation of a ship may face liability for collision damage due to negligent ship management. This liability is separate from vicarious liability. Negligence arises if the ship is not adequately equipped, manned, and maintained, leading to a collision. The responsible parties must demonstrate that they took due care in appointing competent repairers, paid attention to potential malfunctions, and couldn’t have reasonably discovered the defect.

If a collision occurs due to defective repairs, and the ship is properly maintained, the relevant person (shipowner, demise charterer, or manager) must provide detailed evidence that they exercised due care in repair appointments, monitored equipment for malfunctions, and couldn’t reasonably have detected the defect. In such cases, the repairer or equipment supplier may be joined as a second defendant for contribution to liability under the Civil Liability (Contribution) Act 1978. Employers, shipowners, or demise charterers can be held liable for injuries to their employees caused by defective equipment on board.

The Employer’s Liability (Defective Equipment) Act 1969 imposes liability on employers for injuries resulting from equipment defects, even if caused by a third party. Liability insurers typically indemnify the assured under the respective insurance policy for collision-related liability to third parties.

3.3 LIABILITY ATTACHES TO THE SHIP

Apart from personal liability, liability in rem attaches to the ship for collision damage, as damage caused by the ship constitutes a maritime lien. This applies even if the shipowner is not the employer of the master and crew during the negligence, especially under a demise charter. 3.4 MASTER AND CREW The individual whose negligence caused the collision, such as the master, pilot, seaman on watch, or helmsman, is liable.

The master is not vicariously liable for the crew’s wrongdoing without his fault. However, under the 1976 Limitation of Liability Convention, the master and crew can limit their liability.

3.5 TUG OR TOW, SALVORS AND PILOTS LIABILITIES

In a towage contract, it’s common to include a clause stipulating that the master and crew of the tug are considered the servants of the hirer of the tug. This clause imposes vicarious liability on the hirer for any negligent acts or omissions of the tug, but it specifically governs the contractual obligations between the parties.

The determination of liability for a collision involving a third party depends on who had control of navigation at the time of the incident. The notion that the tow and tug always constitute a single unit, making the tow consistently liable for the negligence of the tug’s master or crew, has been implicitly overturned by The Devonshire, in which the House of Lords introduced the control theory. Whether the tug exclusively controls the tow’s navigation in all aspects is a factual question.

In a case involving a towed dumb barge colliding with The Devonshire due to negli gence on the part of the tug and The Devonshire, the tow, considered an innocent party, sued the owners of The Devonshire for collision damage.

The defense of contributory negligence, based on the tug’s negligence being deemed as the tow’s negligence under the ‘unit’ theory, failed because the tow had no control over navigation in this instance.

Sole control by the tug occurs when the tow is unmanned or unable to navigate. In most situations, navigation is shared, and both the tug and tow are responsible for their respective negligent acts or omissions that may contribute to a collision and resulting damage. Liability depends on the party at fault. Under US law, third-party claims consider the fault of the tug and tow separately in proportion to their individual fault. However, when it comes to navigation rules, a tug and tow are treated as a single vessel obligated to observe rules as a unit. The concept of ‘dominant mind’ is used to attribute liability to the tug and absolve the tow from liability in casualties involving the tow or the entire flotilla. In a salvage operation, Salvors acting as independent contractors, assume full control of navigation based on the condition of the vessel to be salvaged. They owe a duty of care not only to the salvaged property but also to third parties. Breaching this duty during salvage operations, leading to damage, exposes them to liability.

They can limit this liability under the provisions of the Limitation Convention 1976, as enacted by the MSA 1995.76 Damages awarded for negligence during salvage ope rations will be set off against the salvage award. Similarly, pilots being recognized professionals and independent contractors, are licensed by port authorities. However, mere licensing doesn’t make the port autho rity liable, as per s 22(8) of the PA 1987. In some cases, a port authority may employ a pilot, but the authority is not vicariously liable for the pilot’s navigation faults on board a ship. Section 16 of the PA 1987 holds a shipowner vicariously liable for the pilot’s negligent acts or omissions on board. The port authority may be liable for its own faults, such as not providing sufficient and experienced pilots according to by-laws.

The shipowner can sue the pilot or the port authority, each for their own faults, but their liability is limited by s 22 of the PA 1987 to £1,000 plus whatever dues the pilot was to earn on the relevant assignment.

3.6 PORT AUTHORITY LIABILITY

A port authority may face responsibility towards vessels utilizing its facilities if it negligently fails to ensure navigational safety, thereby breaching statutory duties. Additionally, there exists a common law duty to maintain a safe environment for port users. The presence of obstacles can lead to ship collisions or contact with unlit objects. When a ship sinks and transforms into a wreck, statutory obligations outlined in the MSA 1995, local Acts, and by-laws mandate the authority to take specific measures to prevent accidents.

A recurring issue revolves around determining whether the owner or the port authority bears liability for damages caused by a sunken wreck to third parties. The case of The Utopia established that the owner’s liability depends on whether they have relinquished possession or control of the wreck.

Port authorities possess broad statutory powers to address sunken ships within their jurisdiction. The shipowner may be relieved of liability only when the port authority, under its statutory powers, assumes possession and control of the vessel. However, the Court of Appeal clarified that this exemption applies only if the shipowner or their servants were not negligent under common law.

The case of The Utopia exemplifies a scenario where blame was attributed to the port authority. Following a collision with HMS Anson, The Utopia sank in Gibraltar Bay. Despite the owners lighting the wreck, the port authority complained about insufficient lights and subsequently placed a hulk near the wreck to warn vessels. In legal proceedings initiated by the owners of the Primula, it was determined that the port authority, not the owners of the wreck, was liable for the ensuing collision, as control and management had been legitimately transferred to the port authority within the scope of its powers.

The Court of Appeal, in the Dee Conservancy Board v McConnell case, outlined the respective duties of a port authority and wreck owners. The duty of the shipowner is to use their vessel with reasonable skill and care to prevent harm to others, while the port authority is obligated to take reasonable care in keeping the port safe for public use. The court held that owners, by negligently causing their vessel to sink and obstructing navigation, were liable for removal expenses and could not escape liability by abandoning the wreck.

The court’s decision in The Utopia was explained by distinguishing the circums tances, emphasizing that liability exemption for owners is contingent on the port authority assuming the duty of indicating the wreck’s position to prevent collisions. Mere abandonment by owners after a collision does not absolve them of subsequent liability; only when the port authority unequivocally assumes responsibility and safety precautions may the owner be found not liable. In instances where a wreck remains submerged in the fairway, the omission by a port authority to raise it, leading to collisions, is regulated by statute and common law. The MSA 1995 provides powers to the authority to manage wrecks, while the Occupiers’ Liability Act 1957 imposes a duty of care on the port authority to ensure the premises are safe. If the port is deemed unsafe, a warning notice should be dis played. The authority is responsible for proper mooring and typhoon precautions; failure in these areas may result in liability for damages caused by drifting vessels due to insufficient or parted moorings. Additionally, a port authority may be suscep tible to liability if its servants are negligent in navigation under the direction of a harbor or dock master, as authorized by statute, leading to damages to or caused by the ship.

• MARITIME LIABILITY: COLREGS AND NEGLIGENCE

The obligation owed to other vessels at sea is grounded in the principles of negli gence. In the Admiralty Court, Lord Stowell, as noted in the Woodrop Sims case, outlined four possible scenarios for a collision:  (a) A collision without blame, such as due to a storm or without human error, resulting in the loss being borne by the affected party.

(b) Both parties share blame due to a lack of diligence and skill, leading to a proportional apportionment of the loss.

(c) Misconduct by the suffering party alone, who must bear their own loss.

(d) Fault of the ship that collided with the other—entitling the innocent party to seek compensation.

According to section 187(4) of the MSA 1995, a violation of the Colregs is just one factor considered in determining fault. Civil liability arises only if the infringement caused the collision. The crucial question is whether the failure to observe a specific regulation set in motion a chain of events leading to the collision, or if there was an intervening factor breaking this chain, with that factor being the true cause of the incident. The burden of proof lies with the party alleging negligence, requiring the demonstration of three elements to establish the defendant’s liability:

(a) Breach of the duty of care.

(b) Demonstration that the breach caused or contributed to the collision (causation in fact).

(c) Confirmation that it caused the claimed damage, which must not be too remote (causation in law and remoteness of damage). Therefore, a mere breach of the Colregs does not automatically presume fault.

4.1 BREACH OF THE DUTY OF CARE, BURDEN OF PROOF AND CAUSATION

The fulfilment of a defendant’s duty of care is contingent upon adhering to the standard expected of a reasonable and careful individual, devoid of personal opinions. Any breach in this duty may result in liability for those responsible for a ship’s operation or chartering, provided they should have reasonably foreseen that their negligence could lead to harm for others navigating the same waters, as established in Heranger v Diamond (1996).

In a legal proceeding arising from a collision in the Thames involving The Diamond and The Heranger, the courts found both vessels at fault, attributing greater blame to The Diamond for failing to comply with river by-laws. The House of Lords, in the appeal by The Heranger’s owners, maintained that The Heranger was also responsible for not taking timely action to avoid the collision. This case clarified two key issues: the justification for maintaining speed in anticipation of another vessel’s action is a factual matter, and the burden of proof lies with the party alleging negligence. of fault.

The legal principle of res ipsa loquitur comes into play when the claimant can easily establish a breach of duty, and the burden of proof shifts to the defendant. In cases where the facts inherently indicate negligence, the defendant must present strong evidence, such as the defense of an inevitable accident, to counter the presumption

The Merchant Prince case exemplifies this, emphasizing that a reasonable explanation is crucial to rebutting the presumption of negligence.

4.2 FACTUAL CAUSATION

Factual Causation in fact, closely linked to defenses raised by the defendant, requires the claimant to demonstrate not only a breach of duty but also that this breach directly caused the collision. The Humbergate case illustrates this, where the defendant’s vessel was deemed causative for not adhering to navigational signals. The Andulo case further distinguishes causative from non-causative faults, emphasizing that negligent actions must have a direct impact on the collision to be considered.

Several cases, such as The Statue of Liberty, demonstrate the courts’ evaluation of each vessel’s blameworthiness and the apportionment of fault based on the causative potency of their actions. The assessment considers whether the faults were the most probable cause of the collision. This process ensures a fair evaluation of each party’s responsibility, even in situations where multiple factors contribute to the accident.

4.3 LEGAL CAUSATION AND DEFENSES

Causation (in law) in legal terms involves determining the primary cause of loss or damage after eliminating irrelevant factors. Following the removal of unrelated causes, the court must identify the legally significant cause for the harm suffered, deciding whether the defendant bears legal responsibility. An illustrative example involves subsequent damage occurring independently of the initial collision, relea sing the defendant from liability if the later damage subsumes that caused by their fault. This principle, as seen in The Carslogie case, pertains more to assessing damages.

A specific case outlines a ship damaged in a collision, undergoing temporary repairs before encountering heavy weather on the way to permanent repairs. The court held the collision-caused damage’s repair time not chargeable to the defendant for the heavy weather damage. The scenario underscores the nuanced evaluation of causa tion and liability.

The text further discusses the defense mechanisms available to defendants, particu larly the concept of “inevitable accident.” This defense applies when the accused party couldn’t prevent the incident through ordinary care and skill. The burden of proving an inevitable accident rests on the defendant, requiring them to demons trate that an external, unavoidable event was the proximate cause. The Marpesia case exemplifies this defense, emphasizing the necessity for careful navigation scru tiny.

After establishing a prima facie case of negligence, the defendant must show that the accident’s proximate cause was genuinely unavoidable due to external events. The text provides insights into legal precedents, such as The Merchant Prince, which em phasize the difficulty defendants face in proving an inevitable accident.

Notably, an inevitable accident is not a valid defense for damage to a harbor’s pro perty under statutory strict liability, as specified in s 74 of the HDPCA 1847, where even acts of God are irrelevant unless the ship is beyond human control.

• MARITIME FAULT APPORTIONMENT RULES

The rule known as the proportionate fault rule, outlined in section 187 of the MSA involved. 1995, specifically in sub-section (1)(a), stipulates that when damage or loss occurs due to the fault of two or more ships, the responsibility to compensate for such damage or loss is to be distributed in proportion to the degree of fault of each vessel

The application of this rule is subject to certain conditions. It is applicable only when the damage results from the fault of multiple ships, and the apportionment pertains solely to the vessels at fault and their cargo. The rule does not require the colliding ships to directly impact each other; fault in one ship can affect others involved. Moreover, a ship not contributing to the loss or damage bears no liability.

Section 187, sub-section 2, allows an equal division of loss only when establishing different degrees of fault is not feasible. However, sub-section 1 is obligatory, emphasizing that the court should not hastily presume equal blame solely due to difficulties in assessing each ship’s fault.

An illustrative case in the English Channel involving the vessels Arietta and Anneliese exemplifies the application of this rule. The collision occurred under specific navi gational circumstances, leading to a legal dispute. The judge, following careful consi deration and aided by nautical assessors, apportioned blame between the vessels based on their respective degrees of fault. Another case, Miraflores v Abadesa, demonstrates that fault assessment in collisions isn’t limited to physical impact or navigational errors. Deliberate actions leading to subsequent events can influence fault apportionment. The court found that the vessel negligently failing to give way bore greater fault than the one responding foolishly to the situation. The narrative also discusses the effects of subsequent negligence on causation. It explores scenarios where intervening actions, even if contributory to the loss, might not break the chain of causation.

In cases such as The Calliope, the court adopted a nuanced approach, sub-apportioning subsequent damage between parties at fault for the original collision, considering the continuous effect of the collision. Ultimately, the legal principles outlined emphasize the need for a thorough evalua tion of fault in maritime collisions, considering various factors, including subse quent actions and their impact on causation.

5.1 THE CONCEPT OF NOVUS ACTUS INTERVENIENS

The concept of “actus novus interveniens,” as discussed in The Paludina, implies that there will be no subdivision of liability if the chain of causation is disrupted due to a novus actus interveniens. A pertinent example is illustrated in the case of Fritz Thyssen, where the collision between the plaintiff’s vessel, Mitera Marigo, and the defen dant’s vessel, The Fritz Thyssen, resulted in significant damage. Despite efforts to pump water out of the damaged hold, the vessel eventually sank. The court deter mined that the negligence of Mitera Marigo’s master, particularly the refusal of sal vage assistance, constituted a reckless decision that broke the chain of causation.

In contrast, the case of The Guildford involved a different outcome. The master’s decision to await tugs for assistance after a collision, instead of accepting help from the colliding vessel, was deemed justified since there was no deterioration in the Guildford’s situation during the waiting period. Consequently, the sinking of the Guildford was attributed to the collision, and the vessel was entitled to recover losses caused by the proportionate fault of the other party.

Exceptions to the rule of proportionate fault were discussed, emphasizing situations where the division of loss based on blame cannot be applied. One such exception is the concept of “alternative danger,” where the claimant’s actions are influenced by circumstances imposed by the defendant’s servants. In such cases, the party plea ding alternative danger aims to demonstrate how the danger arose, providing a counter defense to contributory negligence. The rule highlights that a person in charge of a vessel, facing a sudden emergency caused by another vessel’s default, should not be considered negligent if their actions are reasonable under the cir cumstances known to them at that moment.

Another scenario discussed involves drawing a clear line between two separate negligent acts. Section 187 of the MSA 1995 clarifies that a vessel is not liable for loss or damage to which its fault has not contributed. However, determining when the second negligent act is sufficiently removed from the first can be challenging. The courts consider factors such as the contemporaneity of negligence, the time, place, and circumstances of each act. The Admiralty Commissioners v SS Volute case exemplifies this, where a collision resulted from both vessels’ faults, and both were deemed to share the blame.

In summary, the legal principles discussed encompass scenarios where the chain of causation is disrupted, exceptions to the rule of proportionate fault, and challenges in drawing a clear line between successive negligent acts in maritime cases.

5.2 WHEN AN INNOCENT THIRD SHIP CLAIMS AGAINST ONE OF THE TORTFEASORS

In cases where an innocent third ship files a claim against one of the wrongdoers, it is crucial to bear in mind the application of the division of loss rule outlined in sec tion 187 of the Merchant Shipping Act (MSA) 1995. This rule is pertinent when two or more ships, involved in a collision, are found at fault. If an innocent third ship is part of a collision caused by the fault of two other ships and subsequently seeks compensation from one of the wrongdoers, the common law rule comes into play.

Essentially, the innocent party can claim the entirety of their damages from either or both joint wrongdoers. The wrongdoer who makes the payment can seek contribu tion from the other wrongdoer under the CLCA 1978, based on the excess amount paid beyond their share of liability. Alternatively, their respective liabilities can be apportioned in accordance with section 187. If only one wrongdoer is sued, the other can be added as a third party or second defendant later on.

The defense of necessity may provide an avenue for the defendant to avoid liability in situations where an action, which would otherwise be considered actionable negligence, is justified due to the necessity of choosing between two perilous situa tions, either in the interest of their own ship or in the interest of third parties. It’s important to note that this defense cannot be invoked if the necessity was caused by the defendant’s own fault.

5.3 TIME BAR DEFENSES

Regarding time-bar defenses, section 190 of the MSA 1995 establishes a two-year period within which any claim or lien can be enforced against a ship or its owners for property damage or loss caused by the ship’s fault to another ship, its freight, or any property on board. This section doesn’t apply when the collision involves a ship and another object, in which case the six-year time limit provided by the Limitation Act 1980 applies to property damage claims. For personal injury or loss of life claims, section 190(1)(b) does not cover claims by persons on board the carrying ship and is subject to a three-year time limit under the LA 1980, as amended by the Latent Damage Act 1986, or a two-year limit if the Athens Convention applies.

Sections 5 and 6 of section 190 allow a court to extend the period for bringing proceedings under certain conditions. If there has been no reasonable opportunity to arrest the ship within the jurisdiction of the court during the allowed period, the court may extend the time to facilitate the arrest.

When it comes to claims for loss of life or personal injury, the rule of division of loss in section 187 of the 1995 MSA does not apply. Sections 188 and 189 of the Act address liability in cases of loss of life or personal injuries. Section 188 stipulates that if loss of life or personal injuries occur due to the fault of a ship and another ship or ships, the owners of the ships shall be jointly and severally liable, allowing the clai mant to seek full damages from any one of the wrongdoers.

The discussion then delves into historical cases and legal principles, such as The Bernina case, to elaborate on the development and application of rules related to the division of loss, liability for death or personal injury, and claims for cargo damage. The narrative also touches upon the differences in legal approaches between various jurisdictions, emphasising the complexities that arise in internatio nal maritime law.

63 6.0 SHIP AND OBJECT COLLISION CLAIMS

Contributory negligence in ship collisions is regulated by s 187 of the MSA 1995, which allocates fault between involved ships. However, when a ship collides with an object, the LR(CN)A 1945 governs contributory negligence. This Act aligns common law rules with admiralty practices. Unlike admiralty, the LR(CN)A 1945 employs a ‘unit approach’ in assessing multiple faults, contrasting the individual evaluation in admiralty. The claimant’s negligence is weighed against the collective conduct of defendants in liability proceedings. In contribution actions under the CLCA 1978, the extent of each defendant’s responsibility is determined, either joined with the main action or separately.

In Fitzgerald v Lane, the plaintiff sued multiple defendants for personal injury damages. Contributory negligence was established in liability proceedings, with a separate apportionment of liability and contribution under the LR(CN)A 1945 and CLCA 1978, respectively.

The Ellen M case involved a collision due to the bridgemaster’s negligence and the ship’s subsequent maneuvers. Both were deemed causative, leading to equal blame under the LR(CN)A 1945. Apportionment considered culpability and causative potency, resulting in shared responsibility.

In cases without contribution between tortfeasors, fault apportionment is deter mined in liability proceedings. The Belle Usk example illustrates liability when a ship’s bad seamanship leads to collision, while the risk of ship-cranes contact is highlighted in The Maersk Colombo incident, attributing 15% contributory negli gence to crane owners.

6.1 TORTFEASORS’ CONTRIBUTION IN ADMIRALTY

Contribution among joint tortfeasors in non-admiralty cases, according to common law, results in joint and several liability. If one tortfeasor settles the claim in full, it prevents the claimant from pursuing the others, extinguishing the cause of action. The ability to seek contribution between joint tortfeasors is governed by the Civil Liability (Contribution) Act -CLCA 1978. Under these acts, a tortfeasor who has paid damages in full can initiate a separate action to claim contribution from the other wrongdoer.

In admiralty cases involving property claims, when damage occurs concurrently due to the fault of multiple wrongdoers, there is a division of loss and apportionment of liability based on the blameworthiness and causative potency of each party’s faults.

For non-property claims in admiralty, joint and several liability, as per common law, also applied to personal injury or loss of life claims. These claims are now regulated by the MSA 1995, with contribution rights governed by the relevant statutory provi sions.

In cases where an innocent third party ship is damaged by the fault of two other ships, the innocent party can recover full damages from either tortfeasor. If one tortfeasor pays the entire damage, the right of contribution is based on the CLCA 1978. This act may be advantageous due to a longer time limit for claiming contribution and restrictions on challenging the plaintiff’s liability.

When the MSA 1995 provisions do not apply, such as in collisions involving a ship and a non-ship, or a ship and property in a harbor, the common law rule and relevant statutes come into play. Contributory negligence is addressed by the LR(CN)A 1945, and contribution between joint tortfeasors is governed by the CLCA 1978.

Regarding the remoteness of damage, the burden of proof lies with the claimant to demonstrate that the defendant’s act caused both the collision and the claimed damage. The common law initially held defendants liable for damage that would ordinarily result from their wrongful act, distinguishing between direct and remote consequences to avoid excessive liability for remote outcomes.

6.2 REMOTENESS, FORESEEABILITY AND LIABILITY

The widely accepted principle regarding the “remoteness” of damage asserts that a defendant is only held liable if they could reasonably have anticipated the type of harm experienced by the claimant. To establish a case, the claimant must demons trate that the defendant’s breach of duty directly caused the alleged damage and that such damage is not excessively distant. The formulation of this principle can be traced back to The Wagon Mound (No 1), a pivotal decision by the Privy Council. Before this ruling, the Court of Appeal, in Re Polemis, had determined that a defen dant would bear responsibility for the immediate consequences of negligence, irres pective of whether the actual harm suffered was reasonably foreseeable.

The imperative lies in summarizing and contrasting two legal cases. In the first case, referred to as the Polemis case, a time charter party contract exempted the shipowner and charterer from liability for fire damage. The ship, loaded with cargo including benzine and petrol, suffered destruction due to a negligent act by the char terers’ stevedores, resulting in a fire. The shipowners sought damages, the arbitra tors ruled in their favor, and the Court of Appeal affirmed.

The charterers argued that the fire exception in the charterparty protected them and that the damages were too remote. The court, however, held that the exception did not cover negligence by the charterers’ servants, and since the damage resulted directly from the negligent act, the charterers were liable, regardless of foreseeabi lity.

Scrutton LJ summarized the negligence principle, stating that if a reasonable person would foresee damage, the act is negligent. The court’s focus was on the negligent act’s direct traceability to the damage, even if the exact outcome wasn’t anticipated. The second case, the Wagon Mound (No 1), involved oil spillage caused by the defen dants’ negligence. The spilled oil led to a fire damaging a wharf owned by the plain tiffs. The trial judge, relying on Polemis, found the defendants liable for all damage. The Full Court, while critical of Polemis, considered it binding.

The Privy Council, in The Wagon Mound (No 1), rejected Polemis, emphasizing fore seeability in determining liability. Viscount Simond argued against Polemis, stating that foreseeability is crucial, distinguishing between tort and contract damages. The court held that if damage is unforeseeable, even if directly resulting from negligence, liability doesn’t arise.

The Wagon Mound (No 2) involved a claim for negligence and nuisance by the owners of vessels damaged in the fire. The Privy Council reiterated the foreseeabi lity test. Liability for nuisance required foreseeability, and negligence liability depended on a reasonable person foreseeing the risk. The appeal on nuisance and cross-appeal on negligence were allowed. Further portions of his ruling shed light on the complexities surrounding the defini tion of the terms ‘reasonably foreseeable’ by drawing comparisons to the factual scenarios in other legal cases.

In The Wagon Mound (No 1), the board’s focus was not on varying degrees of foreseeability, as the determination was that the fire was not foreseeable at all. Therefore, Lord Simonds had no need to elaborate on the state ment that the ‘essential factor in determining liability is whether the damage is of such a kind as the reasonable man should have foreseen.’

Contrastingly, in the present case, the findings indicate that a reasonable person in the ship’s chief engineer’s position would have recognized some risk of fire. This prompts the initial question: what precise meaning should be ascribed to the terms ‘foreseeable’ and ‘reasonably foreseeable’ in this context?

Before Bolton v Stone, legal cases fell into two categories: those where the risk would have been considered unreal before the event, and those where a real and substantial risk existed. Bolton v Stone involved a cricket ball injuring a passerby on a public road, a scenario deemed foreseeable due to its previous occurrences. Howe ver, the House of Lords concluded that the risk was so minimal that a reasonable person could ignore it. Nevertheless, this does not imply that neglecting a risk of such small magnitude is universally justifiable.

Neglecting such a risk would only be reasonable if there were a valid reason, such as significant expense to eliminate the risk. In the present case, discharging oil into Sydney Harbour lacked any justification. It was not only an offense but also entailed substantial financial loss. The ship’s engineer had a duty and interest in halting the discharge immediately. Their Lordships assert that the crucial question is whether a reasonable person, with the knowledge and experience expected of the ship’s chief engineer, would have known about the real risk of the oil catching fire and causing serious damage.

66 They disagree with the trial judge’s statement regarding the difficulty in assessing liability based on the foreseeability of a relatively low-risk fire. In complex legal matters like this, decisions are often applied to situations distant from their origin, and reliance on certain observations from prior cases may be overstated. Their Lordships contend that a qualified chief engineer would have recognized the real risk, contradicting Walsh J’s suggestion that a real risk, if described as remote, should be deemed not reasonably foreseeable. They emphasize that neglecting a risk is justifiable only if it presents no difficulty, involves no disadvantage, and requires no expense. The evidence shows that the oil discharge took a considerable time, and a vigilant ship’s engineer would have noticed it early on. The ship’s engineer should have known the possibility of igniting this type of oil on water, as it had occurred before. The argument that such incidents could only happen in very exceptional circums tances does not absolve a reasonable person from taking preventive measures when it is easy to do so. If it is evident that a reasonable person would have foreseen and prevented the risk, the appellant is liable for damages. Despite the judge finding this a difficult case with potential for different conclusions, their Lordships maintain that the respondents are entitled to succeed on the issue. The judgment under appeal includes a verdict in favor of the respondents on the nuisance claim, a verdict in favor of the appellants on the negligence claim, and a directive to enter judgment for the respondents.

Consequently, their Lordships’ findings uphold the direction to enter judgment for the respondents but allow the appeal against the verdict in favor of the respondents and the cross-appeal against the verdict in favor of the appellants. These cases highlight the evolution of legal principles, moving away from Polemis’ strict liability for all direct consequences of a negligent act. The Wagon Mound series reinstated foreseeability as a crucial factor in determining liability. The Trecarrell serves as an illustrative case in shipping, highlighting that the specific manner in which damage occurs is not crucial to the foreseeability test. In a scenario involving the motor vessel Trecarrell, undergoing specialized repairs with the appli cation of vinyl lacquer in a ship-repair yard, a mishap during the transfer of flam mable lacquer resulted in a fire damaging both the ship and the yard. Legal procee dings ensued, with the shipowners suing the contractors, who, in turn, brought the ship-repairers into the litigation. The court, presided over by Brandon J, determined that the employee’s negligence, even if not foreseeing the exact source of ignition, was sufficient to establish foreseeability in a situation requiring a high degree of care.

The judgment favored the shipowners and the repair yard in the third-party proceedings. LGC | Brandon J emphasized that the question of reasonable foreseeability depends on the specific facts of each case. In The Daressa, foreseeability was discussed concerning potential damage in a collision. Brandon J clarified that while reasonable foreseeabi lity is generally a factual matter, in common human experience scenarios like cros sing a road, courts can decide without specific evidence.

In technical fields, evidence may be necessary, but intermediate cases exist where evidence could assist but is not essential. The extent of damage resulting from a negligent act is considered, and it is noted that as long as the consequences were foreseeable, the actual extent may not matter. Contributory negligence on the part of the claimant or a novus actus interveniens breaking the chain of causation could impact the liability for damages. Legal prece dents such as The City of Lincoln and The Metagama are cited to illustrate these principles. In The Arzew, contributory negligence was central to the case.

The plaintiffs alleged negligence by the defendants in causing an oil fire during welding operations, while the defendants claimed contributory negligence by the plaintiffs for carrying out welding when there was gas oil on the water’s surface. The court found that the igni tion was caused by a piece of molten metal, and contributory negligence hinged on whether those conducting the welding were aware of or should have been aware of the gas oil.

The judge ruled in favor of the plaintiffs, emphasizing the difficulty in detecting colorless gas oil and the absence of notice of its presence before the fire as its ratio.

6.3 MITIGATION OF LOSS

The requirement to minimize loss or damage is often considered an obligation for a claimant, who is expected to take reasonable steps to mitigate their loss when fea sible. This entails assessing how a prudent uninsured party would have responded post-collision. The responsibility falls upon the ship’s master and crew to adopt rea sonable measures to reduce damage and safeguard the ship, cargo, or passengers from further harm.

Numerous cases explore this matter, with some delving into causation-related issues discussed earlier. This aspect is intricately linked not only to foreseeability but also to causation, the rule of remoteness, and the measurement of damages. In a passage from The Metagama, Viscount Dunedin articulated that a damaged party must make efforts to minimize their loss. This aligns with the notion that if the claimant could have reasonably avoided some damage, that portion of the damage may not be direc tly attributable to the complained-of act.

It is essential to exercise caution when applying the quoted text concerning “damage…as arises directly from the act,” as it predates the 1960 settlement of the foreseeability test for damages. Nonetheless, it emphasizes that in cases involving multiple causes, the “direct” or “predominant” cause takes precedence. If the claimant exacerbates their damage through unreasonable conduct, they cannot claim that portion of the damage.

The burden of proof rests on the defendant to demonstrate that the claimant failed to mitigate their loss. Specific situations, such as impecuniosity, highlight instances where a claimant in a collision case may suffer additional loss due to financial constraints in mitigating damages. The Edison case provides an illustrative example where a dredger’s loss led to consequential financial challenges for the claimant. The House of Lords deliberated consequences following a wrongful act. may break the chain of causation. on the true measure of damage, emphasizing that the law cannot account for all The subsequent discussion cites

The Sivand case, drawing attention to the principles of causation and foreseeability. It underscores that the defendant is liable for the consequences of their wrongful act and distinguishes cases where intervening acts Comparisons are drawn between The Edison and The Sivand, questioning the fore seeability of a claimant’s contractual commitments and the necessity to hire equip ment due to the defendant’s wrongdoing.

The analysis suggests that the law should consider the need to hire equipment caused by the defendant’s fault, irrespective of the claimant’s lack of liquid funds. In conclusion, a careful examination of these legal principles is crucial, with a focus on the reasonableness of a claimant’s actions in mitigating loss and the foreseeabi lity of the consequences stemming from the defendant’s wrongful act.

• DAMAGES ASSESSMENT 7.1 FUNDAMENTAL PRINCIPLE: RESTORATION TO ORIGINAL STATE

The underlying principles governing the recovery of damages in collision cases adhere to the general tenets of damages in common law. The primary aim is to res tore the claimant to the same financial standing they would have occupied if not for the defendant’s breach of duty leading to the collision. This principle, known as ‘restitutio in integrum,’ entails the right to a comprehensive indemnity.

Dr. Lushington established this principle in The Clarence, emphasizing that a party suf fering damage in a collision is entitled, to the extent possible, to be placed in the same condition as if the injury had not occurred. Lord Porter, in Morrison Steamship Co Ltd v Greystoke Castle, further expounded that determining damages in tort involves assessing the foreseeable loss resulting from a wrongful act. In admiralty law, however, the restitutio in integrum principle encounters specific nuances.

Firstly, the defendant’s right to limit liability through a limitation fund unavoidably impacts the recoverable amount for various claimants, distributed either equally or according to court-established priorities. Secondly, the division of loss in damages considers the disparity between the damages incurred by the two colliding ships, with the more damaged vessel receiving compensation while the less damaged one may not. Any applicable limitation of liability is then applied to the remaining balance.

In collision cases, it’s common for the defendant to act as a claimant through a coun terclaim against the original claimant, especially when both parties share blame. The assessment of damages is determined by the registrar after the court establishes liability.

7.2. SHIP’S VALUE DETERMINATION

If the loss is foreseeable, the claimant is typically entitled to the market value of the ship at the time of the collision. In the absence of a market value, the claimant would be entitled to the ship’s value as a going concern to its owner, reflecting its worth from a business perspective. The case of The Harmonides illustrates a scenario where the court overruled damages awarded by the registrar, emphasizing the challenges of determining value when no market exists. The judge, Barnes J, asserted that, in such cases, the real test is the value to the owners as a going concern at the time of the vessel’s sinking.

7.3 LOSS OF A PROFITABLE CHARTERPARTY

Dr. Lushington, in The Columbus, discussed damage assessment when a ship is lost during a profitable charter. The court rejected additional claims for wages and lost profits, emphasizing the general principle of restitutio in integrum but acknowled ging the need for specific rules in its application. Subsequent decisions clarified that the loss of earnings under a charter should be considered in the assessment of damages, provided such sums are proven and not speculative. Conflicts arise regar ding whether the ship’s value should be the market value at the time of the collision or its value at the end of the voyage, considering lost earnings. Reconciliation sug gests that the time of collision is the optimal moment to assess the ship’s value as a going concern.

7.4 COLLISION DAMAGE AND REPAIRS

The shipowner is eligible for repair costs necessary to restore the vessel to a state substantially similar to its condition before the damage occurred. Acting as a pru dent uninsured party, the owner must mitigate losses. There is no deduction from the awarded sum based on new for old, and the wrongdoer must accept this. Repairs should be reasonably priced, satisfactory, and preferably permanent rather than temporary.

7.5 LOSS OF PROFIT

In cases where a chartered vessel requires repairs after a collision, the owner can claim the loss of freight or hire, minus already paid disbursements, considering wear and tear saved. Loss of use during repairs is claimable at a rate derived from the ave rage earnings over multiple charterparties. In a specific case involving the Aliartos and the Naxos, the court ruled on the reasonableness of the owner’s actions and the method for determining the loss of profit rate. The Hebridean Coast case involved a collision where the owners admitted liability. The dispute centered on the damages owed to The Lord Citrine.

The court determined damages based on interest on the capital value of the damaged vessel, not on the cost of carrying coal, emphasizing the need for a direct connection between the loss claimed and the damage suffered.

7.6 OUT OF POCKET EXPENSES AND FINANCIAL LOSS

Shipowners or demise charterers can recover immediate repair costs and other losses foreseeable after a collision, including financial loss. Financial loss covers loss of profit, survey costs, drydocking expenses, and out-of-pocket costs like salvage and towage services. However, pure economic loss is not included. Recovery of financial loss is contingent on proprietary or possessory rights in the damaged pro perty. The Mineral Transporter case exemplifies the limitations on recovering damages for pecuniary loss as a time charterer, emphasizing the need for proprietary or posses sory rights in the chartered vessel. The courts generally do not entertain claims for economic losses based solely on contractual rights.

7.7 DETENTION TIME AND DOCK CHARGES

When routine repairs coincide with collision repairs, the claimant can recover loss of use and dock charges for the detention period needed for collision repairs. Loss of use due to routine repairs not necessary but brought forward is also recoverable. The Admiralty Commissioners v SS Chekiang case clarified that combining collision and refitment repairs, even if the latter was not immediately necessary, does not reduce the wrongdoer’s liability for collision damages.

In The Haversham Grange case, the court discussed apportionment of expenses between owner and underwriter for simultaneous work on a vessel. The principle applied, making the wrongdoer liable for a proportion of drydocking and incidental expenses. The Carslogie case highlighted the importance of establishing a direct link between collision damage and detention time when claiming loss of use during repairs.

• TIME LIMITS FOR COMMENCEMENT OF CLAIMS

Specific timeframes apply in cases where two or more vessels are at fault. If a vessel collides with a non-ship, the limitation period is six years as outlined in the Limitation Act -LA 1980. Legal actions by cargo interests or for personal injury against the non-carrying vessel must be initiated within two years from the time the cause of action arose (Section 190 of the MSA 1995).

Claims for personal injury and loss of life against the carrying vessel must commence within three years, as per Navaro v Larrinanga. Under the Athens Convention 1974, Art 16 states that claims for damage resulting from the death or personal injury to a passenger or for the loss of or damage to luggage are time-barred after two years For personal injury, the commencement date is the date of disembarkation; for death, it is from the date the passenger should have disembarked or, if injured and died later, from the date of death, provided it does not exceed three years from the date of disembarkation. Regarding claims for loss of or damage to luggage, the com mencement date is the date of disembarkation or when disembarkation should have taken place, whichever is later. Other claims for damage to or loss of cargo carried on board the at-fault ship must be brought within the limitation period specified in their contract. The two-year time limit of Section 190 also applies to claims between vessels at fault for their respective damages from the collision.

Claims for contribution against the other ship at fault must be initiated within one year from the date of establishing liability to third parties or settling claims for loss of life or personal injury (Section 190(4) of the MSA 1995). Claims for contribution based on the CLCA 1978 can be brought within two years. Claims under the CLC for Oil Pollution Damage 1992 must be initiated no later than three years after the claim arose or six years after the occurrence resulting in the discharge or escape of oil (Section 162 of the MSA 1995).

• INSURANCE MATTERS AND RISKS ARISING FROM COLLISIONS

Damage to or loss of a ship caused by collision is covered by hull and machinery (H&M) insurance under perils of the sea, distinct from liabilities to third parties due to the fault of the colliding insured ship. Liabilities, such as damage to the other colliding ship, cargo, or any property on board, including freight earned on the voyage, are typically covered by third-party liability insurance. Personal injury or loss of life on board is also considered a third-party liability.

The liability of a vessel colliding with the insured vessel involves subrogation. When the insured vessel is lost or damaged, her insurers, having settled the claim, are subrogated to the rights of the assured against the colliding vessel to the extent of its liability. The Running Down Clause (RDC) in the Institute Clauses for H&M covers three-fourths of the proportionate liability of the assured, excluding cargo claims, loss of life or personal injury claims, or claims for liability to harbors, piers, etc., or for the removal of obstruction resulting from the collision.

Cargo underwriters cover loss or damage to the insured cargo on board a colliding ship under the Institute Cargo Clauses. Once a cargo claim is settled, the cargo insurer is subrogated to the rights of the assured cargo-owner against the non-carrying colliding ship to the extent of her proportionate fault. P&I mutual insurance covers the liabilities of the assured shipowner to third parties, including cargo claims, pollution liabilities, damage to harbors, piers, etc., and personal injury or loss of life claims.

These are excluded from the RDC clause. The P&I association also insures the remaining one-fourth of the insured’s liability under the RDC, including legal costs in defending such claims. Insurance operates as a contract of indemnity, meaning that once the insured has paid for the damage or loss to a third party, the insurer will indemnify the insured, subject to the terms of the insurance contract.

The collision liability clause makes the underwriters’ liability contingent not only on liability but also on payment by the assured. Under the ‘pay to be paid’ rule of P&I associations, the insured must pay the third party first to be indemnified.

This requirement can create difficulties under the Third Parties (Rights against Insurers) Act 1930 if the insured becomes insolvent before payment to the third party. After paying the assured, the insurer is entitled to pursue the rights of the assured against third parties through subrogation. Claim adjustments for collision damage are complex, involving either the ‘single’ liability method or the ‘cross’ liability method as outlined in the RDC.

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04 Lecture 4 AML COLLISION AT SEA AND LIABILITIES

04 Lecture 4 AML COLLISION AT SEA AND LIABILITIES