MARITIME LAW

Seamen's Personal Injuries

Anyone who has ever worked aboard a vessel knows that the marine environment is hazardous. Marine employment requires training, skill, and care. However, even the most careful and experienced seaman cannot always guard against equipment failure or the negligence of others.

If you are a member of a crew of a vessel, whether that vessel is a cargo ship, a ferry, a casino boat, a long-liner, a tug, a jack-up rig, a drilling ship, or any other means of carrying persons or freight across water, you could be a seaman who is entitled to the benefits that Congress and the General Maritime Law provide.

Seamen are not covered by any type of Workers Compensation statutes like those that exist for land-based workers. To compensate seamen and their families for a seaman's personal injuries or death, the Courts and Congress have developed a patchwork of remedies available to seamen who become sick or injured during their employment aboard vessels. Maintenance and Cure, the Jones Act, and the Unseaworthiness doctrine are laws and legal concepts that require specialized knowledge of maritime law.

Seamen can also obtain the protection of maritime law for illnesses developed after their employment for exposure to asbestos or hazardous chemicals.

Seamen's Wages:

Seamen aboard ships and other vessels earn wages that are protected by a maritime lien of the highest order. Typically, an owner is obligated to pay the seaman's wages upon completion of the voyage or within certain time frames thereafter. Often, due to financial situations, the owner will delay payment to the seaman despite his obligation to timely pay wages due. In some cases, this results in a penalty that is paid to the seaman by the vessel owner that compensates the seaman for the delay and augments the underlying wages that are due.

When seamen aboard foreign-flag vessels are in American ports, the penalty wage statute applies to them despite the flag their vessel may be flying. Often this particular type of seafarer is unfamiliar with the law and is somewhat hesitant to contact an attorney to assist him in protecting his valuable rights to the wages to which he is entitled. One organization that helps seafarers make contact with the appropriate attorneys to assist them is the ITF. Maritime Legal Resources works closely with the ITF and their network of attorneys to protect seafarersí right to prompt payment of wages in ports throughout the United States.

A seaman who is overdue for payment of wages earned aboard a vessel, regardless of flag, should contact Maritime Legal Resources to have his case evaluated. There is no time like the present because an owner who does not pay his sailors on time is often running into financial difficulties. With the passage of time, the financial difficulties increase. It then becomes more difficult to realize and satisfy the lien for wages as the value of the vessel is further eroded due to Collision and Wake Damage

Vessel Arrest and Maritime Liens

Members of the maritime community often find that a vessel owner or charterer refuses to pay for services or supplies provided to a vessel or has defaulted on a promissory note. The failure on the part of the vessel owner or charterer to pay for dockage, supplies, repairs, labor, materials, gas, oil, food, etc., results in the marina operator, marine supplier, vessel repairer, seaman, salvor, preferred ship mortgage holder, or other supplier having a maritime lien against a vessel. A maritime lien is an established maritime law principle, which is enforced by procedures unique to maritime law. The existence of the maritime lien permits the lien holder to have the vessel arrested or seized by the U.S. Marshal to enforce its lien. Due to the unique and complicated nature of enforcing maritime liens, maritime lien holders need the experience of Maritime Legal Resources when they have an unpaid maritime debt and need to assert their rights to collect upon it.

Charter Parties

The term "charter party" stands for the contract between the owner of a vessel and the charterer, that is the one that takes over the vessel for a certain amount of time or voyage. Three are the main types of charter:

1) The Voyage Charter. The charterer hires the vessel for a single voyage. The owner and his crew manage the vessel;
2) The Time Charter. Here the vessel is hired for a specific amount of time. The owner still manages the vessel but the charterer selects the ports of destination and controls the operation of the ship. It is a more permanent arrangement than the voyage charter and more representations are made about the ship to the charterer;
3) Demise or Bareboat Charters. This arrangement is completely different from the previous two. The charterer takes full control of the vessel along with the legal and financial responsibility for it. The demise shifts the control and possession of the vessel

General Average

A legal principle which traces its origins in ancient maritime law, general average is still part of the admiralty law of most countries. General average requires three elements which are clearly stated by Mr. Justice Grier in Barnard v. Adams:

"Ist. A common danger: a danger in which vessel, cargo and crew all participate; a danger imminent and apparently 'inevitable,' except by voluntarily incurring the loss of a portion of the whole to save the remainder.

"2nd. There must be a voluntary jettison, jactus, or casting away, of some portion of the joint concern for the purpose of avoiding this imminent peril, periculi imminentis evitandi causa, or, in other words, a transfer of the peril from the whole to a particular portion of the whole.

"3rd. This attempt to avoid the imminent common peril must be successful".

The first codification of the general average principle were the York-Antwerp Rules of 1890 which were supplemented and amended in 1924, in 1949 and in 1974. While the Rules never had the force of law, American commercial concerns seem to have accepted the 1949 version in its entirety and bills of lading incorporate them verbatim.
Rule I of the 1974 version provides that no jettison of cargo can be made good as general average, unless such cargo is carried in accordance with the recognized custom of the trade. It should be noted that damage done to the ship in accomplishing a jettison of cargo is a general average sacrifice as Rule II states: "Damage done to a ship and cargo, or either of them, by or in consequence of a sacrifice made for the common safety, and by water which goes down a ship's hatches opened or other opening made for the purpose of making a jettison for the common safety, shall be made good as general average."

Rule G clearly states that general average is to be adjusted as regards both loss and contribution on the basis of values at the time and place where the voyage ends.

Claims for general average can either be asserted in ordinary state courts or in admiralty. Most litigation on this subject, however, tends to be in the admiralty court.

Salvage

The formal requisites of an act of salvage, in a way similar to those required for general average, are the following:
1) there must be a serious peril from which the vessel or property could not have been rescued without the salvor's assistance;
2) the salvor's act must be voluntary (no legal or official duty to render assistance);
3) the act must be successful in saving all or part of the property at risk.

When the property has been abandoned, anyone may become a salvor and if the owner later wants to reclaim his property, he would take it subject to a lien for the salvage claim. The owner in possession of the property, however, does not have to accept an offer of salvage. While the typical act of salvage involves the rescue and tow of a vessel at sea, the range of situations which can constitute salvage is quite broad. Among examples of salvage are the following: the escorting of a distressed ship to a position where aid can be rendered; giving information on how to avoid an obstruction such as an ice floe or to avoid running aground; carrying a message which results in the provision of emergency assistance. In general, it can be said that, so long as a vessel is in danger, almost any voluntary act which contributes to its ultimate safety or rescue may qualify as an act of salvage.

As was noted earlier, certain tests must be met for an act to qualify for salvage. For property to become subject to salvage it must be on the water or on a beach or reef. It was also mentioned that since the act of salvage must be voluntary, a person who is under a duty to provide assistance cannot claim as a salvor. A crew member, for example, would not qualify under any circumstance. The same goes for passengers. Public employees such as firemen or even licensed pilots are not entitled to an award for saving property if it was their duty to do so. On the other hand, a salvage claim is not defeated by the fact that the salving vessel is professionally equipped to render assistance or engage in salvage operations. It should be noted that, while nothing prevents a government from claiming salvage,

The items taken into account in assessing the value of the property are the ship, freight and cargo. The salvage award can never be greater than the value of the salved property and will always be substantially lower except in the case of abandoned or derelict property. Where substantial values are involved, awards tend to be under 20% of the value of the property.

Salvage awards are for salvage of property, not life.The 1912 statute does not provide for awards for the pure salvage of life unaccompanied by salvage of property. Salvors of human life, however, who have taken part in the services rendered on the occasion of the accident giving rise to salvage, are entitled to a fair share of the remuneration awarded to the salvors of the ship, her cargo and accessories. In other words, the trial court will also consider moral as well as economic issues.

There are two types of salvage contracts. One is the agreement in extremis entered into by the master of a vessel in danger under the stress of circumstances. The second type can be entered into by the owner and a professional salvage team after the immediate peril has ceased. The in extremis agreement will be enforced only if the court finds that it has been fairly negotiated and not entered into under duress with the result of an extortionary bargain for the salvor. If the court finds that a form of extortion was attempted, it may reduce the award or forfeit it entirely.

A suit to enforce a maritime lien for salvage can be brought both in rem against the vessel or in personam against any person who may be liable. The trend for the resolution of salvage disputes, however, seems to be arbitration even if extrajudicial resolutions are not necessarily binding on crews of salving vessel.

Liens

A maritime lien is a very different concept from a consensual land lien. The maritime lien arises out of contract or tort. Only certain types of maritime claims can give rise to a lien and the parties cannot by agreement modify the status of a claim. The maritime lien can only be foreclosed, or "executed" in maritime parlance, by an admiralty court acting in rem. Priority among the same class of competing maritime liens is determined by the time of their attachment but in inverse order: last in time is first in right. The maritime lien is often referred to as "secret" or "hidden" because it depends neither on possession nor notice through filing (with the exception of the preferred ship mortgage which is statutory). It is also said to be "indelible" because since it can only be executed by an admiralty court acting in rem it is valid against the whole world, including a bona fide purchaser of the vessel without regard to even bankruptcy or reorganization.

As we have seen earlier, the demise charter places the ship in the custody and control of the charterer. The question then arises as to the effect on the ship of actions by the charterer which may or may not be authorized by the owner. The law seems to be settled on this point in that the ship itself is to be treated as a principal, and as personally liable for the negligence of anyone who is lawfully in possession of her.

a claim needs to be maritime in nature to give rise to a lien. This brings us back to the section on jurisdiction, i.e. what types of structures are deemed vessels, which contracts are maritime, which torts are maritime. Once again, it must be stated that it is not possible to provide an exhaustive list. A tentative rank of liens, however, can be the following:
1) Seamen's claims for wages. As Justice Gray wrote in the John G. Stevens, "sacred liens, and, so long as a plank of the ship remains, the sailor is entitled, against all other persons, to the proceeds as a security for his wages.";
2) Salvage;
3) Tort. This includes both collision and personal injury claims;
4) General Average. The lien can be in favor of the vessel against cargo or the other way around;
5) The preferred ship mortgage. As we have seen, lien status is given by statute;
6) Supplies and repairs;
7) Towage, wharfage, pilotage, stevedoring and related services;
8) Cargo damage caused by improper loading, stowage and custody;
9) Ship's claims against cargo for unpaid freight;
10) Charter party breach either by the owner or the charterer;
11) Claims for marine pollution.

Marine Insurance

The general principles of marine insurance are the same as with other types of insurance in that there are two parties: the assured and assurer (or carrier). The assured or insured agrees to pay a premium and the insurer agrees that, if certain losses or damage occurs to certain interests of the insured, the insurer will indemnify the insured. The similarities pretty much end here. The complex circumstances involved in sea voyages require very specific arrangements for the provision of marine insurance. The fixing of rates and special conditions, for example, requires a vast knowledge of the nature of vessels and cargos and of the conditions of navigation.

The marine policy may cover the risks of a single voyage, or may insure for a certain period of time. Cargo is almost always insured by voyage. Vessels are usually insured for a certain duration of time, usually year by the year. Cargo policies may be on a single lot or may be open to cover cargo as shipped by the insured. Hull insurance, or vessel insurance, may cover a ship or a whole fleet.

Typical of marine insurance is the principle that no contract of marine insurance is valid unless the insured has an insurable interest in the subject matter at the time of loss. The term insurable interest has been variously defined. According to the English Marine Insurance Act of 1906, "every person has an insurable interest who is interested in a marine adventure.... a person is interested in a marine adventure where he stands in any legal or equitable relation to the adventure or to any insurable property at risk therein, in consequence of which he may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss, or damage thereto, or by the detention thereof, or may incur liability in respect thereof".

Another issue important in the marine insurance area is misrepresentation or concealment. The marine insurance contract is one which requires the highest degree of good faith. Any misrepresentation of a fact which is material to the underwriter will void the policy. In addition, a policy can be void for breach of any of the warranties implied by law or expressed in the policy. The most common is the implied warranty of seaworthiness of the insured vessel or of the vessel carrying insured goods. Seaworthiness is a general term but is has been narrowed by case law. A ship which is seaworthy for a southern voyage may not be so for a transatlantic crossing in winter. Similarly, in cargo policies, the warranty of seaworthiness of the vessel includes fitness to carry a particular cargo.

In voyage policies, the doctrine of deviation states that the underwriter is deemed to have intended to accept only that risk that inheres in the expeditious prosecution of the voyage by the usual commercial route. If, without justification, the vessel departs from the route, or delays unreasonably in pursuing the voyage, the policy will be voided. Once voided by a deviation, the insurance contract is canceled for good and not restored by a return to the proper course. Whether or not a ship has deviated is a question which is either settled by the policy or by usage.

The main risks insured against in a marine policy are stated in the "perils" clause which is often supplemented by the "specially to cover" clauses, or restricted by provisions eliminating one or more of the insured risks.

More recently, war risks have been removed from ordinary marine policies and are covered by separate war risk policies. Ordinary marine policies no longer mean what they state and only cover those risks which are not excluded by the F.C. & S. (Free of capture and seizure) clause. Among the perils "of the seas" that are deemed to be covered under a marine policy are the extraordinary action of the wind and waves, collision, foundering, stranding, striking on rocks and icebergs. Not covered are ordinary wear and tear and losses which can be anticipated as regular incidents of sea carriage or navigation.

Hull policies, that is policies insuring ships, used to be quite specific as the risks they covered. Modern policies are written to cover most forms of liability. A "collision and running down" provision is contained in the standard hull policy to cover liability incurred for damage to another vessel or structure, and sometimes even personal injuries incurred. The protection and Indemnity policy covers against collision liability not covered by the "collision and running down" clause, as well as against all other liability exposure.

Under a marine policy a loss can be partial or total. Total losses can be actual or constructive. Actual total loss can be defined as the situation in which a ship or its goods can no longer arrive at their destination in specie. Actual total loss can also be found where the goods are so damaged in the course of the voyage that, while they still exist in specie at that time and can be sold where they are, there is no reasonable possibility that they can be transported to their destination without complete destruction or change. Constructive total loss is distinguished from actual total loss in that no formal abandonment need be made in respect of the actual total loss whereas the tender of abandonment is a prerequisite of a claim under constructive loss.

Most marine insurance policies are "agreed value" policies which means that the insured and the underwriter have already set a value for the insured vessel.

Limitation of Liability

An owner of a vessel is sometimes permitted to file for limitation of liability with regard to an event which may expose him to a claim or suit for damages. The institution of limitation of liability has its roots in medieval sea codes to encourage maritime activities and protect vessel owners at a time when corporate entities were not yet in existence. The institution, however, with some modifications, is still very much alive.

Normally, the vessel owner will institute limitation proceedings without admitting liability. He must do so within six months of the event or accident giving rise to the claims. He must also turn over to the court the ship or the equivalent value of it, whatever it might be after the event giving rise to the claims. Notice must also be given to the known claimants and is to be published. Once the limitation is in place, if the trial exonerates the vessel owner, he will owe nothing. If he is found at fault, he may be able to limit his liability to the value of the ship. A part owner of a vessel may limit his liability to his share in the vessel.

An additional bonus to vessel owners, and the subject of some controversy, is the insurance issue. An insurance company is apparently subrogated to the vessel owner and enjoys the same limitation of liability. If a yacht, following a maritime disaster, is worth $5,000 that would be the maximum the insurance would have to pay to the claimants if the limitation of liability is granted. On the other hand, because the hull insurance (which, as we have seen, is the portion of the policy which covers the vessel itself) does not go to the limitation fund, the vessel owner may collect the proceeds of such insurance, while the claimants are limited in their recovery to the value of the vessel.