Passenger Ship

There was, initially, some opposition to these proposed changes principally from the International Group of P & I Clubs.  The International Group had two basic objections.  First, the Group pointed out that most passenger ship operators already carried P&I cover which ensured that legitimate passenger claims were paid subject to the relevant limitation regime.  Secondly the Group protested that granting a right of direct action against liability underwriters violated the indemnity principle which is the basis of all liability insurance.  In other words the liability insurer does not insure the passenger claimant direct but, by the terms of the insurance policy, agrees to indemnify the shipowner against any passenger claims which he may have to pay (and has paid).  In the event the International Group did not press its opposition to the proposed changes recognising that there is a general concern that passengers are not properly protected and that the principle of indemnity had already been lost in other international maritime law conventions such as the CLC 1969 where, for the first time, claimants were given a direct right of action against liability insurers. As is mentioned earlier in this paper the whole exercise began at the 74th Session of the IMO Legal Committee in October 1996, 4 years on, it is worth seeing where IMO now stands with this project. It might be thought that a Protocol to increase limits, require the shipowner to carry liability insurance and to give claimants direct access to insurers would not be a complex matter.  However at an early stage in discussions it was suggested (by Japan) that the opportunity should be taken of reviewing the liability provisions of the Athens Convention.  Briefly the position, as regards liability under the 1974 Convention, is that the shipowner is liable for death or personal injury to a passenger if the incident causing the death or personal injury occurs during the course of the voyage and is due to the negligence of the carrier or his servants.  However, the Convention also provides that if the death or personal injury occurs as a result of a maritime incident (shipwreck, collision, stranding, explosion or fire or defect in the ship) there is a presumption that the carrier or his servants have been negligent.  This is only a presumption and the shipowner escapes liability if he can prove that the incident occurred without his negligence or that of his servants.  This has been referred to as a “semi-strict” liability regime.