Maritime Compliance Report
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Towing Vessel Operators Must Choose Wisely - Part 3
If you have read the first two parts of this series you understand that during litigation, when there is a violation of a Subchapter M regulation or TSMS policy or procedure, that the burden of proof may be shifted against you, or that it may be more difficult to use the defense of contributory negligence, but you may be thinking at least you can still limit your liability… maybe not.
The concept of limitation of liability under maritime law stems from a law passed in 1851 known as the Limitation of Shipowners Liability Act which was designed to protect U.S. shipping by allowing owners to limit their liability to the value of the vessel in instances where the company had no control. Today, many limitation of liability proceedings come down to whether the company had "privity or knowledge" of the circumstances which led to the incident in question. This becomes problematic when a company is operating under a safety management system such as the Towing Safety Management System (TSMS) under Subchapter M, where it could be argued that the intent of the regulations is to ensure that the company has "privity or knowledge" of almost all situations on the vessel at all times. Marc Hebert, in his previously referenced paper "Subchapter M from a Defense Lawyer's Perspective," writes, "In our opinion Subchapter M, particularly through a TSMS option, essentially requires that vessel owners/operators make themselves aware, through the implementation of a safety management system, of the daily minutia on each and every vessel. It may be argued that, by statute, your knowledge is mandated."
We have recently seen an example play out in the courts in the unfortunate case of the duck boat being run over by the tug and barge near Philadelphia, which resulted in two deaths. The mate on watch at the time of the incident, who is currently serving a one-year sentence for involuntary manslaughter, according to the Philadelphia Inquirer, May 7, 2012, was on his cell phone handling a family emergency. The towing company attempted to limit its liability due to the fact that it had a cell phone policy, but argued that the mate had simply disobeyed the policy. However, according to the Workboat.com blog by Dale DuPont on May 14, 2012, the plaintiff attorney successfully argued that, "… the policy never worked, not once, not with a single person on this voyage, ever. Every single one of them used their cell phone on watch every single day. That is the definition of a failed policy." According to DuPont's blog post, two days later the sides in a trial that was expected to last for months, agreed to a $17 million dollar settlement for the victims and their families.
The concept of limitation of liability under maritime law stems from a law passed in 1851 known as the Limitation of Shipowners Liability Act which was designed to protect U.S. shipping by allowing owners to limit their liability to the value of the vessel in instances where the company had no control. Today, many limitation of liability proceedings come down to whether the company had "privity or knowledge" of the circumstances which led to the incident in question. This becomes problematic when a company is operating under a safety management system such as the Towing Safety Management System (TSMS) under Subchapter M, where it could be argued that the intent of the regulations is to ensure that the company has "privity or knowledge" of almost all situations on the vessel at all times. Marc Hebert, in his previously referenced paper "Subchapter M from a Defense Lawyer's Perspective," writes, "In our opinion Subchapter M, particularly through a TSMS option, essentially requires that vessel owners/operators make themselves aware, through the implementation of a safety management system, of the daily minutia on each and every vessel. It may be argued that, by statute, your knowledge is mandated."
We have recently seen an example play out in the courts in the unfortunate case of the duck boat being run over by the tug and barge near Philadelphia, which resulted in two deaths. The mate on watch at the time of the incident, who is currently serving a one-year sentence for involuntary manslaughter, according to the Philadelphia Inquirer, May 7, 2012, was on his cell phone handling a family emergency. The towing company attempted to limit its liability due to the fact that it had a cell phone policy, but argued that the mate had simply disobeyed the policy. However, according to the Workboat.com blog by Dale DuPont on May 14, 2012, the plaintiff attorney successfully argued that, "… the policy never worked, not once, not with a single person on this voyage, ever. Every single one of them used their cell phone on watch every single day. That is the definition of a failed policy." According to DuPont's blog post, two days later the sides in a trial that was expected to last for months, agreed to a $17 million dollar settlement for the victims and their families.
Choosing the TSMS option and establishing written policies and procedures, which must be followed, increases that probability that vessel operators will not be able to limit their liability as easily as those who do not choose the TSMS. Marc Hebert in his paper asks the question "… with Subchapter M, will the Limitation Act continue to be of use to the inland towing vessel owner?" Stay tuned for more…
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