Category: Collisions

AI and Civil Liability. The EU Commission’s proposed AI Liability Directive.

 Over the past three years the EU has become involved in developing legislation to deal with the operation of Artificial Intelligence (AI) in the Union. There are three strands to this legislation: the overall regulatory AI Act; the updating of the 1986 Product Liability Directive; addressing civil liability arising out of the operation of AI systems.   On 22 October 2020 the European Parliament sent a draft regulation to the Commission for a new strict liability regime for operators of AI systems. The Parliament’s proposal was followed on 28 September 2022 by the European Commission’s proposal for the AI Liability Directive along with a proposed updating of the 1986 Product Liability Directive. This blog pointed out that the proposed Regulation could lead to a confusing overlap with maritime strict liability regimes in the context of vessels at MASS 3 and 4.

Unlike the Parliament’s proposal of October 2020, the Commission’s proposal is framed as a Directive, and contains no substantive rules regarding liability arising out of use of an AI system.   Instead, the proposed Directive applies to non-contractual fault-based civil law claims for damages, in cases where the damage caused by an AI system occurs after the end of the transposition period, but the Directive lays down two sets of common rules.

First, Article 3 deals with the disclosure of evidence on high-risk artificial intelligence (AI) systems to enable a claimant to substantiate a non-contractual fault-based civil law claim for damages. 

Second, Article 4 deals with the burden of proof in establishing causality in non-contractual fault-based civil law claims brought before national courts for damages caused by an AI system. For the presumption of causality to apply, the fault of the defendant should be established as a human act or omission which does not meet a duty of care under Union law or national law that is directly intended to protect against the damage that occurred.  It should also be necessary to establish that it can be considered reasonably likely, based on the circumstances of the case, that the fault has influenced the output produced by the AI system or the failure of the AI system to produce an output and the claimant should still be required to prove that the output or failure to produce an output gave rise to the damage.

However, fault still has to be proved under the applicable Union or national laws, although fault can be established in respect of non-compliance with Union rules which specifically regulate high-risk AI systems. It is likely that in the future such rules will apply to vessels at MASS 3 and 4 for entry into ports and the territorial sea of Member States. The Directive does not affect rules of Union law regulating conditions of liability in the field of transport. With maritime transport the only such rules of Union law concerning fault based civil law claims would be Directive 2009/20/EC on the insurance of shipowners for maritime claims.  

Art 5  provides for the Commission to submit a report to the Parliament, the Council, and the Economic and Social Committee, assessing the Directive’s achievement five years after its transposition.  In particular, that review should examine whether there is a need to create no-fault liability rules for claims against the operator combined with a mandatory insurance for the operation of certain AI systems, as suggested by the European Parliament resolution of 20 October 2020 on a civil liability regime for artificial intelligence.  

The restriction to fault-based liability regimes means that, in relation to MASS 3 and 4 vessels operating with the territory of the Union, the proposed Directive will have no application to the two current strict liability pollution regimes, the CLC and the Bunkers Convention, and will have no application to the HNS regime when it eventually comes into force. It will, though, have application in the Member States to fault based tort claims such as general pollution claims and collision claims, as regards the rebuttable presumption of a causal link in the case of fault provided for in Art 4, and almost certainly as regards the evidential provisions in Art 3 if MASS 3 and 4 vessels are eventually classified as ‘high risk’.  

The proposed Directive now has to go back to the Parliament and the Council, and may well be subject to amendment. The European Economic and Social Committee (EESC) adopted an opinion on the proposal on 25 January 2023 broadly welcoming the proposal but insisting  upon clear legal definitions, calling upon the Commission to closely monitor the development of financial guarantees or insurance covering AI liability and recommending the Directive be reviewed three years after entry into force.

Excluded wreck removal claims under art 2(d) LLMC in Hong Kong. No limitation of liability through the back door.

In Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd (The Star Centurion and The Antea) – [2022] HKCA 1089 a collision occurred between the “Antea” and the “Star Centurion”, a vessel at anchor in Indonesian waters. The Star Centurion sank and the authorities issued a wreck removal order. The claimant, the owner of the “Antea”, established a limitation fund in Hong Kong and paid HK$175,062,000 into court. The wreck removal claims were HK$139 million and growing.

The claimant issued a summons seeking a declaration that that part of the defendant’s claim for damages, in respect of the raising, removal, destruction or the rendering harmless of the  “Star Centurion” was subject to limitation under article 2 of the 1976 Convention and under the limitation fund constituted by the claimant. Article 2 (d) of LLMC specifically covers wreck removal claims but Article 18(1) allows a contracting party to disapply it through a reservation. The UK has made such a reservation, and so has Hong Kong.

The claimant argued that the wreck removal claims could be limited as they fell within art 2(1)(a) “claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works, basins and waterways and aids to navigation), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom”; and also 2(1)(c) “claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations;”

The Hong Kong Court of Appeal has recently upheld the first instance decision [2021] HKCFI 396 that the wreck removal claims were excluded from limitation by virtue of the reservation in respect of article 2(d). Claims under this head encompassed direct claims by statutory authorities, whether under statute or at common law, and private recourse claims by shipowners for consequential loss or damage to property or resulting from the infringement of rights. There could be no “partial reservation” under article 18(1) in excluding the application of article 2(1)(d) only as regards claims by waterway authorities and not to recourse claims by shipowners. Although wreck removal claims fell within articles 2(1)(a) and (c), general provisions should give way to the specific terms of article 2(1)(d) where the claim was for wreck removal costs.

The Hong Kong Court of Appeal in reaching this conclusion referred to majority obiter dicta of the Full Court of Queensland in The Tiruna and Pelorus [1987] 2 Lloyd’s Rep 666 and to the decision of the Supreme Court of the Netherland in  Shipping Co MS Amasus BV v ELG Haneil Trading GmbH. It is likely that a UK court would come to the same decision.

Collision litigation and the ASG forms: if you’re offered proper security, take it and don’t argue.

A nice little ship collision decision from the Court of Appeal this morning.

Suppose you’re a collision defendant, and the claimant has nabbed one of your other ships in port elsewhere. You want your vessel back and agree collision jurisdiction in England under ASG1 and ASG2. Relying on ASG2 (“Each party will provide security in respect of the other’s claim in a form reasonably satisfactory to the other”), you put up reasonable security from your P&I Club. Straightforward? Er … not quite. The other guy sucks on his teeth, says that even if your security is reasonable he doesn’t like it, and on second thoughts he prefers to say “thanks but no thanks” and hold on to your ship instead. You’d be miffed, wouldn’t you?

That was essentially what happened in M/V Pacific Pearl Co Ltd v Osios David Shipping Inc [2022] EWCA Civ 798. After the ASG1 / ASG2 agreement had been signed, collision defendants Pacific Pearl put up security to obtain the release of another vessel of their then languishing under arrest in South Africa. But to their dismay, collision claimants Osios David refused it on the (now admittedly bad) ground that it contained a sanctions clause. Put to sizeable expense as a result of their declining to lift the arrest, Pacific Pearl sued them for damages for breach of contract.

Sir Nigel Teare, having held the security good, slightly surprised the profession by going on to decide that even if it was it made no difference. The ASG2 obliged both sides to offer reasonable security, but said nothing about any obligation on either side to accept it; from which it followed that Osios David had been entirely within its rights to say it preferred to maintain the arrest after all. He therefore dismissed the action: see M/V Pacific Pearl Co. Ltd v Osios David Shipping Inc. [2021] EWHC 2808 (Comm).

This decision has now been reversed by the Court of Appeal, which read the ASG2 undertaking as requiring reasonable security to be both provided and, once tendered, taken up. This was, said Males LJ, implicit in the nature of the ASG1/ASG2 procedure. In place of a collision being litigated potentially worldwide, with arrest being threatened almost anywhere and the rights and wrongs of such arrests being thrashed out wherever they happened to take place, the whole matter should be dealt with by sober argument in London. In short, the whole object of the ASG2 undertaking attached to ASG1 was that such proceedings should, if at all possible, replace arrest rather than leaving it up o a claimant’s discretion.

Alternatively, he would also have been prepared to read the ASG2 undertaking to offer security as comporting, even if it did not say so explicitly, an implied obligation in the offeree to accept it. It did not matter which line one took: in either case, Osios David was in breach of contract and thus liable in damages.

This blog is loath ever to disagree with Sir Nigel Teare. But in this instance, it is our view that the Court of Appeal must be right. This both for the reasons given by Males LJ, and also because, in an era where it is almost invariably envisaged that insurers – whether P&I or H&M or both – will argue the toss over collisions and pick up the eventual tab, arrest should be seen very much as a last resort. Ships are better employed sailing the seven seas earning freight than being used as pawns in expensive transnational litigation; in so far as this decision will in future make this more likely to happen, we welcome it.

Dock brief

In July last year we noted the holding of Teare J that Holyhead Marina came within the dock-owner’s right to limit liability under s.191 of the Merchant Shipping Act 1995. The issue arose because the Marina faced multiple claims from yacht owners following devastation wrought by Storm Emma in 2018.

We approved then, and are happy to say that the Court of Appeal does now. Today in Holyhead Marina v Farrer [2021] EWCA Civ 1585 it confirmed Teare J’s conclusion that while not a dock, the Marina was a landing place, jetty or stage (which are included in the definition of places entitled to limit), and that there was no reason whatever to limit the entitlement to purely commercial port facilities. ‘Nuff said. Marina owners can breathe a sigh of relief, while hull insurers no doubt will mull putting up rates yet again on yachts to mark the loss of another source of subrogation rights.

“EVER SMART” collision with “ALEXANDRA 1”: The Crossing and Narrow Channel Rules

MAIB Investigation Report: Collision Between Tanker and Containership Off Jebel Ali – gCaptain

On 19 February 2021 the Supreme Court delivered a seminal judgment in the first appeal in a collision to come before the highest court since the mid 1970s and overturned the decisions of both Mr Justice Teare [2017] 1 Ll.R. 66 and of the Court of Appeal [2019] 1 Ll.R. 130.   

On 11 February 2015 the outbound Ever Smart, a large container ship, collided with the inbound Alexandra 1, a VLCC, within the pilot boarding area, just outside the dredged entrance/exit channel to the port of Jebel Ali. The appeal concerned two questions relating to the application of the “crossing rules” as set out in rules 15 – 17 of the International Regulations for Preventing Collisions at Sea 1972. The Supreme Court emphasised that the Collision Regulations must be capable of implementation by all vessels as defined in the Rules, irrespective of their technological capabilities [72].

The Questions on the Appeal

The first question for determination was whether the crossing rules are inapplicable or are to be disapplied where an outbound vessel (Ever Smart) is navigating within a narrow channel and has a vessel (Alexandra 1) on a crossing course approaching the narrow channel with the intention of and in preparation for entering it. This question concerned the inter-relationship between the crossing rules and the “narrow channel rules” (rule 9).

The second question was whether it is necessary for the putative give-way vessel to be on a steady course for the crossing rules to be engaged. The “putative give-way vessel” is the vessel which, if the crossing rules apply, would be required by rule 15 to keep out of the way of the other vessel. In practical terms it is the vessel which has the “putative stand-on vessel” on her starboard side.

Both Teare J. and the Court of Appeal answered both questions “yes” with the consequence that the crossing rules were either not engaged at all or, if engaged, were overridden by the narrow channel rules. Teare J. apportioned liability 80% (Ever Smart) and 20% (Alexandra 1) and this was upheld by the Court of Appeal.

The decision of the Supreme Court

The Supreme Court disagreed.  Before addressing the two questions the Supreme Court emphasised the international character of the Collision Regulations and their application to “mariners of all nationalities, of all types (professional and amateur), in a wide range of vessels and in worldwide waters”: see [37] – [45]. In this regard the Supreme Court referred to the well-known statement of Lord Wright in The Alcoa Rambler [1949] AC 236 (PC) at p 250 that “wherever possible” the crossing rules “ought to be applied and strictly enforced because they tend to secure safe navigation”. See also Atkin LJ in The Ulrikka (1922) 13 Ll.L.Rep 367 at 368. At [46] –  [74] the Supreme Court carried out a detailed analysis of the context and purpose of the crossing rules, addressing the meaning of “heading”, “course” and “bearing” and emphasising the existence of a risk of collision when two vessels are approaching each other on a more or less steady bearing: see rule 7(d)(i).

The Supreme Court also considered the effect of rule 2(a) and (b). Rule 2(a) had been heavily relied upon by the Alexandra 1 interests for the dis-application of the crossing rule but this argument was rejected as “misconceived”: [66]. In essence the Supreme Court held that:

a.    The crossing rules were of such importance in the context of collision avoidance that “they should not lightly be treated as inapplicable” [68].

b.    Any tension between the obligation of the stand-on vessel to keep her course and speed and to comply with another rule should “be resolved by treating the stand-on obligation as moulded for the purpose of permitting compliance with the other rule” [69]. Teare J. and the Court of Appeal had erred in treating the rules as inconsistent either generally (Teare J.) or on the particular facts (the Court of Appeal).

c.    Any ouster of one rule must be limited to the minimum strictly necessary to avoid danger and uncertainty: [70].

The Second Question

The Supreme Court first addressed the second question and held that neither the give-way vessel nor the stand-on vessel had to be on a steady course for the crossing rules to be engaged: [75] – [115].   In essence the Supreme Court held that two crossing vessels may be approaching each other and remain on a steady bearing, (with consequent risk of collision) without either vessel being on a steady course.  

“ …. if two vessels, both moving over the ground, are crossing so as to involve risk of collision, the engagement of the crossing rules is not dependent upon the give-way vessel being on a steady course. If it is reasonably apparent to those navigating the two vessels that they are approaching each other on a steady bearing (over time) which is other than head-on, then they are indeed both crossing, and crossing so as to involve a risk of collision, even if the give-way vessel is on an erratic course. In such a case, unless the overtaking rule applies, the crossing rules will apply.” [111]

Although it was in issue on the facts, the Supreme Court also considered that the stand-on vessel need not be on a steady course for the engagement of the crossing rules [112] – [114].

The Supreme Court concluded that, subject to the first question, the crossing rules were engaged even though “ALEXANDRA 1 was not on a steady course, or speed” [115].

The First Question

The Supreme Court identified a number of relevant factual situations where the inter-relationship between the crossing and narrow channel rules needed to be considered.  The Supreme Court sought “to determine with clarity and as precisely as possible” [124] the circumstances in which the crossing and narrow channel rules would apply in the vicinity of the entrance to a channel

Three broad groups of cases were identified [134]:

“Group 1 are vessels which are approaching the entrance of the channel, heading across it, on a route between start and finishing points unconnected with the narrow channel. They are approaching the entrance of the channel, but not intending or preparing to enter it at all. Group 2 are vessels which are intending to enter, and on their final approach to the entrance, adjusting their course to arrive at their starboard side of it. ….. Group 3 are approaching vessels which are also intending and preparing to enter, but are waiting to enter rather than entering …. ”

The crossing rules would clearly apply in a Group 1 case. The crossing rules would not apply in relation to Group 2 “because the approaching vessel is both preparing and intending to enter it, and already shaping (ie adjusting her course and speed to do so), on her final approach”. The decisions in The Kaiser Wilhelm Der Grosse [1907] P 36 and 259, The Canberra Star [1962] 1 Lloyd’s Rep 24 and Kulemesin v HKSAR [2013] 16 HKCFA 195 fell within Group 2.  

However the present case fell with Group 3 because Alexandra 1 had not yet shaped to enter the narrow channel on her final approach. The Supreme Court held that the crossing rules should continue to apply to a “Group 3 waiting vessel, or any vessel approaching the channel intending to enter it, which has yet to shape her course to enter it on her starboard side of it” [138].  Further there were no reason why the outbound vessel could not comply both with the crossing and narrow channels: [139] – [140]. 

At [145] the Supreme Court concluded on the first question as follows:

“Where an outbound vessel in a narrow channel is crossing with an approaching vessel so as to involve a risk of collision, the crossing rules are not overridden by the narrow channel rules merely because the approaching vessel is intending and preparing to enter the narrow channel. The crossing rules are only overridden if and when the approaching vessel is shaping to enter, adjusting her course so as to reach the entrance on her starboard side of it, on her final approach.”

Apportionment will now be re-determined by Sir Nigel Teare on the basis that the crossing rules applied from about C-23 and that the Alexandra 1 was the give-way vessel.

Simon Rainey QC and Nigel Jacobs QC represented the successful Ever Smart Interests. They were instructed by Ince Gordon Dadds LLP (Christian Dwyer, Sophie Henniker-Major and James Drummond) in consultation with Stann Law Limited (Faz Peermohamed).

Supreme Court overrules Court of Appeal on interaction of crossing and narrow channel rules in COLREGs.

 Evergreen Marine (UK) Limited (Appellant) v Nautical Challenge Ltd (Respondent)

[2021] UKSC 6

On 11 February 2015, the appellant’s large container vessel, Ever Smart, and the respondent’s VLCC (very large crude carrier), Alexandra 1, collided at sea at night just outside the entrance/exit channel to the port of Jebel Ali in the United Arab Emirates.

Ever Smart was outbound from Jebel Ali and had been navigating along the channel at a speed over the ground of 12.4 knots at the time of the collision. Alexandra 1 was inbound to Jebel Ali but had not entered the channel as she was waiting in the pilot boarding area to pick up a pilot, and was moving over the ground very slowly, approaching the channel at a speed over the ground of 2.4 knots, but with a varying course. Visibility was good enough for the vessels to have seen each other from about 23 minutes before the collision. For the whole of that period, the two vessels were approaching each other on a steady bearing.

The High Court held Ever Smart 80% liable for the damage caused by the collision and Alexandra 1 20% liable. The Court of Appeal agreed on both issues and on apportionment. Two issues arose on appeal.

1. The interplay between the narrow channel rules and the crossing rules.

2. Whether the crossing rules only engaged if the putative give-way vessel is on a steady course.

The Supreme Court in which Lords Briggs and Hamblen gave the judgment, addressed the second issue first.

The Supreme Court held that there was no ‘steady course’ requirement. In The Alcoa Rambler the Privy Council had held that the crossing rules did not apply because the putative give-way vessel (the vessel which would be required to keep out of the way if the crossing rules applied) could not determine that she was on a steadily crossing course with the putative stand-on vessel, as that vessel was concealed behind other anchored vessels until the last moment before the collision. Importantly, there was no opportunity for the putative give-way vessel to take bearings of the putative stand-on vessel. In the present case Alexandra 1 had been approaching Ever Smart on a steady bearing for over 20 minutes before the collision, on a crossing course, enough to engage the crossing rules even though she was not on a steady course. For the same reasons the stand-on vessel need not be on a steady course to engage the crossing rules either.

On the first issue, the  interplay between the narrow channel rules and the crossing rules, at first instance and in the Court of Appeal it had been  held that the narrow channel rules displaced the crossing rules, relying on The Canberra Star [1962] 1 Lloyd’s Rep 24 and Kulemesin v HKSAR [2013] 16 HKCFA 195. However, the Supreme Court noted that these cases concerned a vessel intending to enter and on her final approach to the entrance, shaping her course to arrive at the starboard side of it. They did not apply where the approaching vessel was waiting to enter rather than entering. The crossing rules should not be overridden in the absence of express stipulation, unless there was a compelling necessity to do so.

Here, Alexandra 1 was the approaching vessel, intending and preparing to enter the channel but, crucially, waiting for her pilot rather than shaping her course for the starboard side of the channel, on her final approach. Accordingly, there was no necessity for the crossing rules to be overridden as the narrow channel had not yet dictated the navigation of the approaching vessel.

That vessel could comply with its obligations under the crossing rules, whether it was the give-way vessel or the stand-on vessel. Nor did the crossing rules need to be displaced as regards the vessel leaving the channel. The crossing rules were only displaced when the approaching vessel was shaping to enter the channel, adjusting her course so as to reach the entrance on her starboard side of it, on her final approach. Here, the crossing rules applied and Alexandra 1, as the give-way vessel, was obliged to take early and substantial action to keep well clear of Ever Smart.

The Supreme Court unanimously allowed the appeal. Apportionment of liability would be redetermined by the High Court.

His last bow. As Teare(s) go by.

On 5 October 2020, Sir Nigel Teare gave his last judgment in the Admiralty Court, in a three handed collision case involving a pile up of three laden bulk carrier vessels in the Suez Canal in 2018. The Panamax Alexander (PA) was the final vessel in an eight vessel southbound convoy that halted some two hours after the initial convoy vessel suffered an engine breakdown and blocked the canal. The other vessels had to take emergency anchoring and/or mooring action. The sixth and seventh vessels managed to do this. About fifteen minutes later PA collided with the first of these, the Sakizaya Kalan (SK) which led to PA and SK drifting downstream and colliding with the Osios David (OD), over an hour after the initial collision. For a few minutes all three vessels were locked together and a further two sets of collisions took place.

PA was held 100% to blame in failing to appreciate that there was a risk of collision and, not mooring earlier to avoid that risk of collision. These were causative breaches of Rules 5, 7 and 8 of the International Collision Regulations (Colregs).

Although OD was at fault in that she had failed to inform SK and PA behind of her intention to moor, that fault had no causative potency as the duty to inform was owed mainly to the vessel immediately behind, which had already stopped before the first collision. Were the subsequent collisions caused by the initial collision for which PA was wholly to blame? Teare J stated:

“That question of causation depends upon whether the effect of the first collision was continuing in such a way as not merely to provide the opportunity for the later collisions but as to constitute the cause of them. The courts have answered questions of this nature (which usually arise where there has been intervening negligence) by the use of metaphors. Was the hand of negligent navigator on board PA still heavy on SK and OD at the time of the later collisions? Were those on board SK and OD not free agents by reason of the hard necessities imposed on them by the first collision? Were those on board SK and OD still in the grip of the first collision? These metaphors and their source are described by Brandon J. in The Calliope at p.101. Such questions are to be approached in a broad common sense way; see p. 102.[298].”

Teare J concluded that the initial collision “not merely provided the opportunity for the later collisions but constituted the cause of” those subsequent collisions, even though they took place over an hour after that and recognized the difficulties faced by the master of SK and of OD on the horns of a dilemma created by the fault of PA. Accordingly, PA was found wholly responsible and liable for all the collisions.   

IISTL Member (Simon Rainey QC) Has Argued in Historical Collision Case

Evergreen Marine (UK) Limited (Appellant) v Nautical Challenge Ltd (Respondent)

This is the first collision case to reach the highest court on land since 1976. This appeal concerns the International Regulations for Preventing Collisions at Sea 1972, as amended (“the Collision Regulations”). The issues in the appeal are:

(1) The proper construction of the Collision Regulations. In particular whether the crossing rules are inapplicable, or whether they should they be disapplied where an outbound vessel is navigating within a narrow channel and has a vessel on her port (or starboard) bow on a crossing course approaching a narrow channel with the intention of and in preparation for entering it.

(2) On the proper construction of the Collision Regulations, in determining whether the crossing rules are applicable, whether there is a requirement for the putative give-way vessel to be on a steady course before the crossing rules can be engaged.

Facts

This appeal concerns a collision at sea between the appellant’s vessel (“EVER SMART”) and the respondent’s vessel (“ALEXANDRA 1”). The collision took place on 11 February 2015 just outside the dredged channel by which vessels enter and exit the port of Jebel Ali in the United Arab Emirates. ALEXANDRA 1 was inbound; EVER SMART was outward bound. The damage suffered by ALEXANDRA 1 amounted to over US$9.3 million and the damage suffered by EVER SMART amounted to over US$2.5 million.

The Admiralty Court determined that the appellant’s vessel, EVER SMART, should bear 80% of the liability for the collision and the respondent’s vessel, ALEXANDRA 1, should bear 20%. The judge held that the crossing rules (Rules 15-17 of the Collision Regulations) did not apply and therefore that ALEXANDRA 1 did not navigate in breach of Rule 16, the crossing rule which was said by the appellant to have applied to the ALEXANDRA 1. The Court of Appeal dismissed the Appellant’s appeal [2018] EWCA Civ 2173. The Appellant now appeals to the Supreme Court.

Damage to Alexandra 1’s bow

Who is an “operator” under OPA 1990? Dumb barges and dumb tug.

 

Who is an “operator” under OPA 1990? Dumb barges and dumb tug.

 

In January 2013, a tugboat owned by Nature’s Way was moving two oil-carrying barges owned by Third Coast Towing down the Mississippi River. The barges were “dumb” barges lacking the ability for self-propulsion or navigation. The barges collided with a bridge, resulting in one of the barges discharging over 7,000 gallons of oil into the Mississippi. Nature’s Way and its insurer, and Third Coast Towing and its insurer were all designated by the Coast Guard as “responsible parties” under the 1990 Oil Pollution Act (‘OPA’). Nature’s Way subsequently spent over $2.99 million on the clean-up, and various governmental entities spent over an additional $792,000. In May 2015, Nature’s Way submitted a claim to the National Pollution Funds Center (NPFC) seeking reimbursement of over $2.13 million on the grounds that its liability should be limited by the tonnage of the tugboat and not the tonnage of the barges and also claiming relief from any obligation to reimburse the government for the additional $792,000-plus. Those claims were denied by the NPFC based upon its determination that Nature’s Way was an “operator” of the oil-discharging barge at the time of the collision.

 

The District Court held that Nature’s Way was an “operator” and its decision has been upheld by the Court of Appeals for the Fifth Circuit in US v Nature’s Way 21 Sept 2018. Case: 17-60698. OPA does not define the term “operator” but the Supreme Court in United States v. Bestfoods, 524 U.S. 51, 66 (1998) analysed the definition of the term in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as follows:

In a mechanical sense, to “operate” ordinarily means “[t]o control the functioning of; run: operate a sewing machine.” American Heritage Dictionary 1268 (3d ed. 1992); see also Webster’s New International Dictionary 1707 (2d ed. 1958) (“to work; as, to operate a machine”). And in the organizational sense more obviously intended by CERCLA, the word ordinarily means “[t]o conduct the affairs of; manage: operate a business.”

 

Applying that analysis, the ordinary and natural meaning of an “operator” of a vessel under the OPA would include someone who directs, manages, or conducts the affairs of the vessel, and would thereby include the act of piloting or moving the vessel. Nature’s Way undisputedly had exclusive navigational control over the barge at the time of the collision, and, as such, it was a party whose direction (or lack thereof) caused the barge to collide with the bridge. It was, therefore, “operating” the barge at the time of the collision based on the ordinary and natural meaning of the term.

 

The Fifth Circuit rejected Nature’s Way’s argument that its conduct in moving the barge was more akin to the “mere mechanical activation of pumps,” and it could not be deemed to have been “operating” the barge because it was merely moving the barge as per Third Coast’s directions, and it did not exercise control over its environmental affairs or inspections.

Nature’s Way directed precisely the activity that caused the pollution—it literally was the party that crashed the barge into the bridge. It was clearly “operating” the barge at the time of the collision and therefore constituted a “responsible party” under OPA.

 

Court of Appeal decision on crossing rule and causative potency in collision.

In Evergreen Marine (UK) Ltd v Nautical Challenge Ltd [2018] EWCA Civ 2173, we have the first Court of Appeal decision on collision liability since Bow Spring v Manzanillo II [2004] EWCA Civ 1007; [2005] 1 WLR 144, in 2004.

On the 11th February, 2015 the  “Alexandra I” and the “Ever Smart” collided just outside the dredged channel by which vessels enter and exit the port of Jebel Ali…” At first instance Teare J held that the crossing rules did not apply, so that when ‘Alexandra 1’ the inbound vessel approached the dredged channel (“the narrow channel”), she was not under a duty to keep out of the way of ‘Ever Smart’, the outbound vessel.  Instead, the navigation of the two vessels was governed by the narrow channel rule, rule 9 of the Collision Regulations, in the case of ‘Ever Smart’ and rule 2 of the Collision Regulations, the ordinary practice of seamen (i.e., the requirement of good seamanship), in the case of ‘Alexandra 1’ .   Furthermore, the crossing rule was inapplicable because ‘Alexandra 1’ was not on a sufficiently constant direction or heading to be on a course; she was waiting to embark a pilot rather than herself being on a course at the relevant time.

Teare J found both vessels to have been at fault and in apportioning liability had regard to the relative culpability and causative potency of each vessel’s faults.  Those of ‘Ever Smart’ were very serious in terms of culpability. ‘Alexandra 1’ ’s fault was culpable to a substantial degree.  In terms of relative culpability, the faults of ‘Ever Smart’ were much more culpable than those of ‘Alexandra 1’. The ‘Ever Smart’,  due to her unsafe speed, contributed far more to the damage resulting from the collision than the very much lower (and safe) speed of ‘Alexandra 1’ , and its. It followed that the causative potency as greater than that of ‘Alexandra 1’. Teare J held that ‘Ever Smart’ should bear 80% of the liability for the collision and ‘Alexandra 1’ 20%.

The Court of Appeal has now upheld the decision of Teare J. For the crossing rules to apply both vessels, the give-way vessel included, must be on sufficiently defined courses for the crossing rules to apply.  Had the crossing rules otherwise have applied it was argued that they were to be disapplied because ‘Alexandra 1’ ’ was “a vessel restricted in her ability to manoeuvre” within rule 18 (a)(ii) of the Collision Regulations.  the definition contained in rule 3(g)(iii),  provides as follows:

“ The term ‘vessel restricted in her ability to manoeuvre’ means a vessel which from the nature of her work is restricted in her ability to manoeuvre as required by these Rules and is therefore unable to keep out of the way of another vessel.  The term ‘vessels restricted in their ability to manoeuvre’ shall include but not be limited to:

(iii) a vessel engaged in …..transferring persons…while underway;”

For the ‘Alexandra 1’  it was argued that she came within the definition as she was waiting in the pilot boarding area for the pilot to board with minimum steerage way. The Court of Appeal rejected this and upheld Teare J’s conclusion that:

“….had the crossing rule applied and ‘Alexandra 1’ ’ been obliged to keep out of the way of ‘Ever Smart’ she could have done so, for example at C-6, by putting her engines astern and so permitting ‘Ever Smart’ to cross ahead in safety or by turning to starboard.  She was not restricted in her ability to take such action by reason of embarking the pilot because that work had not commenced (and never did commence)….”

The Court of Appeal also upheld Teare J’s decision on causative potency. The Judge was not precluded, when apportioning liability, from considering the relative impact of each vessel’s faults on the severity of the collision and no double-counting had been involved. Causative potency has two aspects; the first relates to the extent to which the fault contributed to the fact of the collision occurring; the second, to the extent to which the fault contributed to the damage or loss resulting from the collision. Excessive speed is a prime example of a fault likely to contribute to the extent and severity of the damage or loss suffered. A Judge may take into account the propensity of excessive speed to increase the damage suffered when undertaking the exercise of apportionment – and thus to have regard in broad terms to the magnitude of the damage sustained.  The excessive speed of the ‘Ever Smart’ bore on both the fact of the collision and its severity, amounting to the separate counting of two different (and cumulative) aspects of the same fault.