Maritime Law 101
This course will present an overview of basic maritime law concepts. At the outset, viewers/listeners will learn about the origins of exclusive admiralty jurisdiction and what elements are required to bring a case into the purview of the maritime courts. By the course's conclusion, viewers/listeners will have an introductory level familiarity with relevant terminology, including maritime worker classifications and the statutes governing their employment, rights and remedies. Other topics unique to admiralty will also be introduced and certain key cases identified.
Jo Colbert Stanley: Welcome to Maritime Law 101, presented by Jo Colbert Stanley.
Maritime law is a complex topic derived from centuries of maritime tradition and jurisprudence. In fact, it predates American civil law. It's a specialized area of practice that touches on employment law, contracts and torts, and international treaties and protocols.
This course will present an overview of basic maritime law concepts. At the outset, you'll learn about the origins of exclusive admiralty jurisdiction and what elements are required to bring a case into the purview of the maritime courts. By the course's conclusion, you'll have an introductory level familiarity with relevant terminology, including maritime worker classifications and the statutes governing their employment, their rights, and their remedies. Other topics unique to admiralty will also be introduced and certain key cases identified.
"Where does admiralty jurisdiction come from?" you may ask. Well, as we said earlier, it predates American civil jurisprudence. However, in the United States constitution, it was formally introduced in article three section two, which provided that all cases of admiralty and maritime jurisdiction would be conferred to the federal sovereign. Later on in 1789 in the first judiciary act, that's currently codified at 28 USCA section 1333.
There, it was stated that the district courts would have original jurisdiction exclusive of the state of any civil case of admiralty or maritime jurisdiction saving to the suitors, and that's an important phrase, the saving to the suitors clause, in all cases all other remedies to which they're otherwise entitled, and any prize brought into the US and all proceedings for the condemnation of property taken as a prize. That last sentence really referred back to times when we talked about pirate bounty and so forth.
If invoked, admiralty law jurisdiction triggers what's known as the supplemental admiralty rules or the SARs, and while we won't go into great detail about them in this introductory course, they involve the framework and the procedures that have to be adhered to when a maritime law case makes its way through the court system.
So what brings a case into the purview of admiralty? What invokes that admiralty jurisdiction, maritime law, law of the sea? Well, this is what I call the planks of a boat case and there are basically four.
Number one, are we talking about an incident that happened on navigable waters? Number two, what type of vessel? What is the status of the vessel we're talking about? Number three, was there a disruption to maritime commerce, and number four, does the case have what we call a maritime flavor? We'll look at these a little bit in detail one by one.
Navigable waters are described as those that are navigable in fact, as in maritime commerce uses them as a highway, if you will, and it's navigable in its ordinary state. Normally, we're looking at waterways between two states or any state and foreign territory, so obviously, oceans, rivers, but exclusive of landlocked, manmade lakes within one state. So in other words, navigable waters have to cross state lines or go beyond the coast. That's the Daniel Ball Test for navigable in fact.
The Hassinger v. Tideland Electric Test, on the other hand, looks at the mean high water mark because sometimes the tide ebb and flow. The area where incident may have occurred might not be covered by water at all times. So the test there looks at the mean high water mark to determine whether or not it's navigable waters.
To discuss the vessel status, we look at use of the vessel. One of the key tests for that was the Lozman v. City of Riviera Beach, which looked at whether or not the vessel in question was built to navigate on water. Was it capable of being used for transportation over water? Now, this case involved a floating houseboat and the courts wanted to really determine whether or not it was built for the purpose of transportation on water.
Another test is the Wixom v. Boland Marine Test to determine whether or not at the time of the incident the vessel was in navigation. We look at the extent and nature of repairs, for example, that are being taken on the vessels. So in that case, we have a boat that was undergoing some reef at work and the court looked at it's taken apart. So is it really a boat still? Do the repairs invade the watertight integrity, if you will? So it's not really a boat anymore. It can no longer float. It's hauled out. It's on the hard [inaudible 00:05:48] or dry dock. So it's not being used as a boat. Then they look at whether or not it's under the control of a captain and crew.
Another test would be whether or not the vessel is a new construction, which for purposes of admiralty, new construction is not invoking maritime law because a vessel isn't a vessel for maritime purposes until she's first-
Other factors that courts will take into consideration when determining whether or not we're talking about a vessel for purposes of admiralty to jurisdiction include the so-called dead ship doctrine, and that's like if you have, for an example, a boat that's been docked permanently at a pier to be used as a restaurant, for example. In those cases, we look at whether or not the function of the ship is so changed it no longer has a navigation function. It's a dead ship. So is that, for purposes of maritime law, not a vessel?
When we look at the Stewart v. Dutra case, that one wants to talk about whether or not the boat is used in water to do its job. So a dredge, for example, the big dig up in Boston being used for purposes of carrying workers back and forth or construction equipment, is it being used for its purpose in water? That will determine whether or not it's a vessel. Then surfboards, kayaks, canoes may be considered vessels from maritime law jurisdiction purposes because they're used to transport people, not cargo, and if they're being used to on navigable waters, which we just talked about, then they'd meet the vessel status test in terms of maritime jurisdiction.
Another plank of a boat case that would bring the matter within the purview of admiralty courts is whether or not there was a disruption of maritime commerce. So for example, if you have two pleasure vessels that collide and block a shipping lane, that would constitute a disruption of maritime commerce sufficient to trigger admiralty jurisdiction.
Another plank is whether or not the case is what they call a maritime flavor, and the key case on that is Kossick v. United Fruit, and the judge used the phrase salty flavor to be precise, and also did the injury occur on navigable waters, and if on land, did a vessel on navigable waters cause the injury? So you got the salty flavor, including locality, and also you want to look at whether or not there's a substantial relationship with traditional maritime activity. So is there a nexus to maritime activity, including, for example, the storage and maintenance of boats?
So now that we know what the courts look at to determine whether or not admiralty jurisdiction should be invoked, let's look at the types of cases that wind up in the admiralty courts. So for example, you've got maritime contract disputes and these would involve, for example, repair bills or a haul out in dry dock, fee disputes, agency contracts that include admiral teacher's diction clauses, contracts involving multimodal transportation. So for example, your shipping container is getting placed onto trains. There is a famous case called Norfolk Southern versus Kirby, which is playfully known as a maritime case about a train wreck.
You've also got maritime tort cases. So for example, you have general negligence cases, where general maritime law applies, which is basically a body of law derived from admiralty jurisprudence. In general negligence cases for maritime, the same standard of negligence applies as common law in civil cases.
Then you've got products liability claims available under maritime law. Also, statutes may bring cases into the admiralty court, such as for example, DOHSA or the death on high seas act, which is the exclusive remedy for death at sea. It applies when the death occurs three nautical miles offshore. You also can see cases brought in through the admiralty extension act, and that's when damage on land is caused by a vessel in navigable waters. So the vessel itself has to be in navigable waters, but it may have, for example, collided into a fixture on land.
Other cases, and we'll get into greater detail about this, are those involving worker injury, and the types of cases there depends on the status of the injured party. What we're going to look at, for example, are seaman or now we prefer seafarer, which have what we call the holy trinity and third party general maritime negligence cases. You have the longshore and harbor workers who have a statute that applies specifically to them. Then other workers where they work in the maritime industry and for them they look to state workers comp law and general maritime law.
So let's get into greater detail with maritime worker injury cases. So to determine what type of remedies are available to the injured maritime worker, as we said, we're going to look at their classification. Are they a seafarer? Are they a longshore worker? Are they a general maritime worker? Well, who's a seaman. A seaman is an individual who's engaged or employed in any capacity on board a vessel. Traditionally, seamen are considered wards of admiralty court and the ancient wisdom was that they must be taken care of because they place their lives in jeopardy to face the perils of the sea and bring home the bounty of traveling abroad and the oceans and so forth.
So there is a certain paternalism towards seafarer remedies and how they are handled in the court systems. To be classified as one, currently, we are looking at statute 46 USCA section 1011 subsection three. That classification excludes scientific personnel, sailing school instructors, and sailing school students. The Offshore v. Robison case advises us that seamen are usually permanently assigned to or perform a substantial amount of work on board the vessel or towards the accomplishment of the mission of the vessel.
In the McDermott case, this is what we consider the contribution test. Does at the seafarer have a particular job that is determinative to the outcome of the vessel's mission? Okay. So are they contributing to what the vessel does, the vessel on navigable waters?
The very important Chandris case looks at a status-based inquiry to determine seafarer status. So here, the seaman must have a connection with a vessel or a fleet of vessels in navigation that substantial both in duration and nature. To that, they look at, for example, do they spend more than 30% of their time in service of the vessel in navigation? That's a general guideline.
Harbor Tug teaches us the substantial connection test. Does the seafarer's duties take her to sea? Does she face regular exposure to the, as we mentioned before, perils of the sea, the loathsome kraken, and it can't be transitory or sporadic work. Okay? So it can't just be, for example, what we call day laboring at the dock. That wouldn't necessarily fall under the classification of seaman.
The other component of the test is whether or not the seafarer is on navigable waters. So here, we look at the Reeves test where manmade lake, landlocked, intrastate dredging, those workers are not seamen, and you may recall what we talked about before in terms of the definition of navigable waters.
So once the individual has been determined to fall within the classification of a seaman or in some cases it's known as a Sieracki seamen, and those are ones where it's not quite as clear cut as the previous definition or previous guidelines. They may not, for example, be actual crew members in the traditional sense. Rather, they may be individuals who come and clean the vessel and is determined that that is very important towards the overall function of the vessel.
So once the person has been determined to be a seafarer or seaman, we look at the remedies available to them and colloquially, that's known as the holy trinity. So we'll take a little bit of a look at that.
So the first prong of the so-called holy trinity of seamen's remedies is what's called maintenance and cure and wages or in short, maintenance and cures, the shorthand version of that. That derives from general maritime law. Remember we talked about GML in this old case called the Osceola, if you're interested, and it provides a strict liability for limited benefits.
The fault of the seaman is generally irrelevant in these cases, and benefits cannot be clawed back. We advise employers, for example, to pay in advance when in doubt. The seafarer would sue the employer and the vessel. That's called an in rem lawsuit towards the vessel, and they would show, first of all, that they have met the classification for seaman status and number two, that they suffered an injury while "in service of the ship", and this does include shore leave and it excludes willful misconduct.
The seafarer must bring this type of lawsuit in a timely fashion to avoid what's called latches, a delay that prejudices the employer. The employer or the ship can implead third parties for indemnity and contribution.
Now, what gets awarded for maintenance and cure and wages is maintenance, so living expenses while undergoing their cure. So I think it's about $15 a day, unless the contract rate has a different rate. Cure, which is medical treatment until maximum medical cure is reached. So we've got maintenance, which is living expenses, cure, which is the medical treatment, and wages, which are paid until the end of the voyage or the contract plus tips. All right? Maintenance, cure, and wages.
This standard is liberally construed in favor of the seaman. Ambiguities or doubts are resolved in the seafarer's favor. Releases, for example, releases are viewed with suspicion and generally disfavored. As I said, maintenance, wages, and cure extends to shore leave. So the saying goes, "Even a drunken sailor is subject to the call of the ship." So they're deemed to be still on call, if you will.
There's a heavy, heavy penalty for non-compliance by the employer or the ship for not paying maintenance and cure and wages where they were deemed payable, and that penalty is codified at 46 USCA section 10313G and 10504C.
Punitive damages and attorney's fees are available for the employer's willful failure to pay, and that's different, of course. We talked about the American rule in products liability cases. Here, now attorney's fees are available and the Atlantic sounding case provided a one-to-one ratio for punitive damages and attorney's fees compared to the actual compensation awarded.
Exceptions Warren versus United States provided that maintenance and cure is not available if the injury was incurred while otherwise then in service of the ship, for example, if they were AWOL or had deserted or abandoned the vessel or if it was incurred due to willful default or misbehavior of the injured party. So that would include gross negligence or willful disobedience of orders or some positively vicious conduct.
So there, you may be also looking, for example, disobeying a strictly enforced policy like in the Warren case was drinking. Also, you may talk about situations where the individual has deliberately hidden a medical condition when they were hired. So for example, if they were specifically asked about their physical ability to perform their services and they knew or should have known that that information was important or relevant to the job, and if that hidden condition caused the injury, there are cases that say the seafarer is not entitled to maintenance and cure in those situations.
The second prong then. The second prong of the holy trinity of remedies available to seafarers is the unseaworthiness standard, and this is where the seafarer files a lawsuit based on the unseaworthiness of the vessel. This derives from GML, from general maritime law. Again, the old Osceola case, and it's a strict liability standard, again, without regard to fault of the plaintiff.
So it's still a viable claim by providing the ability of the seafarer to place a lian on a vessel to secure their claim and for imposing liability on the ship owner, where the seaman's injury was caused by a third party and the ship owner didn't have a reasonable opportunity to discover or remedy the situation.
So in these cases, the seafarer would sue the employer and the ship in rem, again, just like in the previous prong that we discussed. Here, again, the plaintiff must show seaman status or that they meet the classification of a seafarer, that there was an unsafe workplace and those unsafe conditions or unseaworthiness were the ordinary proximate cause of their injury.
These cases have a statute of limitations of three years. The seafarer must bring this type of claim within three years and the employer or the ship can implead third parties for indemnity and contribution. Notably, there's no liability for instant unseaworthiness. Okay? So a safe ship is not an accident free ship. So there must be some scintilla of evidence showing that the vessel was unseaworthy at the start of a voyage.
So when we talk about instant unseaworthiness, we're not saying that cases are available for unseaworthiness where, for example, a hatch opened during a rough crossing, but that's not how that hatch was at the start of the journey.
The ship owner has an absolute duty to provide a vessel reasonably fit for the purpose, right? So the standard here, by the way, is not perfection, but reasonable fitness. It's irrelevant whether or not the ship owner knew of the potential harm. Okay. It's irrelevant in unseaworthiness claim. It may be based on failure to provide adequate equipment for performance of an assigned task and/or, for example, adequate or competent crew. Failing to provide sufficient crew can be a basis for an unseaworthiness claim.
Negligent hiring, for example, in the case of Miles versus Apex Marine, the homicidal maniac might be the basis for a negligent hiring slash unseaworthiness claim, and pleasure craft owners also owe a duty of seaworthiness to those who are working on board, whether they're there voluntarily or as employees.
So seaworthiness, again, we said is tested at the beginning of the voyage. Was the vessel seaworthy when it left the dock? What caused it to become unseaworthy later? Was it bad timing and bad luck? So this is a comparative negligence and assumption of risk here can reduce or preclude recovery. The recent in case of Dutra group versus Batterton talked about whether or not punitive damages are available in this case and here, jury trials are available. So that's the second prong of the holy trinity.
Okay. So now we're going to talk about the third prong of the holy trinity of remedies available to seafarers. Remember, we're just talking about cases that can be brought by those maritime workers that have been classified as seafarers. So we talked about in the holy trinity, number one, the maintenance and cure cases, the second being the unseaworthiness cases, and now we're going to talk about Jones Act negligence cases.
The Jones Act is a federal law enacted in 1920. It's codified at 46 USCA section 30104, and it was based on the federal employers liability act and federal railroad workers act. So sometimes you'll see admiralty cases talking about those two statutes even though it's a maritime law case. They use them for analogies.
Under the Jones Act, the seafarer can sue her employer and other negligent third parties, and these cases, I should say, are easier to prove than the unseaworthiness cases, but most practitioners bring both. Double recovery is not available. Just bear that in mind. Plaintiff here must show, number one, as always, seaman status, number two, that the injury occurred in the course of his employment. So there has to be an employer-employee relationship, generally, and that the negligence is attributable to the ship or to the ship owner unless the injury is caused by a violation of a safety standard, and that's a slightly different standard.
So there's no Jones Act liability for the ship owner if the defect that caused the injury or is deemed to have caused the injury could not have been discovered with the exercise of reasonable care. Here in these cases, it's important to note that the seafarer can only sue the employer. Okay. So there's no in rem case under the Jones Act. Here, the seafarer cannot soothe the ship or the vessel. There is a three-year statute of limitations for Jones Act cases. So those must be brought in a timely fashion. Notably in Jones Act cases, the seafarer can choose between federal court at law or admiralty or state court. So that's an interesting quirk with the Jones Act.
The Jones Act cases for negligence may also include negligent infliction of emotional distress if it's deemed that the seaman was in the "zone of danger". So it can be a near miss, but it said that those can be as frightening as a direct hit, but the seafarer must have sustained the physical impact or have been placed at immediate risk of physical harm.
In Jones Act cases, no punitive damages are available nor pre-judgment interest. There's no pre-judgment interest awarded. Again, the employer can implead third parties for indemnity and contribution. Here, however, comparative negligence and assumption of risk will reduce or preclude recovery. Jury trial is available and there's a split in circuits on how much negligence plaintiff must show to get to the jury, the standard to be used, and also, there's a split on this standard to be used in analyzing the defendant's conduct, but the Jones Act cases are a very important component of the holy trinity of cases or of remedies available to seafarers.
So some of the defenses available to the seamen cases, the seafarers remedies cases include contributory negligence or that applies and that would act to diminish the amount of damages unless the employer, again, violated a safety statute. There's also the defense of assumption of risk of employment. That's not a bar to a negligence claim, however, I should point out and, of course, defenses involving the contracts or rules or regulations or other devices that exempt the employer from liability.
Okay. So continuing our look into the cases, maritime cases involving injury to maritime workers. Having looked at the remedies and cases involving seafarers or those maritime workers classified as seafarers and seamen, let's look at those for workers classified as longshore and harbor workers. This involves the LHWCA or the Longshore and Harbor Workers Comp Act, which is codified at 33 USC section 902.
Now, this provides recovery, but not in rem recovery. So in these cases, the worker cannot sue the vessel or place a lien in rem on the vessel. So it provides recovery for injury to land-based maritime workers and those who are regulated by the Department of Labor. So this includes longshoremen. Those are the individuals who load and unload ships, for example, harbor workers, and these are the individuals who build or repair or dismantle and break ships. The LHWCA also applies to those workers who clean vessels between failings. Okay?
Now, excluded workers, and these are not allowed to bring suits under the Longshore and Harbor Workers Comp Act, and those are master or member of a crew or any vessel. So in other words, seafarers, right? Of course, they don't need to bring cases under the LHWCA because they're going to bring theirs under the Jones Act or unseaworthiness or maintenance and cure. Also, the Longshore and Harbor Workers Comp Act doesn't apply to office workers or recreational boat repairs. They would fall under state workers comp causes of action, and it doesn't apply to recreational or leisure workers, for example, on casino boats, but it does not preclude those who are covered from suing third parties for negligence, but again, these workers can't sue in rem. They can't sue the ship. They also cannot sue ship owners for unseaworthiness. Okay? That's only for seafarers.
There is a situs test and a status test when we're looking at the LHCW cases. So the situs test wants to know whether or not the individual that is aggrieved was working on navigable waters, and for the purposes of the Longshore and Harbor Workers Comp Act only, this includes piers, wharves, dry docks, terminals, marine railways, other adjoining areas, normally used to load, unload, build, repair or break ships, but if all the work is done on land, that does not border navigable water, then the situs test isn't passed, and the LHWCA benefits are not available.
The status test of the employee is that person doing maritime work, work that is traditionally involved in the marine industry. You also want to look at the employer test. So if any one of its employees engage in maritime work, that employer becomes a statutory employer, an employer who is covered by the Longshore and Harbor Workers Comp Act.
There's also a borrowed servant test under the LHWCA, and that, you want to look at the master-servant relationship, who has control over the work beyond mere suggestions, of course. Whose work was being performed? Was there a meeting of minds between the original and borrowing employer and so forth? So the Longshore and Harbor Workers Comp Act applies to those workers and to those employers.
So having looked at the types of cases and remedies available to various types of maritime workers, we'll just briefly here discuss wrongful death cases. Here, mostly what's important is to look at where the death occurred. If it occurred on land, the seaman ... A seaman is a seaman, they say. It doesn't matter where the injury or the death occurred. Those remedies follow him on land as long as the injury or death occurred in service of the ship. If that occurred in territorial waters, the survival and wrongful death actions are created by general maritime law.
I should mention that DOHSA, the death on high seas act, doesn't preclude wrongful death claims for nearshore incidents. There is no recovery for non-pecuniary damages, however. Also, the admiralty laws don't displace state survival or wrongful death statutes for deaths that occur in state territorial waters. Death on high seas, as we mentioned earlier, that involves the DOHSA if it's three miles offshore, and I should mention here as a side note, that three nautical mile seems arbitrary, but that was according to Thomas Jefferson as far as a canon could shoot.
Anyway, so DOHSA applies exclusively to cases involving deaths three miles offshore, unless the individual is a seaman who then also gets Jones Act remedies implicated. If we're talking about a plane crash, that is more than 12 miles offshore, DOHSA is also implicated in those cases.
So we mentioned early on about the possibility that contract disputes would be involved in admiralty cases. Here in particular, I'm just going to go over so that you're familiar with the terminology of what we call charter parties. These are contracts to basically hire a vessel, right? So there are different types of demise charter. Charter parties refers to the document itself. Now, we're going to talk about the types of charters that those documents or contracts are describing.
So a demise charter, that's what we also call a bare boat charter, and that's where the charterer provides, charterer being the person who is hiring the vessel or renting if you want to call it or chartering the vessel, they provide the captain, the crew, the fuel, everything. Okay? So a bare boat, literally, is turned over under contract to the charterer. This is done sometimes for tax purposes. The shipyard, for example, will continue to own the vessel until you've paid it off financing after delivery for those big shipping container ships.
Let's see. Time charters, those are the types of charters that are done for a period of time. It's the most common type of charter. In this case, the ship owner would supply the crew. So therefore, the charterer is not responsible for them.
Then you've got voyage charters. Those are contracts for a single or series of voyages. The length of time is irrelevant. Okay? It's literally the journey. The ship owner, again, in these cases, supplies the crew and maintains control of their benefits, remedies, and so forth in case of injury.
A slot charter, that's when you only need a piece of the vessel. So here, the charterer is only let's call it renting space, if you will. So think of a single container on a container ship.
So the charter party, like we said, is that's the document. Once the terms of it are agreed upon, that becomes what's called a fixture. There are a lot of forms involved with it that primarily are based out of New York, and disputes for charter party contract cases usually go to arbitration in New York or London, in some cases, and charter party contracts are governed by the federal arbitration act. If a bill of lading is also involved, so again, think about shipping containers, there may be what's called a clause paramount. Okay? Another term that could become familiar with that would stipulate the application of COGSA or the Carriage of Goods at Sea Act statute. If it's a purely local charter, state arbitration statute would apply.
Then you may see in the document, the charter party, safe port safe birth clause, where the charter can't recover any damages for ship owners, crews, refusal to go to, for example, a war torn country. All right? That would be a safe port or a safe birth clause in a charter party document.
So as we talked about, there are a number of other statutes that fall within the purview of maritime law and admiralty. You've heard me reference it a couple times so far, COGSA, which is the Carriage of Goods at Sea Act, and that's codified at 46 USCA section 1304, and this was adopted in 1936 after it applied in conjunction with the Harter Act of 1893, and that provided that shippers and ship owners must be fair. There can't be any contracts of adhesion. There needs to be a reasonable allocation of risk between the ship owner and shipper. The Harter Act only applied to inland transportation. So CGSA now added to it applied for those carriage of goods at sea.
So we talk about bills of lading. We mentioned those earlier, and that under COGSA, certain terms are prohibited in bills of lading, and the contract invoke COGSA and specifying terms of shipment and parties and responsibilities. It has to say what's in the container, and that's what we call an STC clause, said to contain. If there are any latent defects or dangerous cargo provisions, that has to be noted in the bill of lading, and it may incorporate terms of the charter party, which we discussed those and the shipper would be bound by those, and any ambiguities in the bills of lading are ruled against the drafter, which is common in contract law, right?
If the bill of lading is attached to charter party, and then you insert that clause paramount to stipulate the application of COGSA as opposed to charter party rules, with the allocation of risks under COGSA, the carrier becomes responsible for the goods unless the damage is due to crew negligence or perils of the sea. If the ship was unseaworthy at the start of the voyage, the carrier cannot invoke any defenses, any of the COGSA defenses.
There's also something called the Himalaya clause, which may extend COGSA liability and defenses to downstream shippers and transporters. So again, you may remember from earlier we talked about Norfolk Southern versus Kirby, the maritime case about a train wreck. All right? So that involved the Himalaya clause where the Carriage of Goods at Sea Act was included or the liability was extended to the train company.
Proof of claims, here the fault starts with the ship owner, and to establish a prima facie case under COGSA, you have to attach the bill of lading to the complaint. There's a limitation of damages and that's limited to $500 per unit unless the contract specifies otherwise. The per unit denominator becomes something that's often contested in court cases because people may argue that the shipping container is one package and not the individual items inside. Right? So think of you've got 10,000 books inside one shipping container and one person is claiming while the damages are limited to 500, while the owner of those goods inside might beg to differ. So that's the damages clause or the limitation clauses under COGSA.
Okay. So we'll briefly here look at tugs and towing and pilotage, and this is just to familiarize you real quick with some of the words or language that you may come across in reading maritime cases. In towing, for example, the one that pushes a barge is a towboat. The one that pulls a barge is a tugboat. Now, of course, in common parlance, we call both a tug and the barge is the tow or the towee. The tug is deemed to be in control of everything. So it owes a duty of workmanlike service to the towee and must exercise a duty of reasonable care in towing and in mooring the vessel it's towing.
Generally, well, towage contracts don't have to be in writing, mind you, but generally, a towing contract will be honored when it's negotiated at length between two sophisticated parties. There's no cap on damages involved in towing unless COGSA, the Carriage of Goods at Sea Act is implicated by clause in the contract. The towee can collect damages from everyone involved in towing its stuff and claims arising out of a towage contract are secured by liens on the offending vessels, on the offending tower or tugs.
In the absence of express contractual provisions, the tower warrants that'll furnish a seaworthy vessel and crew that possess sufficient skill and knowledge to perform the tow safely and the towee, the one being towed warrants that it will furnish a seaworthy vessel with proper equipment and lighting, and if it's going to be manned while it's being towed, also with a sufficient and competent crew. That's towing real quick.
Pilots, so you may have seen or heard of pilots, those are the individuals who board vessels and safely guide them into harbors or into port, and they have local knowledge of the harbor or the inlet that they're bringing the vessel into. In some cases, their compulsory, right? The harbor may require the incoming vessels or outgoing vessels have a competent and credential pilot on board. When there is a compulsory pilot on board, the ship owner is not vicariously liable for damages caused by fault of the mandatory pilot. However, the vessel, not the ship owner, the vessel is liable in rem, we talked about in rem before, for torts of the compulsory pilot.
That said, the captain of the vessel being piloted can't abdicate his responsibility even when a compulsory or mandatory pilot is on board. Okay. So this, in essence, would make a ship owner responsible through what we call respondeat superior for the master's negligence in failing to assert command when the compulsory pilot, for example, when their conduct is obviously improper.
Something that comes up quite a bit in admiralty or maritime court cases are liens, and these can be liens on cargo, liens on vessels. Liens on cargo are those where the vessel owner has a possessory interest in the cargo that it will be carrying. Liens on vessels include express liens such as the ship mortgage act, which is a preferred mortgage, and that act is codified at 46 USCA section 31301, and those are called express liens because they have to be recorded with the secretary of transportation, and a certified copy must be kept on board.
The implied liens on vessels, those arise out of the occurrence of maritime torts or the performance of maritime services and may arise even if the owner of the vessel is not personally liable as we saw, for example, in the case of demise charters and compulsory pilots. Implied liens do not have to be recorded. Sometimes they're known as secret liens even, and providers of what are called necessaries are entitled to an implied lien on a vessel. Necessaries include those who provide repairs and supplies. For example, the use of the dry dock or marine railway, stevedoring services, provisions, anything that is delivered to the vessel and earmarked or used on the vessel and reasonably needed in the ship's business. Those are what we call implied liens.
Liens are rank to determine the order of payment, and the ranking of liens can be found through a smattering of court opinions, but in essence, the ranking that we see most often is very high up. The higher priority, let's put it that way, of the liens would be the payment of crew wages. That's one of the liens that has to be extinguished as quickly as possible out of any proceeds, for example, of the vessel if it's auctioned off as a result of litigation, for example.
Salvage liens are also ranked pretty high, liens that have arisen out of torts, including collisions and personal injury claims and, of course, preferred ship mortgages, the ones we just talked about, which are pending. So the enforcement of liens in rem are only enforceable by federal court sitting in admiralty. In these cases, this is when the supplemental rules will be invoked to determine the procedure of enforcing the liens.
After these procedures have taken place, the liens are extinguished in a number of ways, as I mentioned, through the sale of the vessel. Sometimes they're barred. They're extinguished because they're time barred or because of the delay of the individual bringing suit. Remember we talked about timeliness and statutes of limitations. Sometimes the lien is extinguished through the loss or destruction of the vessel or even waiver. In the case of bankruptcy, then the bankruptcy courts would get jurisdiction of any vessels seized in rem through actions involving liens.
The following slides deal with the law of maritime collisions, and I am deliberately leaving these out because there will not be enough time to go through this material within the time that we have allotted for this presentation, same with the slide for-
One of the interesting quirks of admiralty law involves marine insurance and that's because it invokes the jurisdiction of state courts and state law applies as opposed to federal law or admiralty. Marine insurance contracts for maritime property or a maritime risk, while it's a maritime contract, is governed by applicable state law according to infamous case known as Wilburn Boat versus Fireman's Fund.
So the case is decided by the law of the state with the most significant relationship to the insurance dispute. So is it the place of the making of the insurance contract or where the policy was issued and delivered, place of performance or the domiciles of the businesses or parties to the contract? The policies are typically construed against the insurer. If there's any ambiguity in marine insurance, we look at whole policies, which ensures the vessel and then protection and indemnity policies, which ensures the owner against liability to others for damages caused by the vessel or its crew.
An interesting component of maritime contracts for insurance includes the doctrine of uberrimae fidei. That's Latin. It talks about the applicant for marine insurance having an utmost good faith duty to disclose all material facts to the insurance company even if the insurance company didn't ask for that information, and that can become a turning point for many cases involving marine insurance.
Now, a marine insurance may have contracts, clauses, including a captain warranty through which the insurer has the right to approve the captain. The policy is always read to provide the insured with the greatest possible coverage, which might provide coverage for any claim or suit based on injury occurred through ownership, maintenance or use of the insured boat.
Intentional acts usually create an exclusion, but it could be argued that one did not intend to give the, insert injury here. The insurer is only liable for losses it agreed to cover, so for example, sentimental value of the whole or for damages or not ordinarily recoverable, whether or not it's constructive. Total loss is something that would be looked at when the cost of repairs is more than half the value of the vessel and the owner elects to abandon the vessel. Types of risks insured against for marine insurance include marine risks, which are damaged caused in navigation or extraordinary action of elements of sea, fire, theft, for example, war risks. You can also have an all-risk policy, which would include marine and war risks.
Then you can have riders called specialty to cover clauses, including collision and running a ground, disbursements, loss of freight, student labor, and the Inchmaree clause, which covers accidents in handling cargo or in bunkering, which is marine terminology talking about fueling, bunkering caused by negligence of the master or crew and damage from explosion or from latent defect in the vessel or its machinery.
The general rule in admiralty is that attorney's fees are not recoverable, but it's an insurance contract so it depends on the language involved. Subrogation is available and it's specifically provided for in the Longshore Harbor Workers Compensation Act, but may include a waiver against designated third parties.
So again, just to wrap that up, marine insurance, you're going to have to look at the state laws that apply to the contract before you think about admiralty law.
So the final thing we'll look at today is the limitation of liability act also known as LOLA, and it's codified at 46 USC sections 3501 through 3512. It's an important component of admiralty law, and it's a procedural statute, and it can only be used after admiralty jurisdiction has been independently established.
Basically, what it says is that if the vessel owner is found or the vessel is found to be liable for the damages incurred, the award is limited to the value of the vessel and pending freight if freight is involved. So the ship's owner can invoke or initiate limitation proceedings without admitting liability to claimants so that if in the event they are ultimately found liable, this limitation of the award would apply.
In general, LOLA defenses are disfavored and courts are hostile to it because it limits the amount of compensation to aggrieved parties, and unless entitlement can be clearly proven, courts are reticent to allow the limitation of liability to be enforced.
Also, if the claimant has privity or knowledge, he cannot invoke LOLA. So he has to show that he did not know what the vessel was going to be used for or who would be using it, for example. An individual ship owner is not charged with that so-called privity or knowledge when he hired competent captain and crew, except in cases of personal injury or death or if he delegates all management in control. The delegation may become what we would call an alter ego.
The ship owner can invoke LOLA if nothing they could have done would've changed or avoided the accident, but nonetheless, the ship owner is liable for his own fault. Neglect and personal contracts and charter parties, LOLA is not available. So again, LOLA is a procedural statute and it's one that must be filed within six months of receiving a written claim, and this, again, involves the supplemental admiralty rules. You don't have to wait for the claim to be asserted to file a LOLA petition. Again, you can do it without admitting liability. You can do it while denying liability.
The claimant of LOLA limitations would have to recite the facts given rise to the claim and explain why they're entitled to the limitation. So LOLA is a very important procedural statute that may come up in maritime cases.
At the end here, I would just put a conclusion saying. So this is just an introduction to some terminology, and statutes, and classifications, and definitions involved in maritime law cases. I hope you have learned something and thank you for listening.