U.S. - Passenger Liability - Developments

February 2002

This article was published in Lloyd’s List on 29 January 2002.

US fears liability threat to cruise and insurance

As the IMO prepares to consider imposing stricter liability for ‘shipping incidents’, concern is mounting in the cruise and insurance industries, especially given the pro-passenger attitude.

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Although the impact of the protocol has yet to be fully assessed, many of its new terms have created real concern within the cruise and insurance industries. Meanwhile, recent developments in US passenger law continue to affect a large proportion of the cruiseship industry, including non-US flagged vessels. A generally pro-passenger stance seems to be the only certainty, as the courts are inclined to interpret statutes and precedent in favour of individual consumers.

The US Court of Appeals for the Eleventh Circuit recently ruled in Stephens v Premier Cruises that the Americans with Disabilities Act (ADA) applies to foreign-flag vessels onto which passengers embark at US ports. Stephens, a wheelchair-bound US citizen, took a cruise on a Bahamian-flag vessel from Florida. She alleged that, although she was charged an excess fee for a wheelchair-accessible cabin, neither it nor the vessel was in fact accessible. She alleged that the shipowner had violated the ADA, which bars discrimination in public accommodation.

The Appeal Court held that the ADA’s definition of public accommodation included such places as hotels, restaurants, theatres, beauty shops and gymnasiums, and that since most of these facilities exist on passenger vessels, the ADA should apply to cruise lines. This ruling has been appealed; as it stands, it imposes considerable burdens on all passenger vessels that call at US ports.

Historically, some US maritime courts have incorrectly held that cruise lines must "exercise extraordinary vigilance" or "the highest degree of care" towards their passengers. The law has evolved, and it is now generally acknowledged that normal principles of negligence apply — that is, the shipowner is required to exercise reasonable care in the circumstances.

In 1994, a District Court in New York held that a shipowner’s duty of reasonable care to its passengers did not extend beyond that required of a similar business ashore. In York v Commodore Cruise Lines, the plaintiff claimed that she was raped by her cabin steward. She alleged that the vessel owner should have fitted cabin doors with inside chains to prevent access from the outside.

The court recognised the need for a balance between security and overall safety on a cruiseship, but concluded that safety should be the principal consideration. The vessel’s crew had to have reasonable access at all times both into and out of cabins, and a more secure locking system would have jeopardised safety. The court found the shipowner was not negligent in its choice of locking devices, and that sexual or verbal assaults are not peculiar to maritime travel; the shipowner’s duty was no higher than that of a shoreside hotelier or other occupier of premises.

Nevertheless, some US state and federal courts have more recently held that a shipowner is subject to almost strict liability for crew member assaults on passengers.

An important issue in such assault cases is whether the shipowner was negligent in hiring the crew member in question. The same issue arises where shipboard medical staff are concerned.

It is generally well settled under US law that the carrier’s duty is limited to employing a doctor who is reasonably competent and duly qualified. If a carrier negligently hires an incompetent doctor, he has not discharged his duty to sick or injured passengers.

The leading case law is Barbetta v Bermuda Star (1988), which holds that the cruise line will not be liable for medical malpractice provided that the vessel operator has taken diligent steps to ensure that the doctor is properly qualified.

Nevertheless, some decisions impose a stricter liability. For example, in Fairley v Royal Cruise Line, the court rejected the idea that a shipowner should not be held vicariously liable just because he does not control the doctor’s treatment.

The court imposed vicarious liability on a shipowner where the ship’s physician was a salaried member of the ship’s crew, for whose actions the shipowner was responsible in the normal way.

Lower federal court decisions such as Fairley have little precedential value, but they can be indicative of a gradual shift of approach in what has hitherto been regarded as a settled area of the law.

Another such case dealt with a passenger vessel owner’s liability for the sale of alcohol.

The leading case in this area had been Meyer v Carnival Cruise Lines, in which the court held that applicable state law should apply.

Most US states provide immunity to the seller of alcohol, subject to an exception where alcohol has been sold to an obviously intoxicated minor or a person habitually addicted to alcohol.

However, in a subsequent Federal District case (Young v Players Lake Charles), the decedents sustained fatal injuries when their vehicle was struck by another vehicle, whose driver had been drinking on a casino boat owned by the defendants.

The defence contended that Louisiana’s dram shop law protected providers of alcohol from liability for the actions of those to whom they sold alcohol.

The court reverted to the basic general maritime law premise that the plaintiffs were owed a duty of ordinary care; the defendant had failed to exercise ordinary care and the resulting harm was reasonably foreseeable.

 

More information is available on Steamship’s website and in its annual review, Sea Venture.

Gary Field is claims executive of Steamship Insurance