In June 2009, Mr Justice Steel handed down liability[1] and costs[2] judgements in the “Western Neptune”.
In the early hours of 24 September 2007 the claimants’ seismic survey vessel “Western Neptune” was towing a spread of ten streamers and six gun arrays in the Gulf of Mexico when the defendants’ container vessel “St Louis Express” collided with the array near its tail buoy. Each streamer extended over 8,000 metres (4.34 n miles) astern of the “Western Neptune”. The total width of the spread was some 1,080 metres.
The claimants brought proceedings against the defendants claiming damages of about US$25 million. The “St Louis Express” was not damaged as a consequence of the collision and accordingly the defendants did not have a counterclaim. The fact that there was no counterclaim from “St Louis Express” is relevant as will be seen later in this article.
This is the first reported decision concerning a collision with towed seismic equipment and the judgement sets out many interesting issues relating to the conduct of both vessels. For the purposes of collision avoidance under the Collision Regulations, and having taken advice from the Elder Brethren, the judge concluded that the array, as a tow part of which was on the surface, must be treated as an integral part of the vessel “Western Neptune”. It was held that the situation of danger was created by the “St Louis Express”. Among the criticisms levelled at the container vessel was:
· a faulty visual and radar lookout,
· a failure to incorporate the survey navigation warning within the passage plan and heed the requirement not to enter the exclusion zone,
· an improper alteration of course to port so as to cross the path of the array, and
· a failure to see or to appreciate the significance of blue strobe lights on the stern buoys attached to the array.
Interestingly the judge commented that it was unusual for a relatively inexperienced Third Officer to be placed on the 0000-0400 watch. The Voyage Data Recorder (VDR) of the “St Louis Express” recorded a VHF conversation between the vessels (though the unsatisfactory practice of the Third Officer playing loud music on the bridge was frowned upon).
The “Western Neptune” was not without fault and criticised for not keeping a good look out and a failure to draw the attention of “St Louis Express” to the presence and significance of the tail buoys on the streamers. Although not causatively, she was also at fault for a failure to dive the streamers, which might have reduced the damage.
Liability was apportioned one third/two thirds in favour of “Western Neptune”.
The liability judgement makes interesting reading though the primary purpose of this article is to highlight the further guidance given by Steel J on the court’s approach to awarding costs in a collision case. This issue arose previously in the “Krysia” [2008] EWHC 1880 (Admlty). In that case it was found that the vessel “Europa” was 70% to blame and “Krysia” 30% to blame for the collision. The owners of the “Krysia” sought a recovery of their full costs whereas the owners of “Europa” argued that they should only recover 70% in accordance with the liability apportionment. The court first concluded that the claimant was the party that had won at the trial and therefore the general rule in CPR Part 44.3(2) must apply unless there is a good reason why it should not do so. It was also confirmed that there was no rule or principle, applicable to collision cases where there is no counterclaim, that a claimant who is found at fault should recover costs in proportion to percentage of liability of the defendant. In reinforcing a costs order in favour of the claimants the judge was critical of the defendants’ conduct including a failure to make an offer at any stage and a late change of case.
In the “Western Neptune” these points of principle were very much reinforced. The starting point was, again, that the successful or winning party is entitled to an order for their costs. It was common ground that the claimants were the “successful” or “winning” party and the fact that they were found 1/3rd to blame and thus can only recover 2/3rds of their claim was not, in itself, a reason to reduce the level of their recoverable costs. However, the Admiralty Judge made clear that the court was able to demonstrate a degree of flexibility in exercising its discretion in relation to costs and the following factors were taken into account:
1. The claimants were, to a significant degree, the authors of their own misfortune, being held 1/3rd to blame for the collision.
2. The defendants had offered to settle the case at 60/40 in April 2008.
3. The claimants’ offer to settle at 80/20 was made almost a year later, by which time the bulk of the costs had been incurred.
4. The claimants’ offer was substantially wider of the mark than that of the defendants.
5. There was a substantial amount of late disclosure of highly significant documents by the claimants, which had an important bearing on the issues.
The owners of “Western Neptune” claimed all of their costs though the judge concluded that a fair outcome was that the claimants should recover just 65% of their costs with no order as regards the defendants’ costs.
This decision serves as a valuable reminder thatthe award of costs is at the discretion of the court. In this respect, the conduct of the parties during proceedings is important, particularly with regard to making appropriate settlement offers and prompt disclosure. These issues can impact significantly on the costs award in favour of the successful party.
[1] [2009] EWHC 1274 (Admlty)
[2] [2009] EWHC 1522 (Admlty)
