Raymond P. Hayden

“The Changing

Rules on the

Playground”

“The Changing

Rules on the

Playground”President

The Maritime Law Association of

the U.S.

The Changing Rules of the Playground

…A Review of the New and Proposed International Maritime Conventions and their Affect on

Marine Insurers

International Convention On Civil Liability for Oil Pollution Damage (1969)

• Compulsory Insurance

• Direct Action may be undertaken against Insurers (No “Pay to Be Paid”)

• No defenses to coverage under the policy except for “Willful Misconduct” of insured.

• Liability Without Fault

Subsequent IMO Conventions (Prior To HNS Convention)

• Convention Relating To Civil Liability in the field of Maritime Carriage of Nuclear Material (1971)

• Athens Convention Relating to the Carriage of Passengers and their Luggage By Sea (1974)

• Convention on Limitation of Maritime Claims (1976)

International Convention on Liability and Compensation for Damages in connection with the Carriage of Hazardous and Noxious Substances By Sea (HNS) (1996)

• Compulsory Insurance• Direct Action (No “Pay to Be Paid”)• No defenses to coverage under the policy except

for “Willful Misconduct” of insured.• Liability without fault up to 100 Million SDR• Mandatory Fund Creation For Each Incident.• Owner liable regardless of Bareboat Charter• Compliance Required Prior To Port Entry• Will come into force 18 Months after 12 Nations

Adopt It—To Date 10 Nations Have.

International Convention on Civil Liability for Bunker Oil Pollution Damage (2001)

• Modeled after CLC• Compulsory Insurance• Direct Action may be undertaken against

Insurers (No “Pay to Be Paid”).• No defenses to coverage under the policy

except for “Willful Misconduct” of insured.• Liability Without Fault• Will come into force once 18 Nations adopt

it (two are signatory and will adopt it shortly).

Draft Convention Regarding Wreck Removal

• Currently being drafted by the IMO• Current Draft includes:

– Compulsory Insurance– Direct Action against Insurers (No “Pay to Be

Paid”)– No defenses to coverage under the policy

except for “Willful Misconduct” of insured– Liability Without Fault up to Applicable

Limitation Regime– Cargo Owner Liable for Cost to Remove Cargo

With No Limitation on Liability Specified– Exclusive Jurisdiction in Nation where Wreck

Occurred

Draft Protocol To Amend the Athens Convention

• Compulsory Insurance• Direct Action (No “Pay to Be Paid”)• No defenses to coverage under the policy

except for “Willful Misconduct” of insured• Strict Liability for Passenger Claims in a

“Shipping Incident” including “Psychological Damage” and “Purely Emotional Distress”

• Liability Limits are “Per Capita” and Much Increased From the Current Athens Limit

• Compliance Required Prior To Port Entry

Possible Seafarers’ Convention

• Currently the IMO and ILO are discussing Seafarers’ Rights with Regard to Death, Injury and Abandonment.

• Current guidelines mandate compulsory insurance or other form of security and direct action.

What Is Needed From the Insurance Community

• Full-Time Early Attention and Participation at the onset of all IMO deliberations.

• Involvement with the IMO Delegations of each Individual Member Nation.

• Professional assistance from Analysts and Consultants at an Early Stage to help in preparing helpful presentations and reports to the IMO Delegates.

• Consistent Principled Cooperation from Industry Representatives and Industry Publications.