Convoluted laws leave cruise-ship victims at sea

By February 21, 2012

More on the Italian cruise ship tragedy. Judging from previous court cases against cruise lines, survivors of the ill-fated Costa Concordia may have a hard time collecting the damages they seek.
Read the full Reuters story in the Calgary Herald here.
Cruise mishaps give victims scant hope of legal redress
By Tom Hals, Andrew Longstreth and Steve Stecklow, Reuters
When Walter Henry Alderfer learned last month about the Costa Concordia shipwreck off Italy, it brought back bad memories.
In April 2007, he, his wife and his daughter were aboard the Sea Diamond cruise ship when it struck a reef off Greece and sank into the Aegean Sea. Screaming passengers fought over life preservers, Alderfer says, and his wife hurt her neck and later needed surgery.
Five years later, the family is still seeking redress – and its experience may be instructive for survivors of the Concordia disaster.
They turned down an offer of compensation by the owner – Cyprus-based Louis Cruises, a unit of Louis PLC – that included a free voyage. They filed a federal lawsuit in New York but settled for $2,500 – less than his wife’s medical expenses and the family’s lost belongings, he says – because the tickets required them to sue in Greece. An additional suit in Greece is still dragging on.
An attorney for Louis Cruises said many passengers were satisfied with the compensation offer, and Louis reached “fair and reasonable” settlements with some U.S. passengers who sought additional awards. She also said the evacuation was swift and orderly.
Most cruises proceed without mishap. But in the rare cases when passengers do suffer serious injury – at least 17 died in the wreck of the Costa Concordia on Jan. 13 – they can face formidable obstacles in recovering significant damages, an examination by Reuters shows.
The cruise business – led by industry giant Carnival Corp. & PLC, whose Italian subsidiary owned and operated the doomed Costa Concordia – has put in place over the years a legal structure that protects operators from big-money lawsuits.
The rules for seeking redress are spelled out in complex, multi-page ticket contracts that passengers may not receive until right before boarding. Victims are often required to file suits in remote jurisdictions. The wording has been the subject of decades of court battles.
Thomas Dickerson, a New York state judge who has written extensively on travel law, says the legal hurdles resulting from the industry’s victories over the years give operators the upper hand in litigation and make the business highly profitable. The industry faces “fewer payouts because of all the roadblocks,” he said.
Cruise industry officials say their contracts streamline the litigation process, prevent frivolous claims and lower cruise costs for passengers.
In the case of the Costa Concordia wreck, the ticket contract stated that “all claims, controversies, disputes, suits and matters of any kind whatsoever … shall be instituted only in the courts of Genoa, Italy.”
Many survivors are now discovering the challenges of the Italian court system.
Italian lawyers rarely accept cases on a contingency basis, so clients may have to pay them up front to take a case. And personal-injury cases can drag on for years, especially if there is a parallel criminal investigation. The Costa Concordia’s captain is under investigation for allegedly abandoning ship. That probe must be completed before evidence will be made available to plaintiff attorneys in civil cases, said Alexander Guttieres, a Rome lawyer who has litigated major personal-injury cases.
“I’ve done cases that took seven years and are not nearly as complicated” as the Costa Concordia case, he said.
Some U.S. plaintiff lawyers are attempting to test the Costa Concordia’s contract terms by bringing action in Florida, home base of Carnival Corp. In one case, 39 survivors are seeking at least $528 million in damages in a lawsuit alleging negligence that was filed in a state circuit court.
Read the rest of the story here.