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Rule 28 Liabilities in respect of passengers

The Association shall cover:

a liability for injury to, or illness or death of, or loss of or damage to the effects of passengers and hospital, medical or funeral expenses incurred in relation to such injury, illness or death;

b liability to pay damages or compensation to passengers on board the Ship where such liability arises in consequence of a casualty, including any liability to return passengers to their port of departure or to forward them to their port of destination and to pay for their maintenance ashore;

c liability pursuant to mandatory rules of law for loss caused by delay in the carriage of passengers and their effects;

d costs and expenses incurred as a direct consequence of complying with an order for the deportation of a passenger which would not have been incurred had no such order been made,

provided that:

i the Association’s liability under paragraphs a and b above shall not exceed what it would have been had the passage contract relieved the Member of liability to the maximum extent permitted by applicable law;

ii the Association’s liability under paragraph d above shall be subject to the provisos to Rule 27.2; and

iii the cover shall be subject to proviso iii to Rule 27.1; and

iv for the purpose of paragraph (b) above a casualty shall be defined as an incident or condition on board involving either collision, stranding, explosion, fire or other cause rendering the Ship incapable of safe navigation to its intended destination or a threat to the life, health or safety of passengers.

2 Where liabilities to passengers include liabilities arising under a non-war certificate issued by the Association in compliance with either:

a Article 4bis of the Athens Convention relating to the Carriage of Passengers and their Luggage by sea, 1974 and the Protocol thereto of 2002, or

b Regulation (EC) No.392/2009 of the European Parliament and of the Council of 23rd April 2009 on the liability of carriers of passengers by sea in the event of accidents, and such liabilities (“Certified Liabilities”) exceed or may exceed in the aggregate the limit of cover specified in Appendix IV:

i the Association may in its absolute discretion defer payment of a claim in respect of those liabilities or any part thereof until the Certified Liabilities, or such part of the Certified Liabilities as the Association may decide, have been discharged; and

ii if and to the extent any Certified Liabilities discharged by the Association exceed the said limit any payment by the Association in respect thereof shall be by way of loan and the Member shall indemnify the Association in respect of such payment. 

Guidance

For more comprehensive commentary in relation to passenger claims see Chapter 11.3 of the Gard Guidance on Maritime Claims and Insurance. 

Many persons may be carried on board a vessel from time to time and the Member may have obligations to all such persons and require cover for such obligations. Whereas Rule 27 deals with liabilities in respect of Crew members, Rule 28 deals with liabilities in respect of passengers and Rule 29 deals with liabilities in respect of persons who are neither Crew members nor passengers. Passengers can be distinguished from Crew members and other persons since they are carried on board pursuant to a contract of carriage such as a cruise ticket or ferry ticket. 

The cover that is available for passenger claims is subject to the restrictions that are imposed by Rule 57 and therefore, Rule 28 and 57 should be read together. 

(A) The Association shall cover...liability for injury to...passengers1... (Rule 28.a)
Cover is available under Rule 28 for the Member’s liability for:

i the injury, illness and death of passengers;

ii damage to, or loss of, the effects of passengers;

iii compensation to, and the return or forwarding of, passengers following a casualty;

iv delay in the carriage of passengers and their effects; and

v costs and expenses arising as a result of an order for the deportation of a passenger. 

The primary source for the legal relationship between a passenger and the carrier is the contract of carriage or passage. This is sometimes referred to as the ‘ticket contract’. Contractual provisions may, however, be overridden or otherwise affected by the common law, statute or international conventions, e.g. the Athens Convention, as amended.2 

(B) ...liability for injury to, or illness or death of...passengers... (Rule 28.a)
Cover is available for the Member’s liability to passengers for injury, illness or death, including hospital, medical or funeral expenses. Such liability can arise under the cruise or ferry ticket contract between the passenger ship operator and the passenger, or it can be governed by the provisions of the Athens Convention as enacted by the country where the claims are brought. Alternatively, other provisions of national law may determine the scope of liability.3 It should also be noted that the laws of several countries consider passengers to be consumers who are entitled to enjoy certain consumer protection rights, and rules of law relating to compensation have been designed for this purpose, such as those embodied in the European Union Directive on Package Travel, Package Holidays and Package Tours.4 Furthermore, operators of passenger ships that perform voyages to the United States are obliged to arrange financial security from an insurer or other third party in respect of their liabilities to passengers for, e.g. injury, illness or death. The Association may provide such security (denoted FMC guarantee), and if so, may incur liability directly to the passengers as a result.5 

However, cover is not available for any liability that exceeds that which would have applied had the ticket contract relieved the Member from liability to the maximum extent permitted by the applicable law.6 Therefore, it is recommended that Members who are uncertain whether a ticket contract includes provisions that are more generous to passengers than those which are permitted by the applicable law should consult the Association. 

The cover that is available to the Member is for the liability that he has to passengers for incidents which occur during the time that the Ship is responsible for the passengers under the cruise or ferry ticket contract, and includes not only injuries caused by accidents on board, but also, subject to the restrictions imposed by Rule 57, injuries arising ashore whilst the passenger is temporarily ashore on an excursion.7 Liability may arise either as a result of an accidental event on board the Ship, e.g. a slip and fall incident, or as a result of a marine casualty, such as a collision, fire or sinking. However, liability for passenger illness is likely to arise only where there is a breach of a more general duty of care on the part of the Member, e.g. if it is found that the failure to maintain adequate hygiene standards in the preparation of food has caused food poisoning, or if the improper cleaning and treatment of pools or spas has resulted in the spread of a virus. 

The Member may also incur liability for death or illness or injury caused or aggravated by a failure to arrange proper and/or timely evacuation8 and/or treatment of an injured or ill passenger, even if the Member is not liable for the occurrence which was the original source of such illness or injury. The Member may also be held vicariously liable for death or illness or injury caused or aggravated by a breach of duty on the part of sub-contractors who have been hired by the Member to evacuate and/or repatriate passengers for medical reasons. However, in most circumstances, passengers enter into a direct and separate contract with the shipboard medical personnel who are usually self-employed service providers and not members of the Crew. Consequently, the Member is not usually liable for any malpractice on their part. Nevertheless, the Member may, in certain circumstances, be held vicariously liable for medical malpractice committed by on board doctors or nurses which has resulted in the aggravation of passenger illness or injury, if it is found, for example, that the Member was negligent in selecting the doctor or in accepting him to serve on board. Whilst cover is available in principle for legal liability incurred by the Member in such cases the Association will nevertheless, expect the Member to have included clauses in the contracts which they have concluded with shipboard doctors and other sub-contractors which entitle the Member to bring a recourse action against the principal party that is liable and/or their liability insurers and a failure to do so may prejudice cover.9 

The cover that is available for the following incidents is subject to particular rules: 

i Ship-to-shore boat transfers
The Athens Convention applies when the passenger is being carried to the Ship by boat at the beginning of the cruise and from the Ship at the end of the cruise.10 Cover is available for the Member’s liability for the illness, injury or death of passengers arising during such carriage to and from the entered Ship in boats owned or operated by the Member. However, if the transfer is effected within a port, cover is available even if the boat is not owned or operated by the Member.11For these purposes the term port is not to be understood in its strict geographical, legal and fiscal sense but as a practical description of the most convenient area or zone for the ship to be situated in order to enable the passengers to be safely transferred ashore.12 

ii Shore excursions
The cover that is available for shore excursions from the Ship is subject to the restrictions that are imposed by Rule 57. Therefore, the provisions of Rule 28 should be read subject to, and in the light of, the Guidance to Rule 57.a.iii and b. 

The Member may owe a duty to passengers under the applicable law in certain countries to ensure their safety during shore excursions, including a duty to warn them of risks or dangers which are known, or ought to be known, to the Member. Furthermore, the Member may be held liable for the negligent selection of a sub-standard shore excursion provider, or, in certain circumstances, be held vicariously liable for the negligence or fault of such provider. Cover is available for such liability and cover is also available provided such liability arises out of the terms of the cruise ticket contract, and provided that the terms of the contract have been previously approved by the Association. When considering whether to approve the terms of such a contract, the Association expects Members to have included in such contract a disclaimer of liability with regard to shore excursions from the entered Ship. 

However, cover is not available in respect of liability which arises under the terms of a contract that has been concluded for the excursion whether with the Member or with any other party which is a contract that is separate from the cruise contract, and in circumstances in which the liability would not have arisen, but for those separate terms, i.e. the liability would not have arisen under the terms of the approved cruise ticket contract, or under international convention or national statute or common law.13 Similarly, cover is not available in respect of any additional contractual liability which the Member is obliged to retain by virtue of the fact that he has waived his rights of recourse against the shore excursion provider (or any other third party) in respect of the excursion.14 

iii Recreational diving
Cover is available on the terms and to the extent described in ii above (shore excursions) for the Member’s liability for the illness, injury or death of passengers who take part in recreational diving activities procured or organised by a Member who utilises the services of a diving excursion provider and/or instructors.15 

iv Pre- and post-voyage incidents
Many operators of passenger ships and cruise ships have expanded their activities to include not only the sea passage, but also a range of other travel and vacation services which may be governed by other regulations and which may, consequently, expose them to new and more onerous risks. For example, a passenger vessel operator may be considered to be an ’organiser’ or ’tour operator’ for the purposes of the European Union Directive on Package Travel, Package Holidays and Package Tours referred to above under (B). Subject to very limited exclusions, the Directive imposes strict liability on the operator for any damage caused to the passenger as a result of the failure of the tour operator to provide a ‘package tour’ in accordance with the contract. 

Personal injury, illness or death may occur as a result of incidents occurring either before embarkation on the Ship for the cruise or passage, or after disembarkation. Despite the fact that the passenger may at such time be in the care of a sub-contractor of the Member, the passenger may, nevertheless, be entitled to bring a claim against the Member in the Member’s capacity as ’tour operator’. However, cover is not available for such liability unless the incident causing the injury, illness or death has arisen in direct connection with the operation of the Ship 16since the liability incurred by the Member will otherwise have been incurred by him not in his capacity as owner or operator of the Ship but in his capacity as tour operator.17For example, if liability arises as a result of incidents occurring during the carriage of the passenger to or from the Ship by land or air transport organised by the Member, cover is not available for such liability. 

v lncidents caused by third parties on board
The shipowner will normally be held liable for the acts and omissions of his servants or agents acting in the course of their employment ranging from incidents such as an error in the navigation of the Ship to a failure to ensure proper hygiene standards when preparing food on board or the harassment and the sexual assault of passengers by Crew members. However, the Member will not usually be held liable in cases where one passenger causes injury to another unless it is held that the Member contributed to the incident, e.g. by irresponsibly serving alcohol to a passenger showing violent behaviour or by security guards failing to intervene in a timely manner to protect other passengers against potential harm. Cover is available for liability incurred by the Member in all such circumstances. 

vi Liability caused by acts or omissions of ’concessionaires’
Cruise and passenger ships carry on board various service providers who are not employees of the shipowner. These service providers (concessionaires) hire shipboard space and amenities for the purpose of running their own business on board, which activities are of benefit to the shipowner because it serves to improve the attractiveness of cruising for the general public. Such ’concessionaires’ include the operators of beauty salons, spas and photo shops, as well as a variety of entertainers. If illness, injury or death is caused to a passenger by an act, default or omission of a concessionaire or his servants or agents, the claimant may decide to bring a claim against the shipowner instead of, or in addition to, a claim against the concessionaire. If the Member incurs liability in such circumstances cover is available only to the extent that the Association has given prior approval to the terms of the contract which has been concluded with the relevant concessionaire, or to materially similar terms and conditions.18 

Concessionaires may be named as Co-assureds19 under the Ship’s P&I entry in which case a so-called ’waiver of subrogation’ clause is often included in the Certificate of Entry.20 The purpose of such a clause is firstly, to ensure that the shipowner and the concessionaire cannot sue each other since both are protected by the same insurance, and secondly, to preclude the Association from exercising any recovery action against the concessionaire. If a concessionaire is not a Co-assured under the Shipowner’s P&I entry, the Member should ensure that the contract that is concluded with the concessionaire should contain appropriate indemnity provisions which hold the Member harmless and give him a right to be indemnified by the concessionaire in the event that the Member incurs liability as a result of the acts or omissions of the concessionaire or his servants or agents. Moreover, the Member should ensure that the concessionaire has adequate insurance to cover such indemnity. 

(C) ...liability for loss of or damage to the effects of passengers... (Rule 28.a)
Cover is available for the Member’s liability to passengers for the loss of or damage to the passenger’s effects which include not only cabin luggage, but also other luggage and vehicles, as defined by the Athens Convention.21 Cabin luggage includes those effects that are kept in the possession, custody or control of the passenger, including those kept in a vehicle, whilst other luggage includes property that has been entrusted by the passenger to the carrier under the ticket contract and includes vehicles22 carried pursuant to the ticket contract on the car deck of a passenger/ro-ro ship. However, cover is not available for the Member’s liability for loss of or damage to valuables such as cash, negotiable instruments, jewellery, or rare metals unless the Association has been notified of such carriage in advance and the Member has complied with any directions that may have been given by the Association.23 

A passenger who brings a claim against the carrier will not normally succeed unless he proves that the incident occurred due to the fault or neglect of the carrier or his servants or agents. However, the burden of proof is reversed if the loss of or damage to cabin luggage arose from, or in connection with, the shipwreck, collision, stranding, explosion or fire, or defect in the Ship.24 In such circumstances, it is the carrier who will have to prove that there is no fault or neglect on his part and the claimants are normally given the benefit of the doubt if there are factual uncertainties after both parties have presented the relevant evidence. 

Cover is available for only that liability to which the Member would have been subject if he had exonerated himself from, and/or limited his liability for such claims, to the maximum extent permissible under the applicable law. For example, the Athens Convention provides that the carrier is not liable in respect of valuables unless they have been deposited with the carrier for safekeeping and that, even if this is done, the carrier is able to limit his liability for loss of or damage to such items to the sum of SDR 1,200 per passenger per carriage.25 

(D) ...liability to pay damages or compensation to passengers on board the Ship in consequence of a casualty...including any liability to return passengers to their port of departure or to forward them to their port of destination and to pay for their maintenance ashore. (Rule 28.b)
Cover is available for the liability that the Member has to pay damages or compensation to passengers who are on board the Ship where such liability arises as a result of a ‘casualty’, and includes any liability to return passengers to their port of departure or to forward them to their port of destination and to pay for their maintenance ashore. 

‘casualty’
The obligation of the Association to indemnify Members for passenger claims may result in claims being made by the Association against other clubs participating in the International Group Pooling Agreement. Therefore, it is important that the definition of ’casualty’ for the purposes of Rule 28 (b) should be the same as that in the Pooling Agreement. Consequently, for the purposes of Rule 28.b, the term ’casualty’ means ’an incident or condition on board involving either collision, stranding, explosion, fire or other cause rendering the Ship incapable of safe navigation to its intended destination or a threat to the life, health or safety of passengers’.26 This phrase is somewhat broader than the manner in which the word casualty is used elsewhere in these Rules, i.e. an event likely to give rise to a claim under a marine insurance policy, such as a grounding, collision or fire.27 

Therefore, cover may be available under Rule 28.b following the outbreak of a contagious disease since such an event may be ‘an incident or condition on board involving a threat to the life, health or safety of passengers.28 However, if an incident or condition on board is to constitute a ‘casualty’ within the meaning of the Rule, the incident or condition must represent a threat to passengers in general and not merely to any particular passenger, but this does not mean that all passengers need to be exposed to the same degree of risk or that the incident or condition must have originated on board. Therefore, the Rule would apply if a contagious disease originating ashore resulted in a general threat to passengers on board the Ship while in port. 

However, cover is not available for the Member’s liability to pay damages or compensation to passengers in circumstances where a voyage is terminated for commercial reasons, e.g. due to the fact that the vessel has been inadequately equipped or maintained, or due to a war risk,29 since it cannot be said that there has been a ‘casualty’ in the above sense in either case.30 

‘passengers on board the Ship’
Cover is available for the Member’s liability to passengers who are on board the Ship at the time of the casualty. In this context, the phrase ‘passengers on board the Ship’ means passengers who have embarked for their voyage with the entered Ship and who have not yet disembarked. Therefore, so long as the passengers have commenced their cruise or passage, they need not be physically on board the Ship at the time of the incident. For example, if, during the course of a cruise, an explosion and consequent fire occurs on board while many passengers are ashore, cover is available for the liability of the Member to pay damages or compensation to those passengers for voyage interruption. However, whilst the Member may also have liabilities in such circumstances to passengers who have booked passage on the Ship but who are still waiting to embark at the next port(s) of call, such passengers are not considered to be ‘passengers on board the Ship’ with the result that cover is not available for any liability that the Member may have to such passengers.31 Consequently, it follows that, if a casualty occurs shortly before the embarkation of new passengers and renders the Ship incapable of performing the voyage, cover is not available for any liability that the Member has to those passengers to pay for their food and lodging costs. 

‘liability to pay damages or compensation’
The Member may incur liability to pay compensation under contract and/or to pay damages pursuant to a convention, statute or the common law. Cover is not available for any contractual obligations that the Member may have to pay compensation if, in the absence of such contractual provisions, the Member would have had no such obligations pursuant to convention, statute or the common law.32 Therefore, where no such obligations exist under convention, statute or common law, the Member is expected and strongly urged to include appropriate exoneration clauses in the passage contract. 

Furthermore, cover is not available for payments which are made otherwise than in satisfaction of a legal obligation to do so, such as payments made in order to protect the Member’s commercial reputation, or to promote the likelihood that the passengers may return for a future cruise, or simply in order to keep the passengers happy for the remainder of the voyage. Therefore, cover would not normally be available for the cost of free drinks and food for the rest of the voyage, for free or substantially discounted future cruises or for tickets to special events during port calls.33 However, it sometimes makes commercial sense to seek to settle a legal liability by, for example, offering a future cruise or passage at a discounted or free fare. Nevertheless, it is strongly recommended that Members who wish to settle claims in this manner should seek prior approval and clarification of cover from the Association before doing so.34 

‘liability to return passengers to their port of departure or to forward them to their port of destination and to pay for their maintenance ashore’
Whilst the Athens Convention does not oblige the carrier in the event of a casualty to return or forward passengers and to pay maintenance to them whilst ashore, such an obligation may, nevertheless, arise under statute or the common law. For example, under the Norwegian Maritime Act, the carrier has a legal liability in the event of a casualty to provide and pay for the return of passengers to their respective port of departure or to forward them to their respective port of destination, and to provide and pay for their maintenance ashore while in such transit.35 Cover is available for additional costs and expenses incurred by the Member in order to meet such obligations, e.g. the cost of chartering another vessel or an airplane to carry passengers in a timely fashion to the contractual destination or, if necessary, home, as well as hotel accommodation and food ashore. If the Member, in an attempt to save costs, makes use of another passenger Ship in his fleet to transfer the affected passengers, cover is available for the costs and expenses necessarily and reasonably incurred as a result, as well as for any liability to the passengers already on board that Ship for partial curtailment of their cruise. However, Members are strongly advised to consult the Association closely before taking such steps since any failure to do so may prejudice any claim that the Member may wish to make on the Association for reimbursement.36 

If a casualty renders the Ship incapable of continuing the voyage, the carrier may also be legally liable to pay additional sums to passengers as damages for the interruption or early termination of the voyage. Cover is available for any legal liability that the Member may have to pay such damages which may include items such as additional return trip airfare expenses incurred by passengers due to the need to book alternative air tickets, or such payments that are adjudged by a court or awarded by a tribunal for loss of holiday or inconvenience caused to the passengers.37 However, should the early termination of a voyage result in a saving for the Member, e.g. saved fuel, food or port dues, the Association is entitled to deduct such amounts from any compensation that is otherwise payable to the Member38 and the Member is obliged in such circumstances39 to provide the Association with details of the amounts saved. 

A serious casualty may not only cause interruption and the early termination of the pending voyage, but may also have a ’domino effect’ on subsequent voyages. For example, if the casualty renders the Ship an actual or constructive total loss, all future engagements of the Ship will be cancelled. However, as stated above, cover is not available for liabilities, losses, costs and expenses arising as a result of the cancellation of a charter or of any other engagement of the Ship.40 This means that a Member whose cruise ship is on charter at the time of the casualty will not be covered in respect of any non-performance penalties that may be payable to the charterer under the terms of the charterparty, e.g. during the period of repair. However, the Member may be able to obtain cover for such loss of income under loss of hire insurance, subject to a deductible period, usually 14 days counting from the time of the casualty. 

(E) …costs and expenses incurred as a direct consequence of complying with an order for the deportation of a passenger… (Rule 28.d)
Passengers may be deported when they are found not to be in possession of the necessary documents for the anticipated journey, e.g. passports or any necessary visas. The ticket contract will normally require passengers to reimburse the shipowner for expenses incurred as a result of a deportation order being served in such circumstances, However, cover is available for costs and expenses incurred by the Member in complying with a deportation order whether the ticket contract does or does not contain such a provision but the Member has an obligation to take whatever reasonable measures that are within his control in order to minimise the costs of deportation, e.g. by allowing the passengers to return to their point of embarkation on the Ship if the Ship calls regularly and frequently at this port.

(F) …the Association’s liability under…a and b…shall not exceed what it would have been had the passage contract relieved the Member of liability to the maximum extent permitted by applicable law; (Rule 28.i)
Cover is not available for any liability that would not have arisen had the passage contract relieved the Member of liability to the maximum extent permitted by the applicable law. However, the Association recognises that cruise or passenger Ships trade to various jurisdictions with different rules of law governing passenger liability, and that, consequently, it is difficult to ensure that the terms of their ticket contracts terms will always be able to provide the maximum protection against liability whilst at the same time meeting the practical need for standardised terms. In the circumstances, the Association exercises some discretion when accepting ticket contract terms which appear to be more generous to passengers than the minimum standard which is applicable under the relevant law or when deciding whether the Member should be reimbursed even in the absence of such acceptance.41 For example, cover may be available if the Member incurs liability under a ticket contract which incorporates the Athens Convention provisions, in circumstances where the liability is incurred in a state which is not a party to the Athens Convention and where less stringent liability would have been imposed as a matter of local law. 

(G) …the Association’s liability under…d...shall be subject to the provisos to Rule 27.2. (Rule 28.ii)
The cover that is available under Rule 28.d is subject to the same provisos as those which apply to the deportation of Crew members under Rule 27.2.42 For example, if the passenger ship operator is found liable to pay deportation costs and expenses in respect of passengers who do not have immigration visas because of the unjustified deviation of the passenger Ship to a port in a country for which the passengers could not expect to obtain visas, the resulting costs must be borne by the Member since cover is not available from the Association. 

(H) …the cover shall be subject to proviso iii to Rule 27.1.(Rule 28.iii)
The cover that is available for valuable items owned and brought on board by passengers is subject to the same exclusions as those which apply for Crew members under proviso iii to Rule 27.1.43 However, it is more common for passengers, particularly in some cruise segments, to bring valuable items such as jewellery on board during the journey. Cruise ship operators are protected to some extent against liability for the loss of, or for damage to, passengers’ valuables since the Athens Convention exonerates the ’carrier’ from such liability unless the valuables have been deposited with the carrier for safekeeping. Furthermore, even if they have been so deposited, the carrier can limit his liability to SDR 1,200 per passenger per carriage (i.e. per voyage rather than per incident). If a passenger elects to deposit valuables with the carrier for safekeeping, the Association will not cover any liability for loss of or damage to such valuables, even for the Athens Convention limit, unless the Association has been notified in advance of such carriage and has been satisfied that the arrangements on board for such safekeeping are adequate. 

(I) Where liabilities to passengers include liabilities arising under a non-war certificate issued by the Association in compliance with either:

a) Article 4bis of the Athens Convention relating to the Carriage of Passengers and their Luggage by sea, 1974 and the Protocol thereto of 2002, or

b) Regulation (EC) No.392/2009 of the European Parliament and of the Council of 23rd April 2009 on the liability of carriers of passengers by sea in the event of accidents, and such liabilities (“Certified Liabilities”) exceed or may exceed in the aggregate the limit of cover specified in Appendix IV:

i the Association may in its absolute discretion defer payment of a claim in respect of those liabilities or any part thereof until the Certified Liabilities, or such part of the Certified Liabilities as the Association may decide, have been discharged; and

ii if and to the extent any Certified Liabilities discharged by the Association exceed the said limit any payment by the Association in respect thereof shall be by way of loan and the Member shall indemnify the Association in respect of such payment. (Rule 28.2) 

The 2002 Protocol to the Athens Convention is now in force and the European Union has, by means of the EU Passenger Liability Regulation (EC) No 392/2009, sought to extend the provisions of the 2002 Protocol to passenger ships that are engaged in domestic sea-going voyages and to certain classes of vessels operating on inland waterways. The Regulation is intended to work in tandem with the 2002 Protocol and requires EU member states to ratify or accede to the 2002 Protocol.44 

The 2002 Protocol includes many of the principles that have been implemented in other international maritime liability conventions, such as the Civil Liability Convention regulating pollution liability and compensation, and its provisions differ significantly from the original Athens Convention in several respects. The key features of the 2002 Protocol to the Athens Convention are as follows:

  • The carrier is strictly liable up to a specified limit (the ’strict liability limit’) in the event of the death of, or personal injury to, a passenger resulting from a ’shipping incident’ which is defined as the“shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship”, unless the carrier proves that the incident resulted from “an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character”; or “was wholly caused by an act or omission done with the intent to cause the incident by a third party”. The strict liability limit is SDR 250,000 per passenger for each distinct occasion on which the passenger may be injured
  • If, and to the extent that, losses suffered as a result of injury to, or death of, a passenger caused by a ’shipping incident’ exceed the strict liability limit of SDR 250,000, the carrier remains liable up to an increased limit of SDR 400,000 per passenger for each distinct occasion on which the passenger may be injured unless he is able to prove that the incident which caused the loss occurred without his fault or neglect.
  • Should a passenger be injured or killed as a result of an incident other than a ’shipping incident’ as defined above, the carrier is liable up to the limit of SDR 400,000 per passenger per distinct occasion if the incident causing such injury or death is due to fault or neglect on the carrier. However, in such circumstances, the burden of proving fault or neglect on the part of the carrier lies with the claimant.
  • Under the Athens Convention 1974, the liability of the carrier for the death of, or for personal injury to, a passenger caused by a ’shipping incident’ is SDR 46,666 per passenger per carriage (i.e. per voyage). However, the 2002 Protocol has introduced strict liability for passenger death or injury caused by a ’shipping incident’ and much higher limits of liability which apply on each distinct occasion during the carriage rather than merely one limit for all claims that the passenger may incur during the carriage. This means that the carrier’s liability exposure is substantially increased compared to the Athens Convention 1974.
  • Carriers are required to maintain insurance or other financial security (such as the guarantee of a bank or similar financial institution) to secure liabilities arising under the 2002 Protocol whether or not caused by a ’shipping incident’ and to provide documentary evidence in the form of a certificate attesting that insurance or other financial security is in force. The limit of such compulsory insurance or other financial security shall not be less than SDR 250,000 per passenger per each distinct occasion.
  • Notwithstanding the limits of liability specified above, the shipowner may be entitled to limit his liability for all passenger claims arising on any distinct occasion pursuant to the London Convention on Limitation of Maritime Claims 1976 (the LLMC) or the 1996 Protocol of that Convention. However, Article 6 of the 1996 Protocol to the LLMC allows a state party to regulate by specific provisions in national law the system of liability that is to be applied to claims for loss of life and personal injury to passengers. Therefore, in parallel with the implementation of the 2002 Protocol and the EU Passenger Liability Regulation, many states are considering increasing the global limitation figure for passenger claims.
  • The Protocol introduces a tacit acceptance procedure that is intended to simplify the procedures for raising limits of liability again in the future. 

The International Group of P&I Clubs have agreed to provide certificates of financial security for both international and domestic voyages pursuant to the 2002 Protocol and EU Regulation but since such Clubs do not provide cover for war risks, such certificates (which are known as Non-War Passenger Blue Cards) will not provide cover for war and terrorism risks (which will have to be provided by other insurers). 

Such Non-War Passenger Blue Cards are supported by the International Group pool and reinsurance arrangements so that the Association is able to provide P&I cover for passenger claims up to a limit of USD 2 billion per event.45 Nevertheless, the substantially increased limits that apply under the 2002 Protocol and the EU Regulation now makes it more likely that the P&I limit could be exceeded in the event of a major passenger ship casualty. 

Therefore, to enable the Association to provide the financial security that Members may require under the 2002 Protocol and the EU Regulation whilst at the same time protecting the assets of the Association and the membership as a whole, Rule 28.2 provides that:

  • If passengers are able to bring claims both under the Non-War Passenger Blue Cards and in some other manner against the Member and, in the opinion of the Association, the totality of the claims gives rise to the risk that it may exceed the Association’s aggregate liability as specified from time to time in Appendix IV,46 the Association has the discretion to give priority to the settlement of claims that arise under the Non-War Passenger Blue Cards.
  • If the claims that the Association is obliged to pay under the Non-War Passenger Blue Cards exceed the Association’s aggregate liability as specified from time to time in Appendix IV, any payments that have been made by the Association in excess of such limit are deemed to have been paid by way of loan to the Member and the Member must indemnify the Association in full for such payments.

1 Passengers have been defined for the purposes of the Athens Convention as ”any person carried in a ship,

(a) under a contract of carriage, or
(b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods not governed by this

Convention.” See Article 1.4 of the Convention.
2 The Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, and Protocols thereto (Athens Convention).
3 A synopsis of the main national legal regimes (e.g. US law) governing liability in respect of passengers can be found in the Gard Handbook on P&I Insurance, 5th Edition, 2002.
4 EU Directive 90/314 (EEC).
5 See further Guidance to Rule 58.2.i in this regard.
6 See Rule 28.i.
7 See the Guidance to Rule 57.a.iii and b, which explains the scope of cover in this regard.
8 The Association will cover certain extra costs and expenses incurred as a result of a diversion of the Ship to secure treatment of a passenger who is ill or injured. Please see the Guidance to Rule 31 below in this regard.
9 See the Guidance to Rule 82.
10 See Article 1 (8) (a) of the Athens Convention.
11 See the Guidance to Rule 57.a.i.
12 See also the Guidance to Rule 57.a.i.
13 See the Guidance to Rule 57.b.i.
14 See the Guidance to Rule 57.b.ii.
15 See also the Guidance to Rule 61.b.iii
16 See Rule 2.4.a.
17 The Association has developed an additional cover (the Tour-Op Cover) to accommodate the needs of
Members for protection against these risks.
18 See the Guidance to Rule 55.
19 The cover afforded to concessionaires who are Co-assureds under the Member’s P&I policy is limited by Rule 78.3 to liabilities, losses, costs and expenses that arise out of operations and/or activities customarily carried out by, or at the risk and responsibility of, shipowners in the operation, management and manning of the Ship. In the context of cruise and passenger Ships the services provided by concessionaires are considered essential to the operation of the Ship, which is not just a means of passenger transportation, but a venue for their leisure activities, entertainment and general welfare.
20 See the Guidance to Rule 5 for more details of the Certificate of Entry.
21 Pursuant to Article 1(8)(b) of the Athens Convention, the carrier has responsibility for the passenger’s luggage not only whilst it is on board the Ship or in transit to and from the Ship but also whilst it is ashore in a marine terminal.
22 This situation should be distinguished from that where vehicles are carried as cargo or used for the carriage of cargo, under a Bill of Lading or waybill contract of carriage. Cover is available for liabilities in respect of cargo under Rule 34.
23 See Rules 28.iii and 27.1.iii.
24 See Article 3 of the Athens Convention.
25 See Article 8.3 of the Athens Convention.
26 See Rule 28. iv.
27 See the Guidance to Rule 27.1.b.
28 See also the Guidance to Rule 48.
29 See Rule 58.
30 See also the Guidance to Rule 63.1.g concerning the exclusion from cover of liabilities, losses, costs and expenses arising out of cancellation of a charter or other engagement of the Ship.
31 Such liabilities are covered under the additional Tour-Op Cover provided by the Association.
32 See Rule 28.i.
33 The following test was once suggested: Would the passenger ship operator have paid (similar) compensation on the last day of operating the vessel before winding up the business?
34 See the Guidance to Rule 82.
35 Section 414 of the Norwegian Maritime Act of 1994.
36 See the Guidance to Rule 82.
37 Under German law, a cruise operator may be liable to pay in damages for ‘loss of holiday’ up to three times the cruise fare paid by the passenger, whilst the EU Directive on Package Travel etc., provides a remedy in damages for inconvenience caused by, inter alia, disruption of the package tour.
38 See the Guidance to Rule 54.
39 See Rule 82.
40 See Rule 63.1.g.
41 See Rule 55.a.
42 See paragraphs (N)-(P) of the Guidance to Rule 27.
43 See paragraph (K) of the Guidance to Rule 27.
44 At the time of going to print the following EU member states have ratified the 2002 Protocol: Belgium, Bulgaria, Croatia, Denmark, Greece, the Netherlands and the United Kingdom.
45 See Appendix IV, paragraph 2.
46 USD 2 billion per event at the time of going to print.