Australia: Athens Convention, maritime passenger claims, and the Australian Consumer Law

Last Updated: 23 March 2018
Article by Adam Vrahnos and Geoff Farnsworth

Most Read Contributor in Australia, September 2018

The Department of Infrastructure and Regional Development (the Department) has released a discussion paper on the possible ratification of the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974, as amended by the 2002 Protocol (Athens Convention).

The Athens Convention was implemented to consolidate two earlier Brussels conventions adopted in 1961 and 1967 respectively. The Athens Convention was implemented to govern a carrier's liability for damage and/or loss suffered by a passenger if an incident causing damage occurred in the course of the voyage and was caused by the fault or neglect of the carrier.

Some key features of the Athens Convention are requirements for carriers to maintain insurance to cover death/personal injury; the ability for claimants to recover against insurers directly; and the choice of jurisdiction in which claimants can bring their claim, provided the court is located in a jurisdiction that is a party to the Athens Convention.

As it stands, of the 25 states who have ratified the Athens Convention, Australia is not one.

Australian Legal Framework

The Australian cruise ship industry is going through a boom which has seen passenger numbers increase by an average of 19.4% per year since 2007. In 2016, the Australian cruise industry saw a rise in passenger numbers of 21% to over 1.2 million passengers. Australia is now the fifth largest cruise market.

The growth of the industry has drawn the attention of the Department which is seeking to ensure that Australian passengers and shipping carriers are provided with the same level of rights and protections as their international counterparts, including to provide increased certainty for parties to resolve claims.

The Australian Consumer Law (ACL), enforced and administered by the Australian Competition and Consumer Commissioner (ACCC), is a fair-trading and consumer protection regime which has been uniformly adopted by the state and territory governments. The ACL provides an avenue for consumers to pursue claims for damages in respect of harm resulting from the fault of a person or for actions based in negligence, contract etc.

The ACL also creates base guarantees for consumers who acquire goods and services which cannot be contracted out.

Australia has implemented the Convention of Limitation of Liability for Maritime Claims 1976 (LLMC Convention) through the Limitation of Liability for Maritime Claims Act 1989 (LLMC Act) which allows carriers to limit their liability however there is no requirement for carriers to take out and maintain insurance and there is no avenue for claimants to sue insurers directly.

Issues with the current framework

The Australian law for the international carriage of passengers on ships is complex and has various overlapping legislative regimes which create uncertainty for both carriers and passengers.

Some of the issues that Australian passengers may face when bringing a claim under the ACL which would be alleviated should the Athens Convention be implemented include:

  • Many passengers' contracts will contain an exclusive jurisdiction clause preventing a claim being brought in Australia or have a clause specifying that it is subject to foreign law. The Athens Convention allows a choice of jurisdiction provided that the court is located in a jurisdiction
  • There is currently no defined limit to compensation that passengers can claim, adding to the uncertainty carriers face. The Athens Convention provides for a two-tier liability system for claims involving death or personal injury to passengers. For example, carriers are strictly liable up to 250,000 SDR (approx. AU$730,106) unless the carrier proves that the loss was caused solely by an act of war, natural phenomena or the act of a third party
  • The Athens Convention would allow claimants a choice of jurisdiction to bring a claim in circumstances where there is no compulsory requirement in Australia for ships to have insurance for passenger claims, or that there be an Australian presence to a claimant has access to funds should a claim be brought
  • Even if the carrier has insurance, passengers are not able under the current legal framework to sue the insurer directly, and thus may not have access to insurance proceeds.

If Australia were to ratify the Athens Convention, all claims for the recovery of damages for death and personal injury, as well as loss or damage to the passenger's luggage, sustained during the course of international carriage, would be brought into alignment with other signatories whilst also allowing Australia to implement its own definitions around the limitation of liability. For example, in respect of personal injury, article 7 of the Athens Convention provides member states with some flexibility in stating that:

"the national law of any State Party to this Convention may fix, as far as carriers who are nationals of such State are concerned, a higher per capita limit of liability."

The deadline to lodge written submissions on the issues raised in the discussion paper closed on 31 January 2018, however with increased attention on Australia's cruise ship industry, an opportunity to join the discussion on whether to implement the Athens Convention will present itself in the near future – watch this space.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Geoff Farnsworth
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