European Union: The Regulation Of Passenger Liability: Recent Developments In The EU

Last Updated: 17 April 2012
Article by Kevin Cooper and Reema Shour

Cruise ship and ferry safety has been part of the general discussion of maritime safety in recent years. The cruise ship industry is heavily regulated and cruise ships operating today must comply with a variety of conventions and regulations that apply to the maritime industry as a whole. For example, there is the International Convention for the Safety of Life at Sea 1974 (SOLAS), addressing international standards for the construction, equipment and operation of ships; and the International Convention for the Prevention of Pollution from Ships (MARPOL), dealing with the environmental impact of shipping. In this article, we review the international regulation of liability for passenger and luggage claims, with a focus on recent developments within the EU.

The Athens Convention

The Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974 ("Athens Convention") regulates the liability of carriers for passenger claims. It was designed by the IMO to consolidate two earlier Conventions concerning liability in respect of passengers and luggage, and came into force in 1987. The Convention establishes a regime of liability for damage suffered by passengers on seagoing vessels. In essence, it makes a carrier liable for damage or loss suffered by a passenger if the incident causing the damage occurred in the course of the carriage and was due to the fault or neglect of the carrier. The carrier is also liable for the acts and omissions of its servants acting in the course of their employment. In cases of shipping incidents such as shipwreck, collision, stranding, explosion, fire or defects in the ship, fault or neglect will be assumed to exist and, in order to avoid liability, the carrier bears the burden of proving the contrary. In all other cases, the passenger must prove fault or neglect. It is also for the passenger to prove the extent of the loss or damage, irrespective of the cause.

Unless the carrier acted with intent to cause damage, or recklessly and with knowledge that such damage would result, he can limit his liability. For the death of, or personal injury to, a passenger, the limit of liability is 46,666 Special Drawing Rights ("SDR") (approximately US$ 72,000, at the current rate) for each distinct occasion. For loss of or damage to luggage, the limit varies depending on whether the loss or damage occurred in respect of cabin luggage, a vehicle and/or luggage carried in or on it, or in respect of other luggage.

The 2002 Protocol

The 2002 Protocol to the Athens Convention was adopted in 2002 but has not yet come into force. It will come into force 12 months after it has been ratified by 10 states. As at February 2012, only five individual states had ratified the 2002 Protocol. Although the EU acceded to the 2002 Protocol at the end of 2011, that does not substitute for individual ratification by its member states.

The primary changes introduced by the 2002 Protocol to the Athens Convention are as follows:

  • The 2002 Protocol raises the limits of liability to SDR 250,000 (approximately US$ 387,000) per passenger for each distinct occasion, with an overall limit of liability of SDR 400,000 (approximately US$ 620,000) per passenger. This means that if the loss or damage exceeds SDR 250,000, the carrier will be liable for up to SDR 400,000 per passenger on each distinct occasion unless he shows the incident causing the loss occurred without his or his servants' fault or neglect.
  • Compulsory insurance is required to cover passengers on ships. Third party claimants would have a right to bring a direct claim against the liability insurer up to the strict liability limit of SDR 250,000 per passenger for each distinct occasion.
  • Fault-based liability is replaced with strict liability. This means the carrier will be liable unless he can show that the incident resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional and inevitable type, alternatively that the incident was wholly caused by an act or omission of a third party with the intent to cause the incident.
  • An opt-out provision for states, allowing them to determine higher limits of liability for personal injury and death claims according to their national law.

The EU

The 2002 Protocol was largely incorporated into an EU Passenger Liability Regulation, Regulation (EC) No 392/2009, which formed part of the EU Third Maritime Safety Package adopted in 2009. The Regulation does not yet apply, although it will do as of 1 January 2013. Among other things, the Regulation extends the requirements of the 2002 Protocol, including extending compulsory insurance requirements for international voyages to domestic carriage by sea within a single member state onboard ships of a certain category and, if a member state so wishes, to all domestic sea-going voyages. The Regulation also introduces a number of additional measures intended to further enhance the payment of compensation to passengers.

On 12 December 2011, the EU Council adopted two Decisions providing for EU accession to the 2002 Protocol on the grounds it was in accordance with the EU's objective of improving the legal regime relating to carriers' liability. Both Decisions stipulated that member states should take the necessary steps to ratify or accede to the 2002 Protocol within a reasonable time and, if possible, by 31 December 2011. This deadline has proved to be unrealistic, as has the EU's original intention that there be simultaneous ratification of the 2002 Protocol by member states. In view of the diverse parliamentary requirements across the 27-member bloc, this was unworkable and the EU is reportedly concentrating instead on drawing up legal guidance on the EU Passenger Liability Regulation. Nonetheless, the EU itself has acceded to the 2002 Protocol in a bid to encourage member states to ratify individually.

Whilst the EU Passenger Liability Regulation will come into force after the end of this year irrespective of whether or not the 2002 Protocol is ratified, EU member states will still need to ratify the 2002 Protocol individually if a coherent legal framework is to be achieved. This is because the EU Regulation and the 2002 Protocol are not identical in their provisions, the EU does not have competence over all matters which are the subject of the 2002 Protocol and issues such as the right of individual member states to fix higher limits of liability remain within the discretion of those member states.

The International Group of P & I Clubs

One potential concern that has arisen as a result of the 2002 Protocol and EU Passenger Liability Regulation is the potential increase in insurers' exposure. Where a P & I Club has issued a Blue Card (effectively a promise to pay issued to a vessel's flag state, which in turn issues a certificate), it would be liable for its member's maximum certified exposure. There was some doubt as to whether the Clubs would agree to such certification for ferry and other passenger vessels in respect of liabilities under the EU Passenger Liability Regulation, in circumstances where they would not only be subject to direct action by claimants, but would also not be able to rely on normal policy defences, given that liability is strict except in the case of wilful misconduct. Traditionally, the Clubs have only issued blue cards in respect of international conventions, as opposed to national or regional regulation, such as EU Regulations.

The International Group of P & I Clubs has now nonetheless confirmed its agreement to the issuance of blue cards for non-war risk liabilities in respect of both international and domestic trading voyages covered by the EU Regulation.


While some in the shipping industry have expressed concern at the fact that the EU Regulation will apply independently of the Convention ratification process, the EU has apparently rejected calls for a delay to the entry into force date. The EU's stance reflects its expressed aims of promoting a common policy on maritime and passenger safety. The legal guidance from the EU Commission on the imminent EU passenger liability regime is apparently due to be published in the near future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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