Presented by : Colin Clark, President, Lloyd's Register, The Applied Technology Group, Leanne O'Loughlin, Claims Director, UK & Americas, Charles Taylor P&I Management (Americas) Inc. and Robin Squires, Partner, Insurance and Tort Liability Practice, BLG

For as long as ships have sailed our oceans, seafaring skills and knowledge have been fundamental to ensuring safety in maritime transport. Over the centuries those skills have also had to evolve to meet technological advances in the industry. Now, as autonomous ships are fast becoming a reality, the question is not just how seafarers will once again have to adapt to new technology, but how the legal environment will have to adjust as well.

According to Colin Clark, President of Lloyd's Register Applied Technology Group, the reason why the skills issue is so critical is that "as autonomous shipping [systems] become more and more evolved, there's less opportunity for us to train our future seafarers."

Shipping certainly is evolving at a fair clip. The marine company Rolls-Royce Holdings Plc recently shared its ambitious vision of a near future in which autonomous ships operate commercially, possibly within a decade. By 2020, it reckons it will have remotely operated local vessels. By 2025, it will have deployed remote-controlled, unmanned-coastal vessels. Unmanned ocean-going ships will be next by 2030, and autonomous unmanned ocean-going ships will be ready by 2035.

There is a lot to get excited about as a result of these developments – fewer accidents, more optimized shipping routes, and the lower cost of seaborne transport. Yet, at the same time, crewless ships are controversial, as there are issues about their long-term impact on jobs in the maritime industry. They also raise a number of concerns about the legal implications for insurers, in the absence of updated legislation that can address issues surrounding liability. According to Leanne O'Loughlin, a Claims Director at Charles Taylor P&I Management, "before insurers can ever have a chance to properly evaluate the risk, we need to properly understand the extent of our members' liabilities."

In June 2017, the International Maritime Organization (IMO), Maritime safety committee commenced a scoping exercise to determine how the safe, secure and environmentally sound operation of autonomous ships may be introduced in IMO instruments. As part of that process, the committee will carry out a full review of existing IMO regulations as presently drafted and their ability to respond to reduced crew and autonomous ships. "It's a huge undertaking," said O'Loughlin.

Under the United Nations Convention on the Law of the Sea (UNCLOS), which defines the rights and duties of states with regard to international shipping, masters of vessels sailing under the flag of signatory states must assist those in distress at sea. "Well, what if there is no master?" O'Loughlin asked. "Does that duty transfer to someone sitting shore-side playing with a joystick?"

The International Convention for the Safety of Life at Sea (SOLAS) also requires an update. SOLAS includes minimum manning requirements, which will have to be adapted, as they were not drafted with crewless ships in mind.

The Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREGs) – commonly known as the Rules of the Road at Sea – relies heavily on physical watch-keeping and the onboard presence of someone to carry out the functions of the ship. It is most likely, according to O'Loughlin, that the COLREGs are not "fit for purpose" when it comes to autonomous ships.

The obligations of the carrier to ensure that a vessel is seaworthy will be found in contract of carriage documents, such as a bill of lading. These are governed by international conventions such as the Hague-Visby Rules. Under these rules, carriers must ensure that vessels are seaworthy. But in the age of autonomous ships, it is unclear what constitutes performing due diligence at the beginning of a voyage.

Other matters need to be considered as well, such as errors of navigation by the autonomous vessel in the event that cargo is damaged, lost or delayed. How do we address cyber-attacks? What measures will a fully crewless ship take to prevent pirate/ terrorist take over? The list goes on. "Everything is going to have to be reviewed at some point in the future," O'Loughlin said.

A major issue not to be overlooked is the human factor. O'Loughlin cited figures showing that 70-80 percent of maritime casualties result from human intervention or omission. The advancements in terms of safety are significant, she said, but "what's less easy to compute is how many incidents have been avoided by seamanship."

Indeed, experienced navigators who have spent years at sea have a sense of when things go wrong. At a time when cyber vulnerabilities are top of mind, there are worries in the industry about skill fade – a phrase used in the aviation industry that describes the phenomenon of pilot skills degrading over time, due to automation. The marine industry will have to give some thought to how it will go about avoiding that fate.

From an underwriter's perspective, figuring out how to rate the risks associated with autonomous ships is bound to be a challenge, as underwriters have little historical data to guide them. As a result, pioneers in the autonomous shipping space may have to wait for the regulatory and insurance markets to catch up with the technology, O'Loughlin warned. Over time, insurers will most likely refocus how they assess risk. The traditional maritime risks may become less significant, she said, whereas "cyber and product liability may take on a much greater position in the ship-owner's portfolio."

Autonomy eventually will bring safety and efficiency to the maritime industry. However, we should expect there to be a lengthy transitional period in which autonomous vessels will co-exist alongside traditional ships and terminals, O'Loughlin said. During that period, regulatory framework will have to cater to all forms of shipping until transition to automation is complete.

For centuries the insurance industry has adapted to innovation alongside the shipping industry. The legal and regulatory framework governing it will have to keep up. "The insurance industry has adapted to innovation alongside shipping industry for hundreds of years... will continue to find creative solutions in future." said O'Loughlin.

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