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The media has been abuzz the last several weeks with stories about the Costa Concordia accident. From stories about the ship’s captain, Francesco Schettino, allegedly being hired to work with a coalition of salvage crews in Italy to articles speculating on what the fall out will be for Carnival Corporation, the parent company of Costa Crociere and other cruise lines, the accident has everyone talking about cruise ship safety. All that talk, however, is likely to be of little consolation to the passengers and crew members on the Concordia and their families, since the odds of them being able to litigate their cases in the United States are extremely remote. In the case of the crew members, their employment contracts typically require them to arbitrate any claims they have arising out of their employment, including claims for injuries, in their home country or the country where the cruise line is based (in Costa’s case, Genoa). In the case of injured passengers, they, too will likely be precluded from filing suit in the United States for the injuries they sustained because of the fine print contained in the tickets they purchased before they boarded the ship.

While most of the major cruise lines require passengers who are injured on cruises touching in a United States port to file suit in the jurisdiction where they are headquartered – Miami, in the case of Carnival, Royal Caribbean, and NCL, Seattle, in the case of Holland America- no such protection is afforded passengers on cruises that do not call or touch a US port. In the case of Costa Crociere, the terms of the ticket for cruises outside the United States requires passengers to file suit in Genoa, Italy, which makes it extremely difficult for them to pursue their claims.

The big question going forward, though, is not whether the passengers and crew members injured or killed as a result of the Concordia disaster will be compensated in some fashion – Costa Crociere has reportedly offered to pay $14,000 to passengers who sustained no physical injuries – but whether they will be compensated fairly. Most maritime personal injury attorneys, including myself, believe the answer is no, given the legal hurdles both passengers and crew members face as a result of where they will be required to litigate. This is not to say that both Costa Crociere and Carnival do not have an interest from a public relations standpoint in settling cases involving the Concordia for a fair amount, since their image is critical to attracting new passengers and retaining old ones. However, given the magnitude of the catastrophe and the apparent recklessness of the captain, it seems unlikely that Costa will pay anything close to full value on any of these cases.

For one thing, based on the evidence that has come out so far, attorneys for injured passengers and crew members would almost certainly have a basis to seek punitive damages against Costa. However, such damages are likely unavailable under Italian law, which a court in Italy would probably apply if the cases were tried there. For another, general maritime law in the United States would permit passengers and crew members to seek emotional distress damages, which given the circumstances of this case, would almost certainly be substantial. (It is hard to imagine anyone not being justifiably traumatized by being on board a sinking cruise ship. Think Titanic). It is unclear whether courts in Italy would allow recovery for these damages, but the consensus among maritime attorneys is that even if plaintiffs could bring their cases in Italy – a questionable proposition, since Italian law does not allow for contingent fee representation – the damage awards are likely to be smaller than in the United States.
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With 11 confirmed deaths and at least 20 people still missing, the Concordia cruiseship disaster continues to garner attention from the international press and public. In the immediate aftermath of the Costa Cruise disaster, images of the listing cruise ship are everywhere you look. The media continues to present up-to-the minute details of the search and rescue efforts. It seems with each passing day, more controversy comes to light and new investigations and lawsuits are opened.

And although the impact on Carnival Corporation, the owner of Costa, is uncertain, the future of the cruise industry does not appear to be a mystery to many cruise industry experts.

According to The New York Times, January is the beginning of the cruise industry’s peak season, as it is the time when the cruise lines typically book a third to half of their reservations for the entire year.

Despite the tragedy, most predictions about the future of the cruise industry are optimistic. According to The New York Times, experts say the Costa tragedy has not caused an increase in passenger fear and that the Costa tragedy will have no long-term impact on the cruise industry. According to The Huffington Post, other experts doubt there will be any impact on demand, while others still predict a blitz of price slashing by Carnival followed by an uptick in sales.

By most accounts, it seems likely that the cruising public will continue to fill the ships in spite of the Costa tragedy. The Costa tragedy has, however, underscored just how important it is that passengers know their legal rights in the event that tragedy should strike.

Most cruise ship passengers are unaware of the restrictions placed on their right to sue when they are injured on a cruise ship. The majority of cruise lines, including Costa Crociere, have clauses in their tickets which specify where and when injured passengers can file suit. These clauses typically provide for a shorter statute of limitations (usually one year), and require passengers to file suit in a particular court or jurisdiction. In the case of passengers who were injured or died on the Concordia, they are unlikely to be able to file suit in the United States because the terms of their passenger ticket reportedly require them to file suit in Italy. Although there has been some discussion in the maritime legal community as to whether the forum selection clause would be enforceable against United States citizens because the accident appears to have resulted from reckless, rather than negligent conduct, on the part of the ship, this argument has yet to be tested, and if successful, would be the exception to the rule. In all likelihood, passengers who were injured or died on the Concordia will likely be forced to file suit in Italy, rather than in the United States, which will significantly impair their ability to recover money (although given the evidence that has come out so far about the accident, Costa may well want to settle these cases to avoid any additional negative publicity).
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