autumn 2015 hilldickinson.com/marine Norovirus not a ‘defect in the ship’ Page 3 London International Shipping Week Pages 8 - 16 When personal guarantees bite Page 18 marine, trade and energy Hill Dickinson a key player in London International Shipping Week 2015 London International Shipping Week (LISW) 2015 built on the success of previous years, offering a stellar line-up of events with something of interest for everyone involved in the maritime world. Hill Dickinson was proud to show its support as a LISW sponsor, underlining its role as one of the top international law firms in the industry. The grand opening was held at the London Stock Exchange on Monday 7 September where Hill Dickinson joined Robert Goodwill, Parliamentary Under Secretary of State at the Department for Transport, and key members of the steering committee, together with other LISW sponsors, to launch a busy programme of events. One of the highlights was Hill Dickinson’s seminar: ‘Marine Casualties: Managing the Operational, Commercial and Legal Risks’ held at the firm’s City of London offices in The Broadgate Tower on Tuesday 8 September. A full report of the seminar and a summary of the papers presented by an impressive range of speakers appear in the pages of this newsletter. That same evening, Lancaster House hosted a spectacular welcome reception for LISW in the presence of Her Royal Highness The Princess Royal. Wednesday 9 September saw The Broadgate Tower hosting another Hill Dickinson seminar: ‘The Commodities World Today’ featuring the firm’s highly regarded commodities team and other guest speakers. A report on the speakers and topics covered also appears in this newsletter. Later that afternoon, Hill Dickinson representatives joined other senior shipping figures for afternoon tea in the Locarno Room at the Foreign Office with the UK shipping register and shipping minister, Robert Goodwill. In keeping with tradition, Thursday was allocated to the all-day LISW Conference followed by a champagne reception and gala dinner held at the Grosvenor House Hotel, Park Lane. Hill Dickinson was pleased to play its part as sponsor to such a key event in the shipping calendar and to be able to contribute to the success of LISW 2015. We look forward to similar success at the next LISW in 2016. 2 Contents 1 2 3 5 6 8 9 10 11 12/13 14 15 16 16 17 17 18 19 19 20 22 23 23 24 24 Hill Dickinson a key player in London International Shipping Week 2015 New starters Norovirus not a ‘defect in the ship’ Hill Dickinson norovirus seminar Why does the choice of seat in international arbitration matter? ‘We have demoted experience and have forgotten about prudence’ ‘Limit the damage before you worry about why it happened’ ‘Time is money’ SOSREP - a one-stop shop LISW event photos Criminal prosecution for innocent accidents “COSTA CONCORDIA” - the parbuckling project The Commodities World Today Jack Hatcher speaks at Lloyd’s Save the date Hill Dickinson offers half-day port seminar When personal guarantees bite Hill Dickinson sponsors 2015/16 Clipper Round The World Yacht Race Edward Hicks Collective actions - ‘Opt-out’ is the new ‘in’ BUSINESS ALERT - new Package Travel and Assisted Travel Arrangements Directive Trainees raise funds for children’s hospital Hill Dickinson and Crawford & Company join forces to address clandestine entry into the UK Nick Phillips helps Shipwrights steer to a podium place in City Go-Kart Grand Prix Hong Kong office contributes to leading arbitration law journal Hill Dickinson is pleased to welcome the following specialists to their legal line-up who have joined the firm this year: Captain Joe Quain Hill Dickinson is pleased to announce that Captain Joe Quain, formerly of Bentleys Stokes and Lowless, joined the firm as a partner in the Singapore office on 1 September 2015, bringing the firm’s strength of master mariner lawyers to six in total. Tony Goldsmith, partner and master mariner who heads the Singapore office, commented: ‘As a solicitor and master mariner of 20 years’ experience, Joe’s expertise in all aspects of admiralty work can only strengthen our existing commitment to provide our clients with the highest standard of legal advice.’ Patrick Hawkins, Hill Dickinson’s head of global shipping, also welcomed his appointment as a significant addition to the firm’s offering: ‘Joe embodies all the qualities our clients have come to expect from Hill Dickinson, combining legal and seafaring expertise with a practical, client-focused and commercially pragmatic outlook.’ New starters Bryan O’Hare Hill Dickinson also welcomes a further boost to our Asia team with the advent of commercial and insolvency litigation specialist, Bryan O’Hare, as a partner in our associate firm in Hong Kong, Laracy & Co. Bryan has extensive experience in all aspects of dispute resolution where he has earned a reputation for handling difficult commercial and insolvency related disputes. He has particular experience of borrower default actions, insolvencies, receiverships, fraud, breach of fiduciary duties by directors and officers, shareholder disputes and professional negligence claims. Bryan also has considerable experience of managing multi-jurisdiction litigation including PRC cross-border disputes and insolvencies. Hill Dickinson’s managing partner, Peter Jackson, commented on Bryan’s appointment: ‘We are delighted to welcome Bryan to the firm. He brings with him a wealth of experience, and his appointment will further strengthen our highly regarded commercial litigation practice in Hong Kong.’ marine, trade and energy autumn 2015 Norovirus not a ‘defect in the ship’ - Hill Dickinson cruise experts win key judgment for the industry Whilst Nolan -v- TUI UK Ltd 2015 is a first instance decision, its importance cannot be overestimated. The case demonstrates that there is at last a sign of recognition by the courts that cruise operators are not liable for norovirus outbreaks if they implement the industry standard plans and take the necessary measures to manage the illness and bring it under control. This decision will assist cruise lines and their insurers to defend such claims which can cost the cruise industry many thousands of pounds per annum. Hill Dickinson can report that a number of norovirus/gastrointestinal claims that we are currently defending have already been withdrawn, following our recent case where we successfully defended a class action brought by 43 claimants for personal injury and breach of contract. The claims arose from an outbreak of gastroenteritis on board the cruise ship “THOMSON SPIRIT” which had been chartered by TUI UK Limited and operated by Louis (now Celestyal Cruises). The outbreak occurred on cruise 9, a voyage from Ibiza to Newcastle, in 2009 affecting at least 217 of the 1700 passengers as well as a small number of crew. 28 of the claimants alleged that the infection was bacterial while 15 more sued for damage and disappointment as a result of various claims for breach of contract. As well as arguing that the outbreak was a bacterial infection caused by negligence on the part of the performing carrier, the claimants also argued that there was an implied term in the contract of carriage requiring the defendant to warn them in advance of the cruise of ‘known, significant, previous existing or continuing episodes of illness or infection on board the ship … and thereby give them an opportunity to cancel or defer their cruise holidays.’ It was further claimed that under Article 3.3 of the Athens Convention 1974 ‘Fault or neglect of the carrier shall be presumed, unless the contrary is proved, if the personal injury to the passenger arose from or in connection with a defect in the ship.’ The argument here was that the contamination of the structural fabric of the ship with norovirus from the previous cruise constituted precisely such a defect. On the previous cruise from Newcastle to Ibiza, cruise 8, there were 18 cases of norovirus which the defendant argued had been managed effectively and the ship did not have a reportable outbreak which requires two per cent of passengers and/or crew (three per cent under VSP) to be ill. The claimants argued that Louis had failed to carry out a proper ‘deep clean’ of the vessel before allowing them to embark and had not warned them in advance of the possibility of their contracting the same illness on the cruise that was the subject of this litigation. The judge, Mr D Mitchell, heard evidence from both the ship and eight of the claimant passengers as well as expert witnesses including a gastroenterologist and two microbiologists. He concluded as a matter of fact that the illness on board cruise 9 was norovirus rather than campylobacter (allegedly caused by poor hygiene on board) as claimed. The judge relied on the lab reports which were positive for norovirus and negative for the four common bacterial infections associated with food including salmonella and E. coli. The court also found that the virus was most likely brought onto the ship by passengers. At least one passenger reported his symptoms commenced within hours of joining the vessel. The numbers of illness were indicative of a person-to-person spread and the epidemiological graph demonstrated the timeline of infection relative to the commencement of the cruise. According to the experts this was also clear evidence that the outbreak had been well managed. On considering the records and oral evidence (including that of the claimants) relating to implementation, the court held that the company, its officers and crew had implemented the on-board systems for controlling the outbreak even beyond the levels required for the scale of reported illness. In reaching this finding, the court was able to consider the reports and oral evidence of an independent external specialist company which audited the vessel’s implementation of its systems during the outbreak. The report of the authorities which inspected the vessel in Newcastle was also available which concluded that the vessel had fully implemented its systems, and went so far as to comment that these were the best they had seen. >>> continues on page 4 3 4 As well as the findings of fact, the case also considered interesting issues of law. As the bookings were made in the UK, the Athens Convention 1974 governed the claims for personal injury to passengers for international carriage by sea. Article 3 (3) of the Convention reverses the normal burden of proof where there is a grounding, fire, collision, stranding etc. or where the injury is caused by a ‘defect in the ship’. However, unlike the 2002 Protocol and the PLR (EU 392/2009) the 1974 Convention does not define ‘defect in the ship’. The claimants argued that if the ship were found to be contaminated with norovirus from the previous cruise, then this constituted a ‘defect in the ship’ under the terms of the Convention. The carrier argued that the presumption of liability applied to marine perils and matters of a navigational nature and not to allegations concerning the implementation of food, hygiene or of the hotel department policies and procedures. This argument was accepted by the court. Mr Justice Mitchell took the view that ‘defect in the ship’ is, therefore, limited very much to the structure of the ship, drawing a clear distinction between ‘a typical maritime peril’ and something which could have happened onshore. He went on to find that, to claim that the presence of norovirus was a ‘defect in the ship’ was not so much to extend the language of the Convention, but to distort it beyond recognition. It should be noted that this finding will only be relevant to Athens Convention 1974 cases involving cases relating to death and injury or illness which occurred before 31 December 2012 or to all domestic sea carriage to which the 1974 Convention still applies in the UK. The PLR and the 2002 Protocol which came into force in 2012 and 2014 respectively define ‘defect in the ship’ as ‘any malfunction or failure in equipment, hull, structure, machinery or systems used for propulsion, steering… means of passengers’ escape,’ which is an even narrower meaning than that accepted in this case. However, notwithstanding this finding on the legal issues, the court also found that there was no fault or neglect on the part of the carrier in its handling of the illness on cruise 8. Another significant part of the judgment was the decision by the judge that, in accordance with the 1997 Supreme Court case of Sidhu -v- British Airways plc, the 1974 Athens Convention is the exclusive remedy available to claimants travelling by sea for personal injury. (The Sidhu case dealt with carriage by air, but the deciding principle was also found to bring carriage by sea within the Convention.) This meant that the claimants had no available remedy in common law as an alternative and therefore, if the judge had not rejected the allegations relating to failure to warn on the facts of this case, the claimants would not have a remedy within the Convention. The judge dismissed the claimants’ argument that the Convention permitted them to bring a claim for personal injury suffered on the ship where the fault occurred prior to boarding i.e. contamination with norovirus from the previous cruise which had not been eradicated through a deep clean. (In fact, what constituted a ‘deep clean’ was never established.) As in the case of Sidhu, the judge’s decision is significant for the cruise industry in that, as a matter of law, the fault or neglect argued must occur during the carriage. The court also held on the facts of this case that there was no duty to warn passengers as there could be no criticism of the handling of the illness involving 16 passengers and two crew on the previous cruise 8. He found that the enhanced housekeeping measures and other measures required that the outbreak control plan had been put into effect satisfactorily and that the defendant had discharged its duty of care to the claimants. A successful appeal on the Sidhu point would not, therefore, have made any difference to the outcome in this case. Maria Pittordis, head of marine, trade and energy, acknowledged the importance of the decision: ‘The judgment is the first claim of its type to be successfully defended at trial in the UK. It is of great importance to the cruise industry in recognising that norovirus is not caused by the ship and that even with high levels of implementation of industry procedures, outbreaks of norovirus do occur.’ >>> continued from page 3 5 marine, trade and energy autumn 2015 Hill Dickinson norovirus seminar updates cruise industry following landmark win in Nolan Following their recent success in the case of Nolan -v- TUI UK Ltd, Hill Dickinson hosted a seminar on 25 September to discuss scientific, operational and legal issues which arise in the management of norovirus on board cruise ships. The event was wellattended by cruise operators and their insurers. Speakers included Dr Peter Cowling, the expert microbiologist in the case, which was the first UK multiparty action to be successfully defended by a cruise operator in the UK. Other speakers included Sarah Barnes and Maria Pittordis of Hill Dickinson who acted for TUI in Nolan, Kate Bunyan, medical director, Carnival UK, and speakers from Celestyal Cruises (Pambos Skapoullis and Christos Hadjipetris). She also welcomed the finding of fact in favour of the carrier: ‘The court accepted that the systems on board had been fully implemented by the officers and the crew to bring the virus under control, and was influenced by the documentation produced to support the case, the fact that Louis tested for pathogens, and the deployment of systems that were beyond the levels required for the numbers of illness. This was a great example of team work between owners, charterers, external health hygiene auditors, the authorities and lawyers’. She also added that without the support of the Club (West of England) this case could not have proceeded to trial. The claimants were given until the 11 September to seek permission to appeal, but given the overwhelming documentary and oral evidence accepted by the court in its findings of fact relating to implementation, it was hard to see how this judgment could be overturned and, in fact, no appeal has been lodged. The cruise industry can now draw a great deal of comfort from the judge’s findings both in law and in fact and face defending any such future claims with increased confidence. Maria Pittordis firstname.lastname@example.org 6 Arbitration is now almost certainly the most popular way to resolve international disputes. As its popularity has grown, an ever-increasing number of countries have sought to secure a share of the market through reform of their arbitration laws and the establishment of arbitral institutions. There are now therefore a wide range of new arbitration centres (or ‘seats’) to choose from, particularly in Asia, in addition to those that have traditionally dominated the market (London, Paris, New York etc.). Deciding on the seat of an arbitration matters because, when you choose the seat of an arbitration, you are choosing its legal home. Unless you have agreed otherwise, it is likely that the laws and regulations of the seat will provide the legal framework within which any arbitration will take place. For example, if your contract provides for ‘London arbitration’, the arbitration will be seated in London and conducted in accordance with the arbitration laws of England and Wales (in particular, the Arbitration Act 1996). In spite of efforts on an international level to harmonise arbitration laws, significant differences between countries remain. In addition, the attitude of national courts to arbitration can vary substantially from country to country. Why does the choice of seat in international arbitration matter? Five key factors to consider when choosing the seat 2. Party autonomy v mandatory laws One of the great attractions of arbitration, particularly over litigation, is the freedom that it gives the parties to choose who resolves their disputes and the rules that will govern the conduct of the proceedings. Some, however, may not be aware that their choices will only be respected if they do not conflict with the mandatory laws of the chosen seat. In centres generally considered to be arbitration-friendly such as London or Singapore, the laws that govern international arbitrations impose very few mandatory requirements, leaving the parties largely free to decide how they want their arbitrations to be conducted. In other, less arbitration-friendly jurisdictions, a wide range of mandatory rules impose considerable constraints on the way the arbitration is conducted. For example, some require the parties to be represented by local lawyers, or impose conditions on the eligibility of arbitrators, both of which can jeopardise the neutrality of the arbitration. Fraser Hortop of Hill Dickinson’s Singapore office looks at some of the advantages and pitfalls in choosing the right forum for arbitration. 1. The venue The seat of arbitration should not be confused with its venue. Whilst the seat is the legal home of the arbitration, the venue is the geographical location in which hearings and other events in the arbitration process take place. The seat and venue do not necessarily have to be the same. In fact, the venue (unlike the seat) is often influenced by matters of convenience and cost. As an example, the parties to an oil terminal agreement may choose to seat the arbitration in London but hold all of the hearings in Aberdeen, on the basis that Aberdeen is close to the terminal, relevant documents and witnesses, and is therefore a more cost-effective venue. Even if all hearings take place in Scotland, the arbitration is subject to English arbitration law by virtue of its being seated in London and the tribunal’s award will be deemed to have been made in London. 7 marine, trade and energy autumn 2015 Why does the choice of seat in international arbitration matter? 3. Supportive v interfering courts The choice of seat dictates which country’s courts will exercise supervisory jurisdiction over the arbitration. English arbitration law, for example, recognises party autonomy and grants the English courts a wide range of powers to step in and support an arbitration if requested, including the power to grant injunctions to support the jurisdiction of the tribunal, compel witnesses to attend arbitral hearings or require evidence or assets to be preserved. These powers give the arbitration teeth - without them, it may prove difficult to control an uncooperative party and ensure the orderly conduct of the arbitration. Parties may also wish to avoid seats in which national courts are known to take an inappropriately hands-on approach, which can slow the process down, increase costs and erode party autonomy. 4. Finality v appeal Unless the parties have agreed otherwise, the laws of the seat determine whether, and to what extent, an award can be challenged. The position varies significantly from country to country. For those who seek finality and wish to avoid potentially costly appeals, a seat that offers very limited (if any) rights of review may be preferable. For others, the opportunity to appeal an award may be an important way of hedging against the risk of an unfavourable decision. This may be particularly important for parties to a high risk contract. 5. Enforcement There is no merit in spending large sums of money pursuing a claim in arbitration only to find out that your award is effectively worthless because of the seat in which it was made. Before you choose the seat of arbitration, first identify the main jurisdiction(s) in which your counterparty has assets; if your counterparty refuses to honour an award, you may need to enforce that award against its assets there. The goal of the New York Convention 1958 was to achieve the recognition and enforcement of foreign arbitration awards between nations. Over 150 countries are now parties to the Convention, although some (most notably for clients in the energy industry, Iraq, Libya and Turkmenistan) are not. If a country is not a party to the Convention, its courts may not recognise or enforce an arbitration award against assets within their jurisdiction. Even if the country in which you seek to enforce your award is a party to the Convention, it may have made what is called a ‘reciprocity reservation’ when it became a party, meaning that its courts will only enforce your award if it was made in a country that is also a party to the Convention. In considering these key factors it will now be evident just why the choice of seat in international arbitration matters. The advice is clear: whenever you have the opportunity to choose the seat of arbitration, give careful consideration to its consequences - in particular to the effect it will have on the conduct of the arbitration, and the finality and enforceability of any award. Fraser Hortop email@example.com The following is a summary of his observations, introducing what was to be an interesting day full of insights focussing on all aspects of marine casualties today. Mr Grey advocated a return to the old-fashioned values of prudence, seamanship, expertise and professionalism as a way of addressing the way in which risks in the maritime industry are evolving. Although today we live in a riskadverse society, Mr Grey noted, past generations have perhaps not been so careful. However, they did appreciate the concept of risk mitigation: they understood that ships could be hazardous places and therefore did not court danger, not because they were prohibited by some gigantic rule book or regulations, but because they had been trained not to do so. Nowadays, however, it seems that safety management has become an arm of bureaucracy rather than something founded upon common sense and seamanship. People now believe that risk, which is a feature of any maritime adventure, has been completely eliminated; thus, if there is an accident in what is misguidedly supposed to be a risk-free industry ‘We have demoted experience and have forgotten about prudence’ then this is intolerable - somebody must be to blame and should be punished, preferably by criminal sanctions. We remain conscious that risk is still part of every sea voyage but the sheer size of ships and their powerful machinery have increased our faith in technology. As a result, even if we still fear the risks involved, we now ask people who operate ships to perform increasingly risky manoeuvres. For example, we see fully laden VLCCs coming into port with 18 inches of water under the keel or masters of colossal cruise ships getting as close to the shore as possible to afford their passengers some ‘visual excitement’. It is the case, therefore, that, even though risk-taking is no longer generally accepted, some risks which are deemed ‘commercially acceptable’ must be tolerated. Unfortunately, as the expectations of people ashore are becoming ever more unrealistic, there are those who will secondguess the ship’s Master although they will not ever have taken on or have any real understanding of a Master’s responsibilities. We have demoted experience and have forgotten about prudence; we also accept too readily that those who make errors of judgments should be subject to criminal sanctions. Although it is true that there have been less serious casualties in the recent years, the cost of some of them has been exceptionally high (see for instance the Macondo oil rig blow out of 2010 and consequent spill which could eventually cost US$56 billion). It can be seen then, that even though our technology has improved, the risks involved have also evolved and increased, and our attitudes and approach to regulations should acknowledge this evolution and modernise accordingly. In this context, therefore, more weight should be given to the old-fashioned values such as prudence, seamanship, expertise and professionalism instead of the belief that we can reduce our exposure to hazard by endless regulation and prosecuting those who make mistakes. 8 Hill Dickinson’s London International Shipping Week (LISW) seminar: ‘Marine Casualties: Managing the Operational, Commercial and Legal Risks’ opened with a keynote speech by the chairman, Michael Grey, (former editor of Lloyd’s List) which focused on the maritime industry’s challenge in reconciling the growing intolerance of any form of accident with the demand for performance and predictability in any marine adventure. ‘Limit the damage before you worry about why it happened’ 9 marine, trade and energy autumn 2015 Hill Dickinson’s Ian MacLean directly addressed the legal considerations for the Emergency Response Team (ERT) following a casualty, and the perils and pitfalls of evidence gathering and managing the practical and legal aftermath. The first considerations for any operator following a casualty must be the mitigation of physical loss through deployment of that operator’s ERT, commercial loss and potential reputational damage. However, while these are essential from a business standpoint, a close eye should be kept on the handling of those factors, which may have to be disclosed as evidence in any future legal action. Ian’s key risk management message was that ‘a lack of understanding by individuals who have no knowledge of the risks presented by their actions is the worst of all risk management worlds’. Ship operators are seldom experienced litigators and so are less aware of the obligations and risks imposed by the law. Fortunately there are experienced litigators who are also experienced mariners and, like Ian, ship managers. Engaging that experience early in the aftermath of the casualty can make the difference between successfully defending or settling a claim and being caught wrong-footed with significant financial and commercial consequences. The first essential aim in the early stages following a casualty should be to address mitigation rather than causation. The message here is: ‘limit the damage before you worry about why it happened’. However, it is important to remember that all evidence that accrues from the time of the casualty onwards is likely to be disclosable and therefore care should be taken from the outset to ensure that such evidence is gathered with that in mind. Ian identified two categories of evidence in the early stages: knowledge and documentary. As soon as knowledge evidence is recorded in any way, it immediately becomes documentary and liable to be disclosable. For this reason, the taking of statements and the recording of such verbal and other evidence must be handled carefully to ensure forensic robustness. There is an obligation to disclose documents even if they adversely affect one’s own case and/or support another’s case. For these purposes, ‘documents’ include electronic files. This obligation remains continuous until the matter is finally settled either by agreement or in court. However, this obligation is not absolute but is subject to some qualifying criteria such as proportionality and reasonableness, relevance and privilege. Knowing when these qualifications apply is also essential. Looking at the category identified as ‘knowledge evidence’, the dangers inherent in translating this into ‘documentary evidence’ become clear. Witnesses can be fallible, they often try to be helpful and provide more information than is necessary; they offer opinions, make assumptions; they are unaware of what issues are material and what non-material which can lead to misdirection, displacement of blame and weaknesses in the statement that can provide a rich source of material for opponents. These dangers are magnified when documents are prepared by witnesses or inexperienced investigators who lack awareness of the risks involved. In light of all these legal implications that lie behind so many of the actions taken in the aftermath of the casualty it is, therefore, essential that any ERT gives itself an evidence ‘health check’ and ensures it has procedures in place to control statements, documents, investigations, reports, communications, press releases, preservation of evidence and management of any witnesses who will be required to make statements to the authorities. With the right expertise and the right knowledge brought in early in the aftermath of the casualty, all these things can be managed to mitigate the risks involved and ensure the ERT achieves the best possible outcome in the long term. Ian is a master mariner who served 12 years at sea, following which he spent six years in a senior role with a major shipmanager in Cyprus, covering the marine superintendency, ISM, emergency response and accident investigation functions. 10 Mike Mallin, who heads up Hill Dickinson’s Hong Kong office, picked up on some of the points touched on in Ian MacLean’s presentation and offered a detailed look at some of the other practical considerations following a casualty, and the ways in which involving experienced legal advice early can expedite the return of a vessel to service. In a presentation entitled ‘Managing the Authorities to Minimise Detention’ Mike addressed the many practical and legal problems that need to be solved when dealing with a casualty within territorial waters or in bringing a casualty into a port of refuge. Opening with the premise: ‘Time is Money’, his focus was on navigating the red tape and procedures that face an owner in these circumstances. By way of example, he looked at a case in which he had been closely involved from the outset: the “APL PANAMA” which grounded off Ensanada, Mexico. The list of parties who became involved illustrated the complex practical and legal issues triggered by such an event. The list was impressive, if daunting: • the Navy • SEMARNAT, the Mexican environmental agency • the local authorities and town council • the governor of the local province • the local tourist authority • Greenpeace • the police • the fire authority • the Customs • the harbourmaster • the Port Committee • the various central government ministries • the lawyers representing some of these bodies Their involvement ranged from ‘very helpful and practical’ to ‘destructive, illinformed, and difficult!’ The first question Mike addressed was: ‘is there a choice of port?’ Often there is, but factors to consider are whether or not there are any ‘political’ factors, whether or not there has been any pollution and if a potential port takes a ‘home town’ approach to the rule of law. Many countries would require a power of attorney before anything can be done locally on behalf of a ship. Identifying a local correspondent or lawyer and obtaining the appropriate local wording can be an essential first step in getting things moving. Many ports also require security before they will permit a damaged ship to enter. Again, practicalities including wording have to be negotiated together with the form of security. The Club will have been involved by this stage but there are other technical issues that need to be addressed. It is also wise to involve Class as soon as practicable and consider appointing a specialist consultant if necessary e.g. a fire expert. However, restrictions may apply to the use of external specialists, local facilities may be limited; all of which should be looked into as soon as possible, ideally before arrival. Ports will have their own requirements. These may include a risk management plan, but even if this is not required it can still prove helpful and, again, is something that can be prepared at sea to avoid delay. The key to the smooth running of the operation is to identify the important people who can enable or prevent things happening - the harbourmaster is likely to be one of these - and establishing just where they are (this can be crucial on, for example, Friday afternoons, weekends or public holidays). Are there any problem activities that may affect the use of the port? For example, there may be a regatta or a local yacht race using the channel along which the ship needs to make its approach. Finding out what these relevant parties require in advance can save valuable time. It may also be possible to facilitate their involvement by providing relevant ship’s documents in advance, arranging a timetable and, if necessary, providing facilities such as locating rooms in a local hotel for meetings, interviews etc. and sourcing translators and stenographers. If there has been a fatal accident or an incident involving pollution, the involvement of state and local authorities will be elevated. It can be helpful to work with these in advance. Mike gave the example of one case where sitting down with the local police for a three-hour briefing meant they had a head start on their investigation the next day allowing the ship to sail that night. But dealing with local authorities and other third parties are not the only concern. Casualties often give rise to commercial disputes, which require other legal aspects to be considered. Often there is no choice of port, but, if there is, factors to bear in mind include: where an arrest may be more likely, how long it may take to arrange an arrest and how quickly release can be achieved, whether or not the limitation of liability is a factor, and the kind of security that will be acceptable. ‘Time is money’ 11 marine, trade and energy autumn 2015 Mike concluded his presentation with a salutary look at the provisions of the UK Bribery Act (FCPA in the US) and how, in the case of the “IRENE EM”, internal emails of the UK-based consultants representing London underwriters referred to ‘suitably greasing the authorities’ and ‘administrative charges’. While this may have been simple advice relating to the facts of life in the locality of the casualty (Mumbai) rather than encouragement to pay bribes, in court the consultant’s senior managers were severely reprimanded by the judge and narrowly escaped formal sanctions. This was a large amount of detail compressed into 30 minutes, but it served to show the complexities and the many practical and legal factors that have to be anticipated and dealt with in the aftermath of a casualty, and how getting experienced experts such as Ian and Mike involved early can save time and money, as well as sparing all those parties who want to see the vessel back in service as soon as possible a lot of headaches down the line. The role of the SOSREP is to act on behalf of the Secretaries of State for Transport and for Energy and Climate Change in removing or reducing the risks to persons, property and the UK environment resulting from incidents involving ships, fixed or floating platforms or sub-sea infrastructure within UK waters, the remainder of the EEZ/UK pollution control zone and on the UK continental shelf. In performing its mandate, the SOSREP is free to act without recourse to a higher authority. In the words of Mr Shaw, the SOSREP is a ‘one-stop shop’ and the government has to ‘back him or sack him’ when decisions are made. Mr Shaw argues that it is the existence of this mandate, and not necessarily its use, which has made the SOSREP a success. This stems from the fact that ship-owners and salvors, in the majority of cases, want to save the vessel. Knowing the SOSREP’s mandate, they will therefore seek to cooperate with the SOSREP to achieve their aims. One of the support mechanisms for cooperation is the Salvage Control Unit (the Unit), which assembles all relevant parties to maritime casualties. As well as facilitating discussions between the parties, the Unit also provides the SOSREP with an avenue for state intervention, if needed. The success of the SOSREP system is illustrated by incidents such as the “MSC NAPOLI” and the “MSC FLAMINA”. In relation to the “MSC NAPOLI”, Mr Shaw highlighted the difficult decision SOSREP made to beach the ship on an area of outstanding natural beauty in order to prevent significant wider pollution. The “MSC FLAMINA” was one of the incidents that led the EU to reconsider its framework for coordination and cooperation between Member States when dealing with places of refuge. This rethink led to the creation of a set of operational guidelines. These were drafted with the intention of creating a robust process, which in turn would enable well-advised and effective decision-making. The relevant industry sectors provided important input throughout the drafting process. The guidelines direct each Member State involved in an incident to examine the ability to provide a place of refuge to a ship in distress. This approach is based on the idea of ‘no rejection without inspection’, which essentially means a Member State cannot refuse a ship in its waters without surveying it first and providing a reasonable explanation for denying it access. Overall, Mr Shaw was of the view that, although these guidelines will not bring about instant change, their reception illustrates a willingness to reform the current system. Whether a reformed EU approach is something which can be adopted elsewhere remains to be seen. What is clear is that the UK has developed a strong and comprehensive system for dealing with accidents at sea, in which all parties involved collaborate towards reaching an outcome for the greater good. The presentation by Hugh Shaw, the Secretary of State’s Representative for Maritime Salvage and Intervention (SOSREP), at the Hill Dickinson LISW seminar on marine casualties, focused on the authority and responsibility of the SOSREP in relation to environmental protection and simplification of the decision-making process when dealing with places of refuge. Additionally, Mr Shaw considered UK and EU perspectives on places of refuge. His conclusion was that, whilst the UK has significant experience in dealing with places of refuge incidents, change is needed at an EU level. There is, however, both willingness and determination within the EU to improve the current approach to places of refuge. SOSREP - a one-stop shop Mike is a master mariner with 12 years’ seagoing experience and a degree in Maritime Studies (Tech). In over 30 years’ practice as a shipping lawyer, he has handled many casualties. Mike acted for the successful assured in the “STARSEA”, which is still the leading case on the duty of good faith in the marine insurance context; for the salvors in the largest Lloyd’s Open Form salvage arbitration award ever obtained; and recently for the owners of the “COSTA CONCORDIA” and their liability insurers in relation to that vessel’s grounding and capsize. In May 2012, he was listed by Tradewinds as one of the world’s top five lawyers for shipping emergencies and in December 2013 he was named in Lloyd’s List’s ‘top 100 most influential people in the shipping industry’. 12 Maria Pittordis at the LISW grand opening with Robert Goodwill MP, Under Secretary for Transport Mike Mallin (right) Partner, Hill Dickinson Michael Grey Former editor of Lloyd’s List George Chalos Chalos & Co, P.C. Ian MacLean Partner, Hill Dickinson 13 marine, trade and energy autumn 2015 Maria Pittordis at the LISW grand opening with Robert Goodwill MP, Under Secretary for Transport Mike Mallin (right) Partner, Hill Dickinson Hugh Shaw SOSREP Captain Nick Sloane (centre) Sloane Marine Jeff Isaacs Partner and head of commodities, Hill Dickinson 14 Picking up on the theme of Michael Grey’s keynote speech, George Chalos of Chalos & Co, P.C. gave delegates a lively, if disturbing account of the growing trend towards criminalisation within the maritime industry from the perspective of current legislation and practice in the United States. Criminal prosecution for innocent accidents Unlike most other criminal offences where a person must act with criminal intent (mens rea), in the USA, a series of statutes have been introduced that criminalise negligence applying a regime of strict liability. The US authorities aggressively investigate any maritime accident or pollution incident with the outcome that criminal charges may be filed, not only against individual defendants, such as the crew members or corporate officers of the company owning or operating the vessel, but also against the company, the operator and/or the managers of the vessel. Mr Chalos took the conference back to 24 March 1989 from which date he examined a series of cases evidencing an increase in the likelihood of criminal prosecution for innocent accidents. One such case was that of Captain Wolfgang Schröder who was guiding the 1,150teu “ZIM MEXICO III” out of the port of Mobile on 2 March 2006 when the bowthruster failed. The vessel hit a gantry crane onshore, causing it to collapse on an electrician who later died. Captain Schröder was arrested when the ship later called at Houston and charged with criminal misconduct under the US Seaman’s Manslaughter Act. But, as Mr Chalos went on to illustrate, it is not just the crew that can be criminally liable, there is also corporate liability for the vessel owners and managers and, importantly, individual liability for corporate officers within those companies under the ‘responsible corporate officer’ doctrine. This is complicated by the US government operating a reward based system for whistle-blowing with the whistle-blower crew member receiving up to half the fine paid. This practice obviously raises issues of incentive and reliability of the witness as was demonstrated in an infamous magic pipe case involving the “GEORGIOS M”. In this case, the company pleaded guilty to criminal charges relating to an oily water separator by-pass pipe leaving their chief engineer, Mr Mylonakis, facing various related criminal charges. Mr Mylonakis robustly defended these and was vindicated when the court found the whistle-blowers not to be credible and to be motivated by revenge against the company for an unrelated incident. Finally, Mr Chalos investigated the problem of how an incident can be seriously exacerbated through attempts to cover up, or otherwise limit the information about what caused the incident in the first place. This is a separate criminal offence, which also includes false statements/information and witness tampering. This is a powerful tool of the US law agencies investigating oil spills, MARPOL and ISM violations, and the threat of the consequences of providing a false statement can act as leverage for ‘flipping’ crew members to give evidence against their employers. The advice, therefore, is that an owner, operator and/or manager of a vessel is candid and forthright in advising coastguard officials of any known ISM or vessel deficiencies, and/or pollution incidents that may have occurred while entering or while within a US port. A clear and comprehensive compliance program for the company and its vessels should be prepared and followed, and crew and employees should be made fully aware of US environmental regulations and requirements together with the proper implementation of clear and detailed reporting procedures. 15 marine, trade and energy autumn 2015 Tasked with the objective of removing the wreck in one piece with minimal risk and environmental impact whilst also ensuring the protection of Giglio’s economy and tourism industry, the team from TITAN Salvage and Italian offshore service provider Micoperi set about planning a multi-phase operation which went on to take two and a half years to complete and at a cost that exceeded the original price of building the vessel in 2004. The operation involved five phases, each of which had its own challenges and setbacks: Phase 1 involved the establishment of a holdback/anchoring system to stabilise the vessel and prevent it from slipping down the steep seabed. With the vessel resting at a 70-degree angle, working aboard and traversing such a sharp slope required the team to take a fourday course in mountain climbing and the operation was overseen for safety reasons by rescue climbers from the Italian Dolomite Mountains. Phase 2 involved building an underwater platform on which the vessel would be able to rest upright after its ‘parbuckling’ (rotation to an upright position) and the building of portside sponsons. To create the foundation to the platform, TITAN/ Micoperi’s dive team had to hand-place hundreds of cement-filled grout bags each the size of a residential swimming pool and among them clocked up around 100 dives per day and more than 22,000 total dives by the end of the project - the largest dive operation in history. To add to the complexity of the task, this phase of the operation took place during the worst winter on record in Giglio for 45 years. Phase 3 was the ‘parbuckling’ operation - rotating the ship to an upright position - and involved the building of two further additional tanks to support the bow of the vessel and the removal of 4,000 tonnes of sediment from the seabed to restore it to its former state, neither of which were included in the team’s original plan. Of the sheer scale of the operation, TITAN’s Captain Richard Habib noted that ‘Between the platform, sponsons and all the other heavy steel structures required for the project … 33,000 tonnes of steel was fabricated to add on - enough to build two ships’. Phase 4 involved further stabilisation to protect the vessel and the environment from further damage during the harsh winter months and the installation of 15 starboard sponsons required for the re-floating phase. By July 2014, the vessel was ready for its final phase - the re-floating operation and tow to its final destination of Genoa. On 22 July 2014, the vessel was fully re-floated and the next day was towed away from Giglio waters forever. The raising of the “COSTA CONCORDIA” is testament to the fact that with the right team, equipment, engineering and innovation, almost anything is possible. Sadly, in an era in which the size of sea-going vessels is ever-increasing and risks previously considered intolerable are becoming more commercially acceptable, this may not be the last time in which we see a salvage operation of this scale or complexity. “COSTA CONCORDIA” - the parbuckling project In spite of an intensive day of speakers and challenging topics, all our delegates remained wide awake to hear Captain Nick Sloane, the senior salvage master who led what has been described as the largest, most technically demanding wreck removal ever attempted on a ship of its size, explain the monumental operation involved in raising the stricken cruise liner “COSTA CONCORDIA” and restoring order to the island of Giglio and its protected waters. The Commodities World Today The conference brought together key decision-makers for thoughtful discussions on topical issues driving the commodities industry and garnered an appreciative audience. The event gave the Hill Dickinson commodities team an opportunity to showcase its wellearned reputation as one of the leading firms in this specialist field; in the most recent Legal 500 the team was again ranked in the top tier for Physicals where it gained praise for its ‘in-depth knowledge’. Chair, Jeff Isaacs, head of the team, welcomed delegates before going on to present the opening paper on recent developments concerning the New York No 11 sugar rules. Other speakers included Philip Wareham (Hill Dickinson), speakers from two trade associations (GAFTA and ICA), and counsel with considerable expertise in commodities issues. Jeff Isaacs commented on the day as follows: ‘The conference was a huge success. It was a fantastic opportunity for all those involved in the commodities markets to gain some insight into current legal issues and ask some important and thought-provoking questions, particularly in relation to sugar trades under No 11 Rules.’ As part of its commitment to London International Shipping Week 2015, Hill Dickinson was also delighted to host a conference entitled ‘The Commodities World Today’ as part of a busy Wednesday line up following the marine casualty seminar the previous day. 16 Meanwhile, three more commodities experts from the Hill Dickinson team were also speaking at GAFTA’s training course in Argentina on ‘Formation and fulfilment of contractual obligations’. Darren Wall, Gordon Campbell and Jean-Francois van Hollebeke all thoroughly enjoyed the event and the opportunity to discuss matters particularly affecting South American trades. For more information about prospective conferences/seminars or to register your interest please contact: Claire Messer firstname.lastname@example.org Hill Dickinson senior associate and mariner, Jack Hatcher, speaks at Lloyd’s Autumn Worldwide Programme. Launched in 2014, the Lloyd’s Worldwide Programme is designed to bring together insurance professionals from around the world to participate in a number of interactive seminars and networking activities in order to gain a detailed understanding of how the Lloyd’s market operates and to explore the diverse classes of business in which the market specialises. This year’s event, which took place in the Lloyd’s Building on Thursday 15 October, welcomed delegates from Aon, Atlantic Insurance, Willis, Marsh, Ikatan Asia, Sacam, THB, Guy Carpenter, Reasinter, Gulsoy Sigorta, ACE, Apex, Chedid Re and Locton. Jack was invited to speak on marine casualties, a key area of expertise in the firm, and his presentation, which was warmly received, focussed on these types of casualty and the claims that flow from them, as well as offering practical advice on how to handle such events when they occur. For further information on this subject contact: Jack Hatcher email@example.com 17 marine, trade and energy autumn 2015 Maritime casualties involve loss and damage. The parties involved in a casualty will almost certainly wish to bring claims or find that they are facing claims in respect of those losses. No party wants to become embroiled in costly and time consuming litigation, so the strategy should always be to settle any claim on the best commercial terms. Success or failure in settlement negotiations (or the subsequent litigation where settlement negotiations fail) can depend on the actions taken and the decisions made in the first hours and days of a casualty by any of those involved in the emergency response. This includes those on board the vessel, junior staff in the office, superintendents, emergency response teams, insurance and claims managers, DPAs, middle and senior managers. Success or failure can turn, for example, on the wording used in a Master’s statement of facts, a communication to a charterer or the choice of a port of refuge. This interactive seminar will provide a legal toolkit to identify the legal threats and suggest strategies for risk managing those threats. The seminar will also consider interaction with the authorities including the risk of criminal prosecution. No previous legal knowledge is required to benefit from this full day seminar. However those in the insurance and claims handling functions that rarely come into contact with major casualties, or wish to refresh their knowledge, will also find the content of benefit. This seminar is an essential event if you are: • Involved in the first hours of a casualty response; • The emergency response team leader; • In contact with the vessel and contractual parties following the casualty; • Part of the insurance or claims handling function; • Middle or senior management in a ship owner or ship manager; • Responsible for drafting emergency response team procedures. If you would like to receive information about the event once the programme has been finalised, including how to register, please email firstname.lastname@example.org Save the date - 25 February 2016 Managing the legal threats of a maritime casualty - A Hill Dickinson seminar Hill Dickinson’s ports team is to hold a half-day version of its successful seminars covering a range of topics which will be of interest to port operators. Specialists from the London and Liverpool offices will cover three topic areas including: fatal port accidents, shipping incidents - investigation and management from the port perspective, and a look at commercial and regulatory law, all of which explore the principal challenges currently facing UK ports. The first of these seminars held earlier this year was universally well-received and feedback was positive: ‘Just the right balance of law and practical advice.’ ‘Very helpful and informative.’ ‘Relevant and interesting. Thank you.’ ‘A well-organised and informative day.’ ‘Excellent range of topics. A very good use of my time.’ The seminar will be held at Hill Dickinson’s London office in The Broadgate Tower on Monday 14 December from 09.30 - 13.00, followed by a buffet lunch, networking and drinks. Anyone interested in attending this seminar or hosting their own full-day event should contact Tony McDonach email@example.com STOP PRESS - Hill Dickinson offers half-day port seminar 18 It is common practice for financiers of yachts to seek a personal guarantee from the borrower to guarantee the debts of the borrowing entity, which will invariably be a special purpose company whose only asset is the yacht. In essence, if the borrowing company defaults on the loan, the lender may then call upon the personal guarantor to repay the debt. When personal guarantees bite The same often applies to the financing of business jets and the implications of the borrowing entity defaulting on the loan are also the same, as was demonstrated in the recent High Court case of Lombard North Central PLC -v- Blower. Mr Blower was the beneficial owner of Four Seasons Aviation Ltd (FSA) which entered into a loan agreement with Lombard for the financing of a Hawker 800 business jet. FSA defaulted on the loan, the facility was terminated and the jet was repossessed. Lombard sought a bankruptcy order against Mr Blower as a result of his failure to perform his obligations under a guarantee and indemnity he had entered into in favour of the bank. The relevant clause in the loan agreement stated that any demand under the guarantee ‘shall be made in writing signed by an officer of the lender.’ Mr Blower contended that, as Lombard’s demand under the guarantee was executed by the solicitors for Lombard and not an officer of the bank, the demand was defective. No other issue was raised with the demand. In her judgment, the judge noted the general common law rule that an agent may execute a deed or do any other act on behalf of the principal, which the principal might himself do. The judge found that, on a proper construction of the loan agreement, there was no requirement that the letter of demand had to be signed personally by an officer of the bank. She found that the demand could be signed by an agent duly authorised to sign on behalf of an officer, namely the bank’s solicitors. There was no suggestion that the solicitors were not duly authorised to act on behalf of Lombard. Mr Blower raised a number of other grounds of objection but ultimately he failed to persuade the court, and the bank’s petition to have him declared bankrupt therefore succeeded, with the costs of the case to be paid out of the bankrupt’s estate. Personal guarantees are a common feature of all asset-based lending in the luxury/personal sector, and this case highlights that they should never be entered into lightly or without a full understanding of the risks to one’s personal wealth in the event that the borrowing entity cannot meet its obligations in the underlying loan. Panos Pourgourides firstname.lastname@example.org Edward Hicks Hill Dickinson is deeply saddened to announce the sudden and tragic death of senior associate, Edward Hicks. Edward joined the firm in 2010 and rapidly became a valued member of our successful commodities team. He was well-liked and respected within the firm and his loss will be felt by his colleagues both in the City of London office where he was based, as well as everyone at Hill Dickinson with whom he worked. We have been receiving many warm tributes from clients and former colleagues at home and abroad. He will be missed by a wide community who not only admired his professionalism, but also held him in high personal regard. All of us at Hill Dickinson extend our sympathy to his widow, Jackie, and his family. Our thoughts are with them at this difficult time. 19 marine, trade and energy autumn 2015 International law firm, Hill Dickinson, has renewed its sponsorship as official legal partner of the world’s longest ocean race, the Clipper Round the World Yacht Race, which celebrated its 10th edition when it set sail from London’s St Katharine Docks on 30 August 2015. STOP PRESS - Hill Dickinson sponsors 2015/16 Clipper Round The World Yacht Race The firm will provide legal advice and support to the Clipper 2015-16 Race and use its partnership to engage with both staff and clients in key markets around the world. Tony Allen, head of Hill Dickinson’s yacht team, said: ‘The Clipper 2015-16 Round the World Yacht Race marks the momentous 10th edition of this global event and is set to be a particularly memorable experience for all involved. As the official legal partner we will ensure that our expertise from our UK and overseas offices is applied at every stage of the race in order to fully support the organisers and allow the participants to concentrate on winning their race.’ Hill Dickinson’s association with the biennial Clipper Race began more than a decade ago in 2004 when the awardwinning law firm was appointed as official lawyers to Liverpool 2008 as part of the city’s successful bid to become European Capital of Culture. As such the firm became race partners to Liverpool 2008’s entry in the Clipper 2005-06 Race and was introduced to the global marketing opportunities the race delivers to its sponsors and partners. The Clipper 2015-16 Race is the biggest event yet with over 700 crew taking part from over 40 different countries, providing an even stronger global platform for Hill Dickinson to connect with its international network of offices and clients and in the marine industry. The Clipper Race was founded by Sir Robin Knox-Johnston, the first man to sail solo non-stop around the world, and offers non-professional sailors the opportunity to achieve something remarkable, racing on the fleet of matched 70-foot ocean racing yachts under the guidance of a professional skipper. Sir Robin welcomed the firm’s continued involvement with the race saying: ‘We have enjoyed working with Hill Dickinson for more than a decade now so I am pleased we are able to continue our excellent relationship and welcome them back as official legal partner for the Clipper 2015-16 Race.’ 20 Lord Denning famously likened European law to an incoming tide that ‘flows into the estuaries and up the rivers [and] cannot be held back.’ Are we about to see a similar incoming tide of damages actions, this time inspired by antitrust law across the Atlantic? More than ever, companies should be reaching for their competition law compliance manuals and reviewing their staff training. The UK is becoming more like the US, where the financial risk from damages actions tends to be seen as even greater than the risk of regulatory investigations and multimillion dollar fines. As of 1 October 20151 US-style class actions (called ‘collective actions’) can now be brought in the Competition Appeal Tribunal (CAT) on behalf of a whole class of claimants (businesses as well as consumers or a combination of both) against cartel defendants who have broken antitrust rules and overcharged their customers. UKdomiciled claimants in the class are entitled to damages without having to ‘opt in’ to any proceedings provided that their claims all raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings. The ‘opt-in’ system will still apply to non-UK claimants, who can opt into a UK collective action. If successful, the class representative (approved by the CAT) collects damages on behalf of all class members without the need for individual losses to be calculated and any unclaimed balance goes to a nominated charity and/or the representative’s costs. Collective actions - ‘Opt-out’ is the new ‘in’ With these reforms, the UK’s aspiration to be the jurisdiction of choice for private antitrust actions has received a considerable boost. There is nothing new about being able to recover damages for losses suffered at the hands of a cartel or to join similar claims. But, previously, only ‘specified’ consumer bodies (in fact only the Consumers’ Association) could bring a group competition law action on behalf of consumers and those consumers had to take positive steps to opt into the proceedings, resulting in practice in almost no take-up. It remains to be seen how far claimants, and especially consumers, will take advantage of the new rules. The difficulties with the old regime which the reforms have now addressed is exemplified by the attempt by the Consumers’ Association in March 2007 to get redress from JJB Sports for purchasers of replica football kit, which ended up being an own goal. Although the Association managed to negotiate a successful pay-out of £20 for those who had opted in and £10 for other consumers who could prove they had bought relevant shirts, the legal costs outweighed the damages recovered as too few consumers took part. Consumer bodies and funders therefore refused to risk any more such collective actions, hence the need for the reforms. The choice of an opt-out regime is designed to reverse the situation and ensure that a remedy in damages is easily available for consumers and not just for claimants with deep pockets. In the intervening years the UK has already witnessed a huge growth in non-consumer driven private antitrust actions, fuelled by the arrival in the UK of a large number of specialist US ‘plaintiff’ law firms and a range of litigation funders eager to take on new cases. The Government clearly hopes that the new law will unleash a dramatic increase in the number of new actions by both consumers and businesses harmed by cartels and help take pressure off a beleaguered Competition and Markets Authority. However, one problem is the reference, in the CMA’s guidance published last August, to Government policy that the ‘class representative’ has to be a person who ‘would fairly and adequately act in the interests of the class members’. It is not clear if this represents a shift in policy from the CMA’s earlier guidance which specifically ruled out firms, funders and special purpose vehicles. Either way there will be questions as to who will bear both the costs of launching such an action and the costs award in favour of the defendants in the event of an unsuccessful claim. How this plays out in practice will have to be seen. While it is still too early to tell how much take-up there will be, the reforms, though far from perfect, should certainly encourage more private enforcement. At the same time, the Act extends the jurisdiction of the CAT to hear stand-alone competition law cases, not just appeals against infringement decisions of the UK competition regulatory authorities or the European Commission and damages actions that ‘follow-on’ from such decisions. Claimants will now have a choice between the High Court and the specialist CAT when bringing proceedings based on competition law. The CAT’s procedural powers have been extended, enabling it to grant injunctions, fast-track cases and stay proceedings. The limitation period has been aligned with the High Court - now six years from the events giving rise to the claim as opposed to two years previously. This latest change brings UK law into line with the EU Directive With the advent of a new opt-out regime for collective actions for breaches of antitrust rules, Hill Dickinson’s competition and regulatory specialist, Philip Wareham, looks at the implications for businesses and their existing compliance programmes. 1. Date of entry into force of Part 5 of the Consumer Rights Act 2015 (‘the Act’) and new Competition Appeal Tribunal Rules as well as a new section 6 of the CAT Guide to Proceedings entitled ‘Collective proceedings, Collective Settlements’. A few further changes will be introduced in the course of next year to comply with the EU Damages Directive (Directive 2014/104). marine, trade and energy autumn 2015 21 2014/104 which lays down a minimum of five years. In addition, the Act introduces voluntary redress schemes (VRS), which can be established with the approval of the Competition and Markets Authority, as a form of Alternative Dispute Resolution (‘ADR’) and as with all ADR, this may prove to be a cheaper and quicker option for businesses to resolve any issues. The collective action system introduced by Schedule 8 of the Act differs from the US class action system in several respects, especially as it specifically prohibits treble or any form of exemplary damages and provides for greater judicial oversight of each step in the proceedings: in its essentials, however, it offers similar rights insofar as it allows claims to be initiated by a class representative on behalf of a defined class of claimant, each one of whom is automatically entitled to an appropriate share of the damages collected unless the claimant opts out. The availability of the new opt-out procedure and all the other reforms to the CAT, including the introduction of VRSs, are both an opportunity and a threat. They undoubtedly raise the level of risk for businesses that make anti-competitive agreements or abuse a dominant position in breach of the EU or UK antitrust rules, in particular businesses that are consumer-facing. Equally, businesses benefit from having greater access to a specialist court to hear damages claims when they themselves are victims of anticompetitive behaviour. While it is still too early to tell how much take-up there will be, the reforms should certainly encourage more private enforcement of the competition rules and enhance the UK’s reputation as a forum of choice for antitrust disputes in the EU. For the time being the reforms affect only antitrust-based claims which have been singled out for special treatment for policy reasons, but one cannot rule out the possibility that the opt-out model could be adapted and extended to other areas, such as personal injury, at a later date if it proves popular in the antitrust field. The message is clear: competition law compliance should yet again be pushed high up the corporate governance agenda to ensure existing compliance programmes are updated and reenergised. Philip Wareham email@example.com 22 BUSINESS ALERT - new Package Travel and Assisted Travel Arrangements Directive The new Package Travel and Assisted Travel Arrangements Directive will come into force in the UK either by the end of December 2017 or at the very latest by June 2018. The Directive will affect companies and travel agents that: • organise package holidays or assisted travel arrangements, or • are in the business of offering different types of travel arrangements, and • are selling package holidays now or will do so in 2016 in advance for January 2018 onwards. If these criteria apply to your business, then you should ensure that your booking terms and conditions for package holidays being taken in 2018 clearly and prominently stipulate what service you are offering to your customers as well as the level of protection cover the customer will have, as required by the new Directive. In addition to existing information which is to be provided to travellers under the present Package Travel Regulations such as information on visas, it is worth noting that the following new elements will also need to be captured in your booking terms and conditions for 2018 sales of package holidays or assisted travel arrangements to your customers: • Travellers’ right to terminate the contract before the start of the package holiday on payment of an appropriate termination fee. • Travellers’ right to terminate the contract free of charge where unavoidable and extraordinary circumstances will significantly affect the performance of the package. • Information to travellers that under linked travel arrangements they are not buying a package and that individual travel service providers are solely responsible for the performance of their contract. • Information to travellers that traders facilitating linked travel arrangements are also required to provide insolvency protection for the refund of payments they receive. • Information on whether the holiday is generally suitable for persons with reduced mobility. • Information that the traveller is required to communicate any lack of conformity which he/she perceives during the performance of the package. • Information on in-house complaint handling procedures and on alternative dispute resolution mechanisms. Hill Dickinson’s travel and leisure team - acknowledged as ‘leaders in the field’ by Chambers & Partners UK, and ranked by both Chambers and The Legal 500 UK - offers a dedicated travel and tourism consultancy, which deals with the kinds of issues raised by the new Directive. If you would like further information on this or any other matters affecting your travel business, your key contacts are: Maria Pittordis firstname.lastname@example.org Javed Ali email@example.com 23 marine, trade and energy autumn 2015 Hill Dickinson trainees raise funds for children’s hospital Trainees from Hill Dickinson’s Manchester office have raised £4,059.03 for Royal Manchester Children’s Hospital, after successfully organising a battle of the bands competition ‘Manchester Music Makers.’ The event, now in its third year, took place at the iconic music venue Band on the Wall. On Friday 2 October, Liam Goulding, Katie Somerville, Richard Da Roza and Sean Lightfoot visited Royal Manchester Children’s Hospital to find out from fundraising manager, Joel Oxberry, how funds raised by the trainees will benefit the hospital, which provides specialist healthcare services for children and young people throughout the north west, as well as nationally and internationally. The Manchester Music Makers competition was opened up to the legal community with ‘Red Corner’ from Exchange Chambers, ‘Patrick & Lucy’ from DWF, ‘Last Gasp’ from Lincoln House Chambers, ‘Matter of Mind’ and Hill Dickinson’s very own band ‘Redacted’, battling on stage to Hill Dickinson and Crawford & Company join forces to address clandestine entry into the UK On 8 and 22 October 2015, Hill Dickinson hosted seminars in their Manchester and City of London offices in association with Crawford & Company analysing the legal and insurance implications of the current migrant crisis in northern France. Speakers included Peter McClelland (senior surveyor at Crawford & Company), Adrian Marsh (head of Hill Dickinson’s cargo and logistics team), Jason Hansell (UK Border Force) and Alex Schofield (Food Standards Agency). The presenters discussed the modus operandi employed and the legal implications, the government’s approach to the prevention of unauthorised entry, and the impact on food consignments from a public health perspective. Practical guidance was provided to assist importers, road hauliers and their insurers in their attempts to deal with the on-going problem. win the prestigious title ‘Manchester Music Maker 2015’ and the prize of studio recording time generously donated by Cotyso Studios. Following a tense audience vote, ‘Matter of Mind’ was crowned as the 2015 winner. Hill Dickinson’s Liam Goulding, Katie Somerville, Richard Da Roza and Sean Lightfoot with Joel Oxberry from Royal Manchester Children’s Hospital. London Piraeus Singapore Monaco Hong Kong Liverpool Manchester Sheffield hilldickinson.com/marine ® The information and any commentary contained in this newsletter are for general purposes only and do not constitute legal or any other type of professional advice. We do not accept and, to the extent permitted by law, exclude liability to any person for any loss which may arise from relying upon or otherwise using the information contained in this newsletter. Whilst every effort has been made when producing this newsletter, no liability is accepted for any error or omission. If you have a particular query or issue, we would strongly advise you to contact a member of the marine, trade and energy group, who will be happy to provide specific advice, rather than relying on the information or comments in this newsletter. About Hill Dickinson The Hill Dickinson Group offers a comprehensive range of legal services from offices in London, Piraeus, Singapore, Monaco, Hong Kong, Liverpool, Manchester and Sheffield. Collectively the firms have more than 1250 people including 190 partners and legal directors. To subscribe to our legal update such as the marine, trade and energy newsletter, scan the QR code or contact: firstname.lastname@example.org Letters to the editors We welcome any comments readers may have on the articles in this newsletter, or on any related topic, and would be happy to publish suitable commentary in a subsequent edition. Please contact the editors, whose details appear above. Maria Pittordis Head of Marine, Trade and Energy +44 (0)20 7280 9296 email@example.com Editors: Nicholas Phillips +44 (0)20 7280 9102 firstname.lastname@example.org Rhys Clift +44 (0)20 7280 9199 email@example.com Editorial contact: Margaret Pinder firstname.lastname@example.org marine, trade and energy autumn 2015 Hill Dickinson’s Hong Kong office contributes to leading arbitration law journal Our Hong Kong office has contributed to leading international arbitration law journal, Global Arbitration Review (GAR). Damien Laracy and Lynn Chen have completed a chapter for GAR on maritime and offshore arbitration in the Hong Kong jurisdiction. The entry also includes contributions from Mike Mallin, who heads Hill Dickinson’s Hong Kong team, Anthony Woo, Douglas Lee, CJ Tang and Michael NG. The chapter answers questions on offshore oil and gas disputes, maritime disputes and security for claims in arbitration. The GAR’s know-how series allows for cross-comparison of international dispute resolution practice and procedure across multiple jurisdictions. Hill Dickinson’s Nick Phillips helps Shipwrights steer to a podium place in City Go-Kart Grand Prix Hill Dickinson’s Nick Phillips, who was the third of the four drivers, entered the competition at 13th position on a tricky drying track and took a fast, hard race over his 24 laps to pull the team back tofifth position allowing Simon Brown, the final driver, to cap a great team performance by finishing in third position taking the team to the podium. Nick again upheld the honour of the firm with another splendid third place in the City Solicitors’ Annual Shoot on Saturday 19 September 2015 with Hill Dickinson shooting partner Edward Wallis. The race, which took place at Daytona Sandown Park on 26 July 2015, was a tightly-fought contest over some two hours. The first position went to the Dowgate Dodgers with Wet 10 in second place and The Worshipful Company of Shipwrights powering into third place with some thrilling driving from all four team members.