The Finnish coast is full of islands, islets and straits. Thousands of rocks and boulders lurk above and below the surface. The fairways are narrow, with tricky bends. Most of the time it is dark and in winter there is often ice. Consequently, pilots and their services are essential for safe navigation in Finnish fairways.

According to the definition in the Pilotage Act, 'pilotage' means activities related to the manoeuvering of vessels in which the pilot acts as an adviser to the master of the vessel and as an expert on the local waters and their navigation. Various legal cases have raised the issue of whether the pilot acted as a pilot or as a crew member when he or she steered the vessel due to insufficient watch crew on the bridge. To date, the courts have not made any distinctions between piloting and when the pilot acts more or less as a crew member, but there is one case pending where the state is contesting this view again.

The question of whether the pilot acts as a pilot or as a crew member in certain situations can be relevant. Previously, the state – as provider of the pilotage service – was exempted from liability for damages caused during pilotage. Pursuant to the amendments to the Pilotage Act, the pilotage company is liable to compensate for damage caused during pilotage when the damage was caused intentionally or through gross negligence with knowledge that damage was likely to arise. Furthermore, pursuant to the new stipulation, the maximum liability shall not exceed €100,000 per occurrence.

The limitation contravenes normal tort rules, according to which liability for damage caused intentionally or through gross negligence can never be limited. However, in practice, liability for damage caused intentionally or through gross negligence will seldom materialise, since the onus is on the claimant to prove that the liable party knew that damage was likely to arise. Knowing that damage was likely to arise must fall on the pilotage company; this is difficult to establish.

The government has defended the introduction of this limitation by arguments that the shipowner has vicarious liability towards third parties for a pilot performing work in the service of a vessel pursuant to the Maritime Code. Further, the low limitation amount has been justified by the fact that the nature of piloting is to give advice and if the limitation were higher, pilotage fees would also have to increase.

The new limitation rule concerns only damages caused during pilotage. The pilotage company still has unlimited liability in terms of arranging and providing pilotage services. In addition, the pilot's personal liability has not been removed.

Vessels of a certain type and size, and vessels holding hazardous or harmful cargo must use a pilot on the public fairways in Finnish waters. Anyone that fails to comply with this compulsory requirement shall be fined for a pilotage offence. However, masters can be exempted from compulsory pilotage if they have been granted a pilotage exemption certificate. The exemption certificate can be granted after completing a certain amount of practice and passing an examination and a practical test. The certificate is granted to a named vessel for a particular fairway. Previously, an adequate command of Finnish or Swedish was required, but now in fairway areas within the Vessel Traffic Services Centre, an adequate command of English is sufficient.

The state continues to have a monopoly on piloting; however, pilotage is now organised under a limited company owned by the state. Activities relating to the manoeuvering of vessels in an harbour area in which a person is acting as an adviser to the master of the vessel and as an expert on the local waters and their navigation may also be carried out by persons approved for the task by a port authority. The same limitation rule applies to the port authority as to the pilotage company.

The new liability rules are likely to have little practical impact. However, the acceptance of English for the pilotage exemption may have wide-ranging consequences; shipowners may find it an economical advantage, but the pilotage company may be disadvantaged, since it has a duty to provide pilotage services. The potential acceptance of English in piloting was previously raised before this reform; but in the past, it was considered a safety risk to allow communication in English. Only time will determine whether the change in language allowance will create risk. The fact is, however, that lack of communication is often a greater risk than the specific language used.

For further information on this topic please contact Matti Komonen or Herman Ljungberg at Hammarström Puhakka Partners, Attorneys Ltd by telephone (+358 9 474 2207), fax (+358 9 474 2247) or email ([email protected] or [email protected]).