Legal Implications of the ISM Code

Dr. Phil Anderson BA(Hons.) D.Prof.

FNI, MEWI, ACIArb., AMAE, Master Mariner

Let us never forget..... The ISM Code was never intended to create new interparty liabilities. The Code was formulated with the clear purpose of improving and extending standards of maritime safety ! HOWEVER...

 Has the ISM Code been high-jacked by the lawyers?

The Law

Not much new

Carriage of Goods Marine Insurance Personal Injuries Collisions etc Environmental

Requirement to have DOC and SMC H&M and P&I

The Tests Exercise of due diligence Duty of care Fault and privity Wilful misconduct Recklessness Utmost good faith

The Tests
In the law of carriage of goods by sea neither seaworthiness nor due diligence is absolute. Both are relative, among other things, to the state of knowledge and standards prevailing at the time Lord Sumner Bradley & Sons Ltd. v. Federal Steam Navigation Co (1926) 24 Ll.L.Rep.446; (1927) 27 Ll.l Rep. 395

The Tests
Seaworthiness must be judged by the standards and practices of the industry at the relevant time, at least so long as those standards and practices are reasonable Mr Justice Cresswell Papera Traders Co Ltd & others v. Hyundai Merchant Marine Co Ltd & Another ( The Eurasian Dream); (2002) 1 Lloyds Rep. 719

Compliance with the Code

Contractual claims and disputes Civil actions Criminal actions

The bench mark

The Benchmark The way the ship operator manages safety!

The Benchmark The ISM Code / the SMS

The way it has been developed The way it has been implemented The way it is operating in the Company and on board the ship on a day-to-day basis

Bench Mark But does such a bench mark actually exist?

The Causal Chain

INEFFECTIVE DPA

ACCIDENT

FAILURE OF SMS

DPA Superhero or Fall guy??

 The DPA is exposed.....BUT... They are not on their own the buck is unlikely to stop at the desk of the DPA...

Issues of Attribution

Issues of Attribution Where does the buck stop? The role of the highest levels of management The role of the Designated Person Who is the alter ego? Does it matter?

The Designated Person

The Dilemma The errant shipowners Achilles heel
The blind eye shipowner is faced with a catch 22 situation. If he
hears nothing from the designated person, he will be bound to call for reports, for it is inconceivable there will be nothing to report. If the report is to the effect that all is well in a perfect world, the shipowners would be bound to enquire how that could be, as the safety management system is clearly intended to be a dynamic system which is subject to continuous change in the light not only of the experience of the individual ship, and of the company as a whole, but also of the experience of others in the industry.

Lord Donaldson The ISM Code: the road to discovery

The Company Verification, Review and Evaluation

All roads lead to the board-room table

 How worried should we be?

The Benchmark The ISM Code / the SMS

The way it has been developed The way it has been implemented The way it is operating in the Company and on board the ship on a day-to-day basis

 If something does go wrong and we find ourselves facing prosecution are we insured for the costs of defending ourselves?

 Is there a difference between: A no-blame culture A just culture?

A question of evidence

A Question of Evidence

Safety Management Manual(s) Checklists Records Reports

Internal and external audits Safety committee meetings Company review meetings

 Should we realistically expect an ex Master or ex Chief Engineer for example to be able to pick up the batten and run with a DPAs job?

The Designated Person

Circular MSC-MEPC.7/Circ5 Guidelines for the Operational Implementation of the International Safety Management (ISM) Code by Companies Circular MSC-MEPC.7/Circ.6 dated 10 October 2007 and titled Guidelines on the qualifications, training and experience necessary for undertaking the role of the Designated Person under the provisions of the International Safety Management (ISM) Code

Conclusion

 Has the ISM Code been high-jacked by the lawyers? Where are all the prosecutions?

Bench Mark Does such a bench mark actually exist?

 How worried should we be?

 If something does go wrong and we find ourselves facing prosecution are we insured for the costs of defending ourselves?

 Is there a difference between: A no-blame culture A just culture?

 Should we realistically expect an ex Master or ex Chief Engineer for example to be able to pick up the batten and run with a DPAs job?

Conclusion Legal liability will be measured against the ability of ship operators to manage safety. The demonstration of that ability will become evident from the way in which they have set up, implemented and operate their SMS. The focus will quickly fall upon the DPA and how he / she is performing their job! But the buck wont / might not stop there!

The End

Flowchart For Problem Resolution

YES NO Is It Working?

Dont Mess With It! YES Did You Mess With It?

YOU IDIOT! NO Anyone Else Knows? YES YES Will it Blow Up In Your Hands?

Youre STUFFED!

NO
Hide It

NO

Can You Blame Someone Else?

NO
Look The Other Way

YES

NO PROBLEM!

Dr. Phil Anderson BA (Hons.), D.Prof., FNI, AMAE, MIEW, Master Mariner Managing Director
philanderson@consultism.co.uk www.consultism.co.uk