In the February edition of The Field, we discussed crew risks in the offshore environment. While the principles set out in that article are of universal application, when it comes to dealing with claims from US maritime workers, there is an additional layer of complexity with an assessment having to be made of the category of legislation into which the worker falls.
In this article, Pamela Milgrim of Skuld North America looks at the differences between the way in which the two main pieces of legislation covering this area respond. She also offers some thoughts on how to assess which is appropriate to your particular circumstances and provides some guidance on the application of both.
US Offshore maritime workers who are injured on the job are covered by general maritime law and two specific compensation laws: The Jones Act and the Longshore and Harbor Workers' Compensation Act (LHWCA). These two compensation schemes have three key differences:
|Fault||Fault or negligence of employer or crew must be proved||Right to compensation regardless of fault|
|Oversight||Not overseen by state or federal agency – presented in and decided by court||Worker's compensation claims are handled by a state or federal agency|
Scope of compensation
|Payments usually higher and more expansive, covering things such as medical care, loss of wages, loss of earning capacity and fringe benefits, pain and suffering, disfigurement and more||Compensation payments are designed to provide for medical care, disability payments and income benefits to the injured employee, replacing money the worker is losing because of an injury or illness|
As a result of the more expansive compensation available under the Jones Act, when an offshore maritime worker is injured on navigable waters, the question frequently arises as to whether the injured worker is a "seaman" working aboard a "vessel" for purposes of the Jones Act. To qualify as a seaman under the Jones Act, a worker must demonstrate, among other things, that they have a connection to a vessel in navigation or an identifiable group of such vessels that is substantial in terms of both its duration and its nature.
The US Supreme Court defined the term "vessel" for Jones Act purposes in the case of Stewart v Dutra Construction, holding that a vessel is "any watercraft practically capable of maritime transportation regardless of its primary purpose or state of transit at that particular moment." This means that something may be a vessel even if its primary purpose is not transportation, so long as its use as a means of transportation remains a practical (not theoretical) possibility. In that sense, a watercraft is not capable of being used for maritime transport in any meaningful sense if it has been permanently moored or otherwise rendered practically incapable of transportation or movement.
This means that mobile offshore drilling units are vessels under general maritime law and US courts have held in separate cases that: a floating drilling platform is a vessel, despite the fact that it was not self-propelled and that its primary purpose was oil drilling; a jack-up rig and other mobile oil-extraction vessels such a drill-ships also are vessels; and, that a dynamically positioned, semi-submersible, deep-water drilling platform was a vessel because it was only attached to the wellhead by a 5,000-foot string of drill pipe.
The courts have also considered whether a floating, production, storage and offloading unit (FPSO) is a vessel, ruling that while the primary purpose of an FPSO is oil production, it is a vessel as it retains its own propulsion system and can detach itself from the well and relocate under its own power within six hours, transporting the crew, equipment and stored oil along with them. In so ruling, the court specifically rejected the argument that an FPSO that has not moved in six years loses its status as a vessel.
The courts have however advised that Spars, which are large production platforms that float on the ocean's surface but moored to large anchors in the seabed, are not vessels. In making that ruling, the courts have cited their limited movement capabilities, the time and expense necessary to render such a structure capable of marine transport, and the permanence of their attachment to the sea floor. In one case the court considered whether the RED HAWK spar, a floating gas-production platform, was a vessel.
The spar was permanently moored by six permanently taut mooring lines that are attached to 18-foot suction anchors deeply embedded into the sea floor under 5,000 feet of water. Those anchors prevented lateral movement. Evidence presented in the case established that relocation of the spar would take approximately 50 days at a cost of USD 42 million and would require the construction of a new mooring system at the new site.
Consequently, the Court found that the spar was not a vessel as it was at most "theoretically capable of maritime transportation but not practically capable". Similar decisions were also reached where an oil and gas spar platform attached to eleven suction piles driven into the seabed 4,500 feet below with a 200-foot range of movement was found not to be a vessel, and where a holding production facility attached by twelve pilings on the sea floor with 200-foot range of movement was held to not be a vessel.
What constitutes a vessel was once again considered recently, in the case of Ross v W&T Offshore. The plaintiff raised a claim after he was injured while working as a cook aboard an oil and gas production platform which did not float, had no navigational equipment or means of self-propulsion, could not be towed, was permanently affixed to the Outer Continental Shelf in the Gulf of Mexico by eight pilings and had not moved from its location in over two decades.
His counsel alleged his client was a Jones Act seaman and the structure, called SS 349-A, was a vessel which, if accepted, could lead to the Jones Act applying. In contrast, counsel for W&T Offshore argued that SS 349-A was not a vessel and that plaintiff's claim is governed by the Outer Continental Shelf Lands Act (OCSLA), which mandates the application of Louisiana law. As a result, counsel for W&T Offshore argued that plaintiff's claim for Jones Act negligence and unseaworthiness must fail.
The Court reviewed Fifth Circuit precedent which has held that fixed platforms are not vessels for the purposes of Jones Act or unseaworthiness claims and that floating work platforms, not used in navigation, do not constitute vessels. As a result, the Court held that cooking on a fixed platform bore no relationship to traditional maritime activity and since the platform was not a vessel, plaintiff's Jones Act negligence, unseaworthiness and general maritime law claims must fail.
The ruling from the Ross Court did not leave the injured worker without a remedy. In fact, plaintiff could proceed with his claim for injuries sustained on a fixed oil and gas platform in the Outer Continental Shelf by pursuing his worker's compensation claim under the LHWCA.
Injury claims in the US can be as complex as they can be costly. Even before dealing with the prospect of a court action, there are a number of statutory requirements which need to be taken into consideration and failing to take these into consideration can have seriously detrimental consequences in the event that a claim is raised. It is therefore important that proper and early advice is received when facing the prospect of a claim in the US.
At Skuld, we have a specific team based in the USA to assist in the event that potential claims arise there. They work as part of a team with our other Skuld claims handlers, the assured and their brokers to ensure that the claim is effectively and sensitively managed and, if necessary, ensuring that the correct lawyers for the circumstances of the claim are instructed.
See also The Field February 2019: