The EU Passenger Liability Regulation 392/2009 (PLR) entered into force on 31 December 2012 in all States that are members of the European Union or the European Economic Area [references to the EU should be taken to include the EEA]. The Regulation is based upon the Athens Convention 2002 and sets out a comprehensive regime for providing compensation for claims for passenger injury and death. The Athens Convention 2002 entered into force on 23 April 2014.
PLR entered into force from the end of 2012 for international carriage in the European Union or on EU flag vessels. It also applies to many seagoing domestic voyages after an optional phasing in period for certain catergories of vessel.
A central feature of PLR and the Athens Convention is the requirement for compulsory insurance. Shipowners who have vessels which are subject to the Regulation will need to ensure that a Certificate is carried on board issued by an EU or EEA Member State or a state party to to the Convention confirming that the required insurance is in place.
The International Group issued Circulars on PLR 21 September, 6 & 13 December 2012. A further Circular on the Athens Convention was published on 23 April 2014.
In 2002 a Diplomatic Conference of the International Maritime Organization (IMO) adopted a Protocol to the Athens Convention 1974, creating the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 2002.
The European Union has a stated policy of strengthening the protection of passengers in all modes of transport and has encouraged Members States to ratify the Convention. However, the Convention only entered into force on 23 April 2014 12 months after ratification by ten states. The substance of the Convention was incorporated in EU Passenger Liability Regulation 392/2009 (PLR) which came into effect more than two years before the Convention on 31 December 2012. It introduced significant new compensation and insurance obligations on the operators of passenger vessels which trade in Europe or fly the flag of an EU member state.
Liability and limits
A shipping incident is one that would not have occurred in a land-based hotel and is defined as "shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship".
- Death or injury caused by a "shipping incident"
-- strict liability up to a limit of SDR 250,000 (approx USD 380,000) per passenger
-- liability up to SDR 400,000 (approx USD 600,000) per passenger unless the carrier proves that the incident which caused the loss occurred without the fault or neglect of the carrier.
Non Shipping incidents
- Death or injury not caused by a "shipping incident"
-- liability up to SDR 400,000 per passenger if the incident was due to the fault or neglect of the carrier. The burden of proving fault or neglect lies with the claimant.
Note: an SDR or Special Drawing Right is currently approx USD 1.52 or EUR 1.21. Current rates of exchange can be found on the IMF website.
The carrier is able to avoid liability for shipping incidents if he can prove that the incident
- resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character,
- or was wholly caused by an act or omission done with the intent to cause the incident by a third party.
The first exception covers war risks but does not contain any reference to terrorism.
The term "wholly caused" in the second exception may result in the carrier being unable to rely on the defence if negligence on his part was a contributory cause.
Per passenger limits of liability
The Regulation and the Convention do not contain a single global limit, in contrast to the IMO Conventions which govern non-passenger liabilities. The total potential exposure will therefore be dependent upon the number of passengers. However it should be noted that the figures are limits and in practice many claims will fall below the limit, particularly in view of the high level at which the limits are set.
Global limits of liability
The Regulation and Convention expressly preserve carriers' rights under the 1976 Limitation Convention as amended by the 1996 Protocol (LLMC 1996). Article 7 of LLMC 1996 contains a global limit of SDR 175,000 multiplied by the number of passengers which the ship is authorised to carry. However, many States have made use of an opening in Article 15.3 bis to fix a higher limit or no limit at all.
The most far reaching changes brought about by PLR and the Athens Convention are the compulsory insurance and certification requirements. These are set out in some detail in Article 4 bis of the Convention. The regime is similar to that which exists under the IMO Conventions governing pollution from persistent oil cargoes and from ships' bunkers and for wreck removal but with some important differences.
All ships to which the PLR applies are required to carry a Certificate on board confirming that insurance or other financial security is in place which meets the requirements of the Regulation. The Certificate must be issued by the flag state or, if the flag state is not an EU Member State, by an EU Member State. If the vessel does not fly an EU flag, the Certificate must be obtained from the authorities of an EU Member State which is willing to do so. A number of States have confirmed that they are willing to issue Certificates for vessels calling at their ports, while some have indicated they may issue Certificates even for vessels not calling at their ports. See International Group Circular dated 13 December 2012.
The Certificate will be issued by the appropriate state authority once satisfactory evidence has been produced showing that insurance is in place. The evidence will take the form of two "blue cards" which are in effect guarantees signed by providers of insurance or other financial security. The insurer or other entity providing the blue card is subject to direct action by claimants and unable to rely on policy defences (save for wilful misconduct) or terminate liability on less than three months notice (30 days in the case of terrorism).
The Certificate must be in the form which is prescribed in PLR. Rather confusingly, the PLR provides that the Certificate must be in the form prescribed in the Convention. The PLR Certificate therefore refers to the Convention (which is not yet in force) and not contain any reference to the Regulation in respect of which it is issued.
The non-war blue card
An explanation as to why two blue cards are required is explained in the section headed terrorism.
The "non-war blue card" covers liabilities under PLR with the exception of war risks. The relevant risk which is outside the scope of this blue card is for acts of terrorism. P&I Clubs in the International Group are able to issue these blue cards.
The war blue card
See next section headed "Terrorism".
Although PLR contains a defence for acts of war, there is no reference to terrorism. There is therefore the possibility of carriers being found liable for terrorist acts.
In contrast, standard P&I cover excludes war risks. Terrorism is treated as a war risk and therefore outside the scope of P&I cover. There is a self-evident problem for Clubs who are on the face of it unable to issue a blue card for a risk which is excluded from their cover and from the International Group's pooling and reinsurance arrangements.
As well as the Clubs' exclusion for war risks (including terrorism), an additional problem arises by virtue of the limited insurance capacity for war risks which is a particular problem for the high levels of cover required for vessels with a large passenger capacity.
The International Group repeatdly warned the IMO prior to adoption of the Convention in 2002 that terrorism would be an obstacle to implementation and this proved to be the case. Finally, in 2006 the IMO agreed upon a Reservation and Guidelines for Implementation which provide a framework for the issue of two blue cards, one for all risks apart from war and terrorism and one for the war and terrorism risks. To reflect the limited capacity of the war risks insurance market, the liability under the war blue card is subject to an upper limit of SDR 340 million (approximately USD 520 million at current exchange rates) .
War blue card
Shipowners whose vessels will be subject to PLR will need to obtain a second blue card covering war risks in addition to the non-war blue card which they can obtain from their P&I Club. Some Clubs (but not all) wish to issue both blue cards. A proposal was recently made to Club Boards to extend the scope of the Group's pooling and reinsurance arrangements to include cover for war and terrorism P&I risks. This had the support of Skuld's Board and would have cleared the way for Clubs to issue both blue cards. Regrettably this proposal failed to get sufficient support. Accordingly, those Clubs wishing to provide their members with war and terrorism blue cards have been dependent upon finding a satisfactory reinsurance programme outside of the International Group's pooling and reinsurance arrangements.
Some Clubs, including Skuld, have decided to issue blue cards in their own name, in much the same way as for blue cards issued for the non-war PLR risks and for the Civil Liability and Bunkers Conventions. However there is an additional cost because of the need to purchase a separate reinsurance programme specifically designed to cover risks arising out of these war blue cards.
Application and scope with flowchart
For flowchart – see link on this page.
Vessels requiring blue cards
The Regulation applies to all sea going ships licensed to carry more than twelve passengers which undertake;
- an international voyage where (a) the ship is calling at a port in an EU/EEA State; or (b) the ship is flying the flag of or is registered in an EU/EEA State,
- a domestic sea going voyage in an EU/EEA State (a) on Class A & B vessels or (b) on Class C & D vessels where the State has chosen to extend application of the Regulation to these categories of vessel.
International and domestic traffic
The Athens Convention, which entered into force in April 2014, applies only to international carriage. The PLR has extended scope to include carriage by sea within a single Member State. PLR applied to Class A and Class B ships from the date of entry into force on 31 December 2012, subject to a right for States to defer application for periods which have now expired (31 December 2016 for Class A and 31 December 2018 for Class B).
States are also free to extend PLR to Class C & D ships.
The approach taken by States has varied, with some applying PLR to all Classes with immediate effect on 31 December 2012. PLR applied to Class A, B, C and D vessels from 31 December 2012 in states such as Netherlands, Denmark and Finland while most other states made use of the right to defer.
Note: Denmark will not apply the certification requirements or the requirements in respect of terrorism insurance, mobility equipment, advance payments or information to passengers for Class C or D vessels (see law 249 of 2012 - Danish language only).
Norway is obliged to follow PLR as a member of the European Economic Area. The legislative enactment entered into force on 1 January 2014, please see the amendments to the Maritime Code (Norwegian only). The approach is in line with that already taken by Denmark in that C & D vessels in domestic traffic will be required to have insurance in place but will not need state issued Certificates. A & B vessels will however have to obtain Certificates issued by the Norwegian authorities.
'Class A' means a passenger ship engaged on domestic voyages other than voyages covered by Classes B, C and D.
'Class B' means a passenger ship engaged on domestic voyages in the course of which it is at no time more than 20 miles from the line of coast, where shipwrecked persons can land, corresponding to the medium tide height.
'Class C' means a passenger ship engaged on domestic voyages in sea areas where the probability of exceeding 2.5 m significant wave height is smaller than 10 % over a one-year period for all-year-round operation, or over a specific restricted period of the year for operation exclusively in such period (e.g. summer period operation), in the course of which it is at no time more than 15 miles from a place of refuge, nor more than 5 miles from the line of coast, where shipwrecked persons can land, corresponding to the medium tide height.
'Class D' means a passenger ship engaged on domestic voyages in sea areas where the probability of exceeding 1.5 m significant wave height is smaller than 10 % over a one-year period for all-year-round operation, or over a specific restricted period of the year for operation exclusively in such period (e.g. summer period operation), in the course of which it is at no time more than 6 miles from a place of refuge, nor more than 3 miles from the line of coast, where shipwrecked persons can land, corresponding to the medium tide height.
The Convention provides that:
"passenger" means any person carried in a ship,
It appears that the definition is wide enough to include a RoRo vessel capable of transporting more than 12 drivers.
Information to passengers
Article 7 of PLR provides that passengers must be provided with appropriate and comprehensible information regarding their rights under the Regulation. The Commission is required to prepare and make public a summary of the provisions of the Regulation which will represent the minimum information to be provided to passengers. This summary was published on 7 December 2012 and can be found by clicking the link on this page, as well as on the EU Commission website under the heading "Summaries of legislation".
Where the contract of carriage is made in a Member State, the information shall be provided at all points of sale,. Where the place of departure is in a Member State, the information shall be provided prior to departure. In all other cases, it shall be provided at the latest on departure. The information shall be provided "in the most appropriate format".
The Athens Convention entered into force on 23 April 2014, twelve months after the IMO received the required ten ratifications. From that date there are two very similar but not identical legal systems co-existing. There are a number of issues regarding Certification, particularly the recognition by EU Member states of Certificates issued by non-EU states which are party to the Convention and, conversely, the recognition by non-EU states of Certificates issued by EU States of which are not party to the Convention. The International Group engaged in a dialogue with the states concerned in order to resolve these issues. On 24 April 2014 EU/EEA Member States confirmed that they would continue to recognise Certificates issued by other EU/EEA States even if the State issuing the Certificate was not party to the Convention, and that a Convention certificate issued by a non EU/EEA State party to the Convention would be accepted within the EU/EEA for Port State Control purposes.
In addition, some States have ratified the Convention without giving effect to the IMO Reservation which implements the special provisions in relation to terrorism. Clubs will be unable to issue blue cards to States which have not made the Reservation. This has been raised with the States concerned.
The following states have ratified the Convention:
- Marshall Islands
- St Kitts & Nevis*#
- United Kingdom
* without Reservation
# St Kitts has denounced the Convention with effect from 4 April 2015
The International Group issued a Circular regarding entry onto force of the Convention on 23 April 2014.
Athens Protocol 2002 in force from 23 April 2014 for ratifying states
23 April 2014