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January 23, 2012

Costa’s Cruise Contract Constrains Cruisers’ Claims

Filed under: Travel — Edgar (aka MrConsumer) @ 6:08 am

The 3200 passengers on the Costa Concondia, which was run aground and nearly sank in Italy, may find it tough going getting legal redress for their nightmare and suffering.

Much like airlines, cruise lines have contracts of carriage that govern the legal rights and responsibilities of both the company and the passenger. For Costa, which is owned by Carnival Cruise lines, it is called the Passage Ticket Contract (and contrary to reports by Reuters and Forbes last week, it appears that it is this Costa contract that governs, not Carnival’s as they asserted). Here are some of the key terms that protect the company at the expense of the passenger:

*MOUSE PRINT: Where Claims are to be filed — Italy!

“Voyages That Do Not Depart from, Return to, or Visit a U.S. Port –
All claims, controversies, disputes, suits and matters of any kind whatsoever arising out of, concerned with or incident to any voyage that does not depart from, return to, or visit a U.S. port, or to this Contract if issued in connection with such a voyage, shall be instituted only in the courts of Genoa, Italy, to the exclusion of the courts of any other county, state or nation. Italian law shall apply to any such proceedings.”

The good news is that the mandatory arbitration clause does not apply to this itinerary because no US port was visited.

*MOUSE PRINT: Claim Filing Deadline

“The Carrier shall not be liable for any physical or emotional injury, illness or death of a Passenger unless written notice of the claim with full particulars is delivered to the Carrier or its duly authorized agent within 185 days after the date of injury, illness or death.”

*MOUSE PRINT: Liability for Negligence

“The Carrier shall be liable only for its negligence.”

Score one for passengers!

*MOUSE PRINT: Liability for Emotional Distress

“The Carrier shall not under any circumstances be liable to the Passenger for damages for emotional distress, mental anguish or psychological injury of any kind, when such damages were neither the result of a physical injury to the Passenger, the result of the Passenger having been at actual risk of a physical injury, nor intentionally inflicted by the Carrier.”

Score another for passengers, since one could clearly argue that the passengers were at risk of actual injury, thus they can sue for mental anguish.

*MOUSE PRINT: Financial Limits on Liability

[Various international conventions] “limit the liability of the Carrier for death of or personal injury to the Passenger to no more than 46,666 Special Drawing Rights (“SDRs”) as defined therein, and all other limits for damage or loss to personal property. The value of 46,666 SDRs is equal to approximately U.S. $70,900 …”

*MOUSE PRINT: Don’t Try Suing Carnival

“All of the defenses, limitations and exemptions of whatever kind relating to the responsibility and liability of the Carrier that may be invoked by the Carrier by virtue of this Contract or by law are fully extended to and may also be invoked by all persons or entities who may act on behalf of the Carrier …”

*MOUSE PRINT: Property Damage Claims are Capped

“The responsibility of the Carrier for damages to or losses of the Passenger’s baggage, belongings or property, including without limitation clothing worn by the Passenger, even if temporarily in the custody of the Carrier, is limited to the maximum sum of the lower of five hundred U.S. dollars (US$500) per Passenger or one hundred fifty U.S. dollars (US$150) per piece, unless prior to the beginning of the voyage the Passenger declares a higher value in writing and pays a higher tariff equal to five percent (5%) of the declared value; provided, however, that under no circumstance shall the Carrier be liable for an amount greater than five thousand U.S. dollars (US$5,000), …”

*MOUSE PRINT: No Property Damage Claims are Allowed for…

“The Carrier does not undertake to carry, and shall not be liable for, loss of or damage to money, negotiable securities, business or other documents, jewelry, tools of trade or product samples, works of art, electronics, computers, computer disks or other electronic storage or similar device, cellular telephones, cameras, video or audio tapes, CDs, binoculars, recreational equipment, dental hardware, eyewear (including eyeglasses, sunglasses and contact lenses), hearing aids, medications, medical equipment, wheelchairs or scooters under any circumstances…”

*MOUSE PRINT: No Class Actions


*MOUSE PRINT: As to safety… you are on your own.

“… the Passenger assumes responsibility for his or her own safety and the Carrier cannot guarantee the Passenger’s safety while on or off the Vessel.”

*MOUSE PRINT: Cancellation rights, No Consequential Damages.

“The Carrier may for any reason whatsoever, including … perils of the sea, … cancel… the voyage itinerary, and the Carrier shall not be liable for any loss whatsoever arising from or relating to such cancellation, deviation, delay, substitution or modifications. … in no event shall the Carrier be liable for any consequential damages, costs or expenses of any kind.”

*MOUSE PRINT: Refunds for the rest of the trip — only merchandise credit toward another Costa cruise.

“If the performance of the voyage is interrupted… the Passenger and the Passenger’s baggage may be landed at … any port or place at which the Vessel may call and the responsibility of the Carrier shall cease and this Contract shall be deemed to have been fully performed…. The Passenger shall not be entitled to any refund of the Cruise Fare or to compensation, damages or reimbursement of any expenses whatsoever, but will be given credit for the proportion of the Cruise Fare unused.”

While this contract severely limits Costa’s liability, the company may well be more generous in settling claims, if for no other reason than to try to maintain goodwill, to rebuild its public image, and to limit its legal expenses. Hopfully, some smart lawyers will figure out a loophole or two in their contract.

For a comprehensive legal analysis of cruise passengers’ rights, please read Judge Thomas A. Dickerson’s treatises: “Cruise Passengers Rights and Remedies 2011”, and “Travel Abroad, Sue at Home 2011“.

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  1. I don’t know about liability law in Italy, but most rights the law gives you in the US can not be taken away by a contract. That’s the whole POINT of civil liability law. Clauses in a contract that seek to limit your basic rights are usually ignored by the courts. The primary purpose of these contract clauses is to fool you into thinking you gave up those rights so you don’t sue or you settle for less than you are entitled. For example, any contract clause that seeks to limit a party’s responsibility even if negligent is worthless – they will always be held accountable if they were negligent. While I am Not A Lawyer, I’m pretty certain that any lawsuits filed in response to this accident will claim – and prove – negligence on the part of the captain, and as such the injured party will prevail.

    Comment by JC Dill — January 23, 2012 @ 10:18 am
  2. You’re right, you DON’T know liability law in Italy.

    Comment by Anna — January 23, 2012 @ 7:24 pm
  3. Concerning the last section about refunds…

    Does that mean that the cruise line could drop you at ANY port (or any rock in the sea) and expect you to pay your own way to where ever you were headed?

    My suggestion to Costa would be to be fairly liberal in their settlements. They have severely damaged their reputation and if they nickel and dime the passengers, they might find themselves out of business. Nobody would ever take a chance on them getting to their planned destination.

    Comment by BobL — January 23, 2012 @ 7:58 pm
  4. It’s almost as if they’re saying “take a cruise at your own risk or don’t take the cruise at all”.
    I’ll be opting to not take the cruise…ever.

    Comment by Jack — January 23, 2012 @ 8:48 pm
  5. What does Anna know, I wonder, to make such a comment?

    Comment by Dewin — January 24, 2012 @ 11:19 am
  6. The lawyers in the USA are coming out of the woodwork saying ” I’ll save you and make you Millions ” While they bill you by the minute,filing wasted documents in fla. and other courts where their is absolutely no jurisdiction. the only jurisdiction in this case is in the Genoa Italy court system. You can only use Lawyers that are affiliated with that court.
    These snakes should be disbarred.
    Your better off finding a friend from the old country and pay the friend to get you hooked up properly and compensated . remember this isn’t in America where everyone sues for billions . that stink doesn’t fly in Europe especially with Americans that feel entitled. Plus the fact were not that liked anymore. 70 grand Max plus a pittance for valuables lost.
    That is why money makes money my friends.Italy and Europe are broke. Be warned

    Comment by R L — January 28, 2012 @ 1:30 am

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