Feb 21 (Reuters) - When Walter Henry Alderfer learned last month
about the Costa Concordia shipwreck off Italy, it brought back
In April 2007, he, his wife and his daughter were aboard the
Sea Diamond cruise ship when it struck a reef off Greece and
sank into the Aegean Sea. Screaming passengers fought over life
preservers, Alderfer says, and his wife hurt her neck and later
Five years later, the family is still seeking redress - and
its experience may be instructive for survivors of the Concordia
They turned down an offer of compensation by the owner -
Cyprus-based Louis Cruises, a unit of Louis PLC - that included
a free voyage. They filed a federal lawsuit in New York but
settled for $2,500 - less than his wife's medical expenses and
the family's lost belongings, he says - because the tickets
required them to sue in Greece. An additional suit in Greece is
still dragging on.
An attorney for Louis Cruises said many passengers were
satisfied with the compensation offer, and Louis reached "fair
and reasonable" settlements with some U.S. passengers who sought
additional awards. She also said the evacuation was swift and
Most cruises proceed without mishap. But in the rare cases
when passengers do suffer serious injury - at least 17 died in
the wreck of the Costa Concordia on Jan. 13 - they can face
formidable obstacles in recovering significant damages, an
examination by Reuters shows.
The cruise business - led by industry giant Carnival Corp. &
PLC, whose Italian subsidiary owned and operated the doomed
Costa Concordia - has put in place over the years a legal
structure that ring-fences operators from big-money lawsuits.
The rules for seeking redress are spelled out in complex,
multi-page ticket contracts that passengers may not receive
until right before boarding. Victims are often required to file
suits in remote jurisdictions. The wording has been the subject
of decades of court battles.
Thomas Dickerson, a New York state judge who has written
extensively on travel law, says the legal hurdles resulting from
the industry's victories over the years give operators the upper
hand in litigation and make the business highly profitable. The
industry faces "fewer payouts because of all the roadblocks," he
Cruise industry officials say their contracts streamline the
litigation process, prevent frivolous claims and lower cruise
costs for passengers.
In the case of the Costa Concordia wreck, the ticket
contract stated that "all claims, controversies, disputes, suits
and matters of any kind whatsoever ... shall be instituted only
in the courts of Genoa, Italy."
Many survivors are now discovering the challenges of the
Italian court system.
Italian lawyers rarely accept cases on a contingency basis,
so clients may have to pay them up front to take a case. And
personal-injury cases can drag on for years, especially if there
is a parallel criminal investigation. The Costa Concordia's
captain is under investigation for allegedly abandoning ship.
That probe must be completed before evidence will be made
available to plaintiff attorneys in civil cases, said Alexander
Guttieres, a Rome lawyer who has litigated major personal-injury
"I've done cases that took seven years and are not nearly as
complicated" as the Costa Concordia case, he said.
Some U.S. plaintiff lawyers are attempting to test the Costa
Concordia's contract terms by bringing action in Florida, home
base of Carnival Corp. In one case, 39 survivors are seeking at
least $528 million in damages in a lawsuit alleging negligence
that was filed in a state circuit court.
Marc Bern, the lead plaintiffs' attorney, said he believes
the contract terms that require lawsuits to be filed in Italy
are "null and void by virtue of the extreme nature of the
conduct" of the captain. But U.S. courts have held that such
clauses are valid.
The Costa Concordia is owned by Genoa-based Costa Crociere
S.p.A., whose parent company is Carnival Corp., the world's
largest cruise company with a market share of nearly 50
percent. Carnival's other cruise lines include Princess Cruises,
Holland America Line and Cunard.
A spokesman for Carnival Corp. declined to respond to
questions for this article. A Costa Crociere spokesman in
Florida said the company does not comment on litigation.
Over the years, Carnival and its competitors have changed
their ticket contracts in ways that make it tougher for
passengers to bring injury claims to court or collect large
One concerns where passengers must file lawsuits. That issue
has been contested all the way to the U.S. Supreme Court.
The Supreme Court case began with a cruise that real-estate
broker Eulala Shute-Wood took on a Carnival ship bound for
Mexico from Los Angeles in 1988. During a cake-decorating
demonstration in the ship's kitchen, she fell on a freshly
washed tile floor and hurt her back.
In an interview, Shute-Wood, now 75 and retired, said she
received no medical attention until disembarking in Puerto
Vallarta, Mexico. The experience, she said, ruined the trip for
her and her husband and she sued in her home state of Washington
to get a refund.
Carnival fought to dismiss her case because it was not filed
in the state of Florida, as the ticket contract then stipulated.
In 1991, the Supreme Court, in a 7-2 decision, sided with
Carnival, ruling that the clause helped to avoid confusion over
where to sue when an incident occurred in international waters.
The case, Carnival Cruise Lines Inc. v. Shute, also affirmed the
legality of such clauses, which are now common in cruise tickets
and many other commercial contracts.
Andre Picciurro, a San Diego, California, attorney with Kaye
Rose & Partners LLP, which serves as general counsel to the
Cruise Lines International Association, said the so-called forum
clause helps to "eliminate wasteful litigation" and "provides
predictability for the passengers and the cruise lines."
Shute-Wood said requiring her to file her suit in Florida
represented a hardship. She said she didn't know any attorneys
there and feared the costs would be far more than what she had
hoped to recover. "We didn't even consider it," she said. After
the Supreme Court sided with Carnival, the case was quickly
resolved for what her attorney said was a small sum.
Carnival Cruise Lines, headquartered in Miami, later
narrowed the forum clause on its ticket contracts. By around
2000, passengers were required to file suits in Florida's
Miami-Dade County, rather than anywhere in the state. About two
years later, Carnival tickets stated that claims could only be
filed in federal court in Miami, provided it had jurisdiction.
A Florida appeals court upheld the federal court requirement
Gabrielle D'Alemberte, an attorney with Robert L. Parks,
P.L., in Coral Gables, Florida, said in recent years cruise
lines have also tightened the rules regarding legal actions
involving shore excursions. Increasingly, passengers are
required to sue the excursion company, not the cruise company,
in the event of injury, she said, adding that the chances of
recovering any damages are very unlikely. D'Alemberte is
representing three Costa Concordia passengers.
Jennifer and Joseph Henderson discovered the limits of a
cruise company's liability following an ill-fated honeymoon on a
Carnival cruise in the Caribbean in 1998, according to federal
court records. They booked a catamaran excursion to the island
of St. Lucia. Although the catamaran was not operated by
Carnival, it bore the Carnival logo, and the boat's crew wore
Carnival shirts, according to court records.
The catamaran struck a reef, and the couple suffered
multiple injuries. In federal court in Miami, they alleged they
ended up spending most of their honeymoon in pain and seeking
medical attention, and sought at least $100,000 in damages. The
court dismissed the case because their ticket stated that
independent contractors operate shore excursions and Carnival
assumed no responsibility for any injuries.
The Hendersons couldn't be reached for comment.
Even in cases of deaths aboard cruise ships due to
negligence, surviving family members may receive little
compensation. That's because of a 92-year-old U.S. law that
deals with redress for families of people who die at sea.
Richard Liffridge set sail with his wife on the Star
Princess cruise ship from Fort Lauderdale, Florida, to the
western Caribbean in March 2006 to celebrate his 72nd birthday.
Four days into the cruise, a fire broke out in the middle of
the night. Liffridge and his wife tried to escape by crawling
out through a wall of black smoke, according to an investigation
by the government of Bermuda, where the ship was registered. The
emergency hallway lights were dim, staff didn't man emergency
phone stations, there were no balcony sprinklers to contain the
fire, and the fire door the Liffridges were instructed to use
was closed, the investigation found.
According to a lawsuit brought by Liffridge's family, the
last words his wife heard him say were, "Don't let me die."
An autopsy showed Liffridge died from smoke inhalation. The
family sued Princess Cruise Lines Ltd. - part of Carnival Corp.
- for wrongful death. The case was settled, but one of his
daughters, Lynnette Hudson, said her family only received money
for funeral expenses. According to their attorney, that's all
they were entitled to under U.S. law.
That law - the 1920 Death on the High Seas Act - allows
families of those killed due to the negligence of a ship owner
to collect for lost financial support.
Miriam Lebental, the California attorney who represented
Hudson, said that because Liffridge was retired, there was no
loss of potential earnings, and he did not provide financial
support to Hudson or her siblings.
"It was horrible because what it basically told my family
was that my father's life was worth zero," said Hudson, an
insurance-claims adjuster from Delaware, who was not on the
cruise. Carnival declined to comment on this or any other legal
The United States is not a party to an international
maritime treaty - known as the Athens Convention - that
establishes liability for loss of life, personal injury or loss
of luggage at sea. Nor is Italy.
The final cost of the personal liability claims in the Costa
Concordia case won't be known for years. But the ship's owner is
covered by insurance with about a $10 million deductible,
according to Carnival Corp.'s recent financial filings.
Walter Henry Alderfer, whose wife was injured in the sinking
of the Sea Diamond in 2007, is pinning his family's hopes on a
lawsuit filed against the government of Greece over allegedly
faulty nautical charts that the ship owner blames for the wreck.
But he's not optimistic. "It's been slow going," he said.
(Reporting by Tom Hals, Andrew Longstreth and Steve Stecklow;
Additional reporting by Tim McLaughlin and Philip Pullella)
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