Cruise Ship Settlement - High Seas Justice

The wife of George Allen Smith now has settled the lawsuit arising from his disappearance on his honeymoon cruise. The amount seems affected by relatively unpublicized laws limiting cruise ship damages.

We view this settlement as providing inadequate monetary incentives to the cruise ship industry. Here's why:

First, who is George Allen Smith? According to Wikipedia:

In July of 2005, Royal Caribbean was plagued by a controversy that involved the disappearance of one of the passengers, George Allen Smith. Although the cruise line claims that his death was the result of an accident, evidence has shown that there may have been foul play involved. Blood was found in his cabin and on the side of the ship where he allegedly fell overboard and drowned.

This is not just about the bizarre disappearance of Mr. Smith on his honeymoon cruise.

It is about the limitation on liability of cruise ship lines to their passengers. Isn't $1,000,000 a lot of dough?

Well yes it is, but not relatively speaking. It is nowhere near the amount necessary to make a noticeable financial impact on a billion dollar company. In our opinion, it does not create a large enough incentive for cruise ship operators to fully ensure the complete well-being of their passengers, and to pay if they fail - whether by inadvertence, negligence or recklessness.

It makes you wonder, why take a vacation on a cruise ship, if they do not have full incentives to keep you 100% safe - even from inadvertence? According to a Fox News quote, full lawsuit damages cannot be used against cruise ship lines. In particular, "Maritime law limits settlements to economic damages such as lost wages, rather than other damages such as pain and suffering".

Generally speaking, we prefer to reduce the damages awarded in personal injury lawsuits. However, such limitations are not generally imposed. Why would we disagree with a limitation on cruise ships? If anything, we feel they should have a higher duty of care to their passengers than most other companies. Yet instead, the law evidently gives special limitations.

If you've ever taken a cruise (and stayed sober for at least part of it!), you know that you really are in the care of the cruise line. You can't just get off the boat whenever you want. After all, when you are 100 miles offshore, where do you go?

• Hop on a seagull and leave? No.
  
• Take the life raft? No.
  
• Call a helicopter? No.

So you are stuck and at the mercy of the crew of the ship. Now usually you are fine, except in some of those highly publicized cases of illnesses.

But what happens if you become unsafe? The cruise line has competing interests. On the one hand, they have their public and marketing image to maintain. If people get robbed or become ill on their ships - it's bad PR. However, if they can limit the news, they can manage the PR. If you get murdered or disappear. Again bad PR. So the marketing gurus may want to manage that news too.

But what about loved ones left behind? They can sue the cruise line.

According to Fox News, Mr. Smith's relatives had a lot of trouble making headway in court - even getting discovery like door security logs, finally provided only after they agreed to drop the case and settle. Also, the damages the cruise line faces are limited. If you get mugged or murdered in Wal-Mart, the store generally can face a full panoply of discovery and damages. So they are highly incentivized to keep customers in their care secure. The cruise lines' liability is severely restricted - even though their passengers are far more dependent on the ship crew than Wal-Mart customers might be on the staff. After all, if you feel unsafe at Wal-Mart, you just walk out of the store and go to Target or Sears. On the cruise ship, you can't just walk away, and are encouraged to have a good time, whether that means recreation, eating, drinking or gambling.

So, what is the solution to this dilemma? The cruise lines want the limitations on their liability for the very reasons made evident in the situation with the disappearance of George Allen Smith. They want to be able to limit their monetary risk. On the other hand, for passengers this could become disastrous - for the very same reasons. The cruise lines are not fully incentivized to maintain 100% security and safety on their ships. Our opinion is that the problems of food poisonings and safety issues will keep recurring on cruise ships until the monetary risks are balanced.

How do we balance the monetary risks? Do not count on Congress enacting laws repealing the liability limitations. The cruise industry has a lot of interest in lobbying to maintain the status quo. There is no similarly funded counter-lobby. Accordingly there is no viable political pressure to change the damages limitations.

The only way security will improve on cruise ships is for passengers to stay away until the law is changed. Only then will the cruise lines have the proper monetary incentives to get a bill through Congress and improve.

Send a message to the cruise industry in 2007 in honor of George Allen Smith. Drive or fly.




Ship photo by Jordgubbe.