Hot Docs: Carnival sued over Costa Concordia disaster for $460 million

February 2, 2012

Costa Concordia disasterOn January 13, 2012, Italian cruise ship Costa Concordia partially sank after hitting a reef off of the Italian coast.

If any lawyers out there are like me, as you were watching the disaster unfold, you wondered to yourself about what kind of liability the cruise ship company has and the lawsuits that will arise from this occurrence (such musings are a typical byproduct of law school).

Well, now the first lawsuit related to the disaster has been filed.

On January 27, six individual passengers of Costa Concordia during its doomed final voyage filed suit against Costa Cruise Lines and its parent corporation Carnival, claiming various counts of negligence, along with intentional infliction of emotional distress (IIED).

Although the investigation is still ongoing, some facts already seem to be established, which the complaint, naturally, has included.

According to the complaint, the disaster was caused by “the ship sailing off course and too close to the Le Scole Reef off the coast of Italy, scraping the reef, causing a massive hole [150-165 foot-long] in the side of the ship.”

The decision to change the ship’s course was made by the ship’s captain himself.

Also according to the complaint, after the ship collided with the reef, no alarm sounded.

The passengers could tell that something was wrong because the ship listed and never re-righted itself, and lights flickered on and off.

Unsurprisingly, many passengers tried to abandon ship and board lifeboats, but the ship crew “refused to allow access,” and instead “announced that the problem was only electrical in nature and ordered passengers to go back to their cabins.”

The ship was next steered to Giglio Island where it hit another reef, causing the front of the ship to swing around and became pinned by the rocks.

The complaint states that this was a bad move on the part of the captain that made evacuation procedures more difficult.

Ten minutes later, and an hour and fifteen minutes after the ship first started taking on water, the captain gave the order to abandon ship.

As has already been widely reported, the captain immediately jumped into a lifeboat after giving the order.

The complaint further asserts that no SOS was ever issued, and that the passengers were largely left to fend for themselves.

There’s a bit more detail to the story than that, but even this alone makes it pretty apparent that there was some substantial negligence behind the accident.

Hot Doc: Scimone v. Carnival Cruise Lines

Source: Thomson Reuters News & Insight – National Litigation

The negligence counts in the complaint aren’t your standard ones, though: maritime negligence, gross negligence, and negligent retention.

Maritime negligence is basically just like regular negligence, but the standard of reasonable conduct is tailored to that of maritime practices.

Thus, under the facts asserted, there isn’t a question of whether negligence occurred here.

The negligent retention claim – mainly that Carnival retained the captain’s employment despite their knowledge of his regular practice of doing a “sail-by-salute” (sailing close to shore to “salute” those on land) – seems pretty strong, too.

Of course, neither of these actions is as important as the gross negligence claim (and the IIED claim, which is tied to the gross negligence one).

Why?

Simply because a gross negligence claim allows for punitive damages, which the complaint has asked for in the amount of $450 million (in addition to $10 million in compensatory damages for injuries and property loss).

A successful gross negligence claim would require a showing of willful, wanton, or reckless misconduct.

While that’s typically a hard burden to meet, the fact that the Costa Condordia is the largest passenger ship to ever sink doesn’t help Carnival’s case.

If a finding of gross negligence is made, even if the punitive damages are reduced (which they surely would be), this would be very bad news for the company.

This suit has been brought by only six of the ship’s passengers though there are in excess of 3,000 passengers who were actually onboard at the time of the accident.

Suits by even a fraction of that total number would bankrupt the company, which is probably why it is scrambling to settle all claims with the passengers even as I write this.

Whether this crusade for indemnification is successful will really determine the future of the company, because Carnival may not have one if many more suits like this pop up.