The Fine Print and The Costa Concordia Disaster

Author: Mark B. Hartig

Some Americans take for granted legal protections our court system provides. This may especially be apparent to those American victims of the Costa Concordia accident off the coast of Italy. Many reported accounts say the cause of the accident was human error when the ship was steered off its plotted course and ran aground causing it to sink killing at least 16 passengers and injuring scores of others.

Americans who were on this cruise signed a contract with Costa agreeing that any legal action must take place in Genoa, Italy where Costa’s corporate offices are. And while Costa is owned by Carnival Cruise Lines, an American corporation based out of Miami, the contract passengers have is with Costa Cruises.

It is all but certain that an attorney will file a claim against Costa, and perhaps Carnival here in the U.S., but the odds of claim succeeding in an American court are slim. U.S. Courts have previously upheld forum clauses such as the one in the Costa Concordia ticket unless plaintiff makes a “strong showing that enforcement would be unfair and unreasonable under the circumstances.”

The test on whether the choice of forum would be “unfair and unreasonable” is if (1) its formation was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy or (4) the enforcement would contravene public policy.

It will be very challenging for the American citizens who were aboard the Concordia to invalidate the venue provision of their cruise contract. Their strongest argument would be that they may be deprived of their “day in court” because of the unfairness of bringing the claim in Italy. Apparently a Plaintiff in Italy must post a bond of 10% of their expected damage award to simply file a lawsuit. This cost would certainly be a bar to most people trying to bring a suit. The legal battle though to bring the claim here in the U.S. will also undoubtedly be costly, time consuming and subject to appeals as Costa and other cruise lines would likely vigorously fight a challenge to the venue clause.

While no one likes to contemplate potential disaster in advance of a vacation, the lesson here is that when traveling abroad it is important to review your travel documents to see what limitations on venue and damages are stated. This is especially true if your trip has segments that do not originate and terminate outside the U.S. If there are limits which would not cover you for what you may lose if you were to lose your possessions or be injured, you may want to consider purchasing travel insurance when planning your trip, as you may not be able to count on the American legal system to protect your rights.

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