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Signals Special, Number 5, August 2000
Crew Illness and Injury - ESPECIAL
Focus on the Philippines
Over the past few years the North of England has run a very successful loss prevention initiative on
personal injury, aimed at raising the awareness of shipowners and seafarers about the causes of
personal injury and how they may be prevented. However, there is another type of risk that accounts
for a substantial number of claims, crew illness.
This Signals Special will examine some of
the issues connected with crew illness, again
to try and raise the awareness of shipowners
and seafarers about some of the causes, and
preventative measures that can be taken.
Seamen from the Philippines represent the
largest single nationality of seafarers. In view
of this, and some of the problems that have
emerged recently regarding crew claims
amongst Filipinos, the emphasis of this Signals
Special will be on seafarers from that country.
Seafarers are the most valuable asset of any
shipping company and good shipowners realise
this fact and treat their seafarers as any good
employer would treat a valued employee. The
Filipino seafarer especially is essential to the
Injury and illness amongst seafarers
Over the past 5 years crew illness claims
have accounted for 6% of the total cost of
claims made to the Association, compared
with a figure of about 14% for crew injury
claims, so they are very significant. Crew
medical costs are also rising, caused by the
rising costs of medical treatment, amongst
other factors.
Seafarers who are injured or become ill will
normally be dealt with quickly and
sympathetically by an Owner, their P&I Club
and manning agent. The benefits prescribed
by the contract of employment and the
corresponding P&I Cover are designed to
provide the necessary support to the seafarer
when these unforeseen situations occur.
When crew illness is considered, there are a
number of loss prevention initiatives that
can be taken, such as providing a healthy diet
INSIDE:
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DITIO
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global shipping industry at the present time. It
should also be remembered that the income
from Filipino seafarers is very useful to the
economy of the Philippines, so it is in the
interest of the shipowners, the seafarers, the
Philippines government agencies and others
to ensure that their relationship evolves in a
way acceptable to all parties. One requirement
of this is that crew injury and illness claims or
disputes should be resolved in a fair and
equitable way to the satisfaction of all involved
without any delays.
The North of England is keen to encourage
shipowners to look after their seafarers
adequately, and this special edition will
consider a number of factors that are presently
and encouraging a healthy lifestyle on board
ship. However, there has been a significant
increase in the number of claims related to
cases of illness that appeared to be
contracted prior to the commencement of
the period of employment. This Signals
Special will consider illness of this sort and
the loss prevention measures that can be
taken, including the scope of medical
screening and the choice of clinic to perform
the screening, prior to employment starting.
Where there is continuity of employment the
shipowner is aware of the medical records of his
staff, but in cases where new employees are
taken on, adequate pre-employment medicals
should discover pre-existing medical conditions.
Another factor when considering cases
amongst Filipino seafarers is the role of third
party lawyers. These individuals, who often
Problem
Areas
causing problems, and potentially risking
the relationship, between shipowners and
Filipino seafarers.
This Signals Special includes contributions from
Association staff with vast experience in
handling cases involving crew injuries and
illness. There is information on the latest
standard Philippine Overseas Employment
Administration (POEA) employment contract,
and there are also contributions giving a
shipowners perspective and a seafarers union
perspective. Finally, there are contributions
providing an up-to-date picture of the litigation
situation in the United States and Panama. We
are very grateful to all our contributors for
sharing their thoughts with us.
have relationships with lawyers in other
jurisdictions such as the US and Panama,
purport to represent the interest of the
seafarers and may persuade claimants to
allow them to act on their behalf for a
percentage of the settlement, often as high
as 40%. This may even apply in cases where
the settlement is part of the contractual
agreement and the claimant would otherwise
have received 100%. From a loss prevention
perspective, a good relationship between the
shipowners, reputable manning agents, and
organisations such as the ITF who represent
the interests of the seafarers should enable
cases to be settled to the benefit of the
claimants, without being subject to the delay
and disproportionate cost caused by the
adverse influence of external parties.
 TERMS OF EMPLOYMENT
The Associations 1999 questionnaire
The Association has been approached by a
number of members over the past few years and
asked for information about the provision of pre-
employment medicals in the Philippines. Staff
from the Association investigated the various
medical facilities in the Philippines and a
questionnaire was also circulated to members in
1999. The results have allowed the Association
to provide advice to members, some of which is
summarised in the article below.
67% of the ship operators who replied to the
questionnaire employed Filipino seafarers,
totalling almost 18,000 persons. This gives some
indication of the importance of Filipino
seafarers to ship operators. The average cost of
a pre-employment medical was determined to
be US $46, but the cost varied widely from as low
as $15 to as high as $225.
Pre-employment medicals
The incidence of crew illness amongst seafarers
is increasing. In many cases the illnesses relate
to medical conditions occurring prior to joining
a ship. In cases where new employees are taken
on, adequate pre-employment medicals should
discover pre-existing medical conditions.
When considering the issue of claims arising
from pre-existing illness and the loss prevention
measures that can be taken, it is necessary to
address the scope of medical screening and also
the choice of clinic to perform the screening.
Medical Screening.
Many standard pre-employment medicals are
restricted to basic tests which are limited in
scope, probably due to a desire to keep
screening costs to a minimum. However, this
can be a false economy because the cost of
medical claims can quickly exceed the
apparent savings from a ship operators
cheaper screening programme. The advantage
of enhanced screening is that tests can be
performed for particular illnesses which are
known to have led to claims in the past.
two
The requirements for a standard pre-employment
medical in the Philippines include a chest x-ray,
complete blood count, routine urinalysis and
fecalysis, dental and optical check ups and an
ECG for seafarers over 40. However, some of the
common causes of crew illness may not be
detected by the standard test and ship operators
might wish to consider a requirement for
additional tests, such as for Hepatitis B, HIV
and liver and kidney function. Routine drug and
alcohol testing should also be considered.
Crew illness claims represent a significant
proportion of the people related claims the
North of England receives. Over the past five
years the Association has dealt with over 1,500
such claims, although obviously not all involving
Filipino seafarers. The average cost of a crew
illness claim during that time was almost
The most common problems which may lead
to claims if they are not identified prior to the
commencement of the period of employment
include:
Hepatitis
Hypertension
Heart disease
Liver disorders
Diabetes
Psychological disorders
Reassuringly, there is a general acknowledgement
that whilst enhanced medical screening will
cost more at the outset, there will be reduced
exposure to claims over a period of time.
Consequently, many owners are already
paying the additional costs to have enhanced
medical screening performed.
Choice of Clinic.
Once the types of appropriate test have been
identified it is necessary to nominate a clinic
that will perform the examinations with
diligence and objectivity. The Association has
identified criteria that should be considered
when nominating a clinic to perform pre-
employment medicals. The principal criteria
for selecting a clinic are:
Well qualified doctors being permanently in
attendance as well as fully qualified nursing
staff, lab technicians, dentists and opticians
and staffing levels sufficient to cope so that
corners would not be cut at busy periods.
Clean and well equipped clinics with
the apparatus necessary for stringent
medical testing.
US $11,000. It is interesting to compare the cost
of a pre-employment medical with the cost of an
average claim.
We would like to take this opportunity to thank all our
members who helped us by participating in the survey.
No. of Claims 1995-1999
Others 77%
Crew injury 13%
Crew illness 10%
Value of Claims 1995-1999
Others 80%
Crew injury 14%
Crew illness 6%
More stringent testing of candidates over
the age of 40.
Retention of medical records for at least a 5
year period so that the clinics can carry out
reviews and follow ups, confident in the
knowledge that they have a full accurate
history to hand.
Employment by other agencies, for example
well known multinational companies or flag
States such as Norway, who demand high
standards and who take it upon themselves to
inspect the facilities on a regular basis to ensure
that the standards are being maintained.
Evidence of self imposed quality control such
as ISO9002 accreditation, or working
seriously towards same.
A fixed scale of fees evidencing the various
levels of examinations available and the
costs of same.
Availability of facilities for regular
inspection. Good clinics will be very willing
to allow access to view facilities and to
discuss the services available.
In the Philippines, strict interpretation of
the Medical Rating System for Overseas
Contract Workers and Seafarers with a fixed
procedure for dealing with candidates who
are unfit according to the rating system.
(Copies of the medical scales are available
from the Association on request).
Details of the clinics in the Philippines which the
Association has had the opportunity to visit and which
fulfil the above criteria can be obtained from Judith
Burdus at the Association.

POEA Contract
The Philippine Overseas Employment Administration (POEA) is part of the Department of
Labor and Employment in the Philippines. It formulates the guidelines for the employment of
seafarers as dictated under the standard POEA contract. This contract sets the minimum
standards by which the Filipino seafarer may be employed. The contract is reviewed periodically
after consultation and negotiation with a number of parties. After the latest round of negotiations
a number of issues have been resolved and some significant changes made to previous contracts.
In the following article, Ruben Del Rosario reviews the principal changes.
Significant changes in the amended POEA contract
By Ruben Del Rosario, Del Rosario / Pandiphil, Manila,
Philippine Republic
The amended Philippines Overseas Employment
Administration (POEA) contract came into
effect on 26th June 2000. The contract is
prospective in application, meaning it only binds
those Filipino seafarers deployed from 26th June
2000. There are several significant changes
which deserve some discussion.
Work-related death, injury and illness
Work-related illness, injury or death is now
incorporated in the contract.
There are two conditions for work-related
death to be compensable. The death must
result from a work-related injury or illness and
it must have occurred during the term of
employment. However, when the seafarer dies
after his term of employment but his death
was a result of work-related injury or illness
suffered during the term of employment, the
resulting death is still compensable.
Work-related injury is defined as injury(ies)
resulting in disability or death arising out of
and in the course of employment. The basic
requirements for compensability are that the
injury arose out of and in the course of
employment and that it occurred during the
term of the contract.
Work-related illness is any sickness resulting to
disability or death as a result of an occupational
disease listed under Section 32-A of this contract
with the conditions set therein satisfied.
For an illness to be compensable, it must not
only be listed under Section 32-A, but also
occur during the term of the contract.
Further, each of the 21 illnesses listed under
Section 32-A enumerate certain conditions for
the illnesses to be work-related. It is important
to review these conditions, as they are
material to the determination of whether the
illness is work-related.
Those illnesses not listed under Section 32-A
are disputably presumed work-related. This
means that illnesses suffered by a seafarer
during the term of his contract are presumed
compensable unless substantial evidence is
presented by the employer to prove that the
illness is not work-related.
Third doctor
The seafarer may now dispute the disability
grading of the company-designated physician.
The seafarer may appoint his own doctor and
if there is a disagreement as to the disability
assessment, the parties may appoint a third
doctor whose decision is final and binding.
Concealment of past medical condition
A seafarer who knowingly conceals and does
not disclose a past medical condition,
disability and history in the pre-employment
medical examination constitutes fraudulent
misrepresentation and shall disqualify him
from any compensation and benefits. There
must be intentional concealment, which means
that the seafarer knows of his illness/injury and
still conceals such illness/injury in his pre-
employment medical examination.
Coverage of payment of benefits
(includes tort)
The seafarer or his successor in interest
acknowledges that payment for injury, illness,
incapacity, disability, or death of the seafarer
under this contract shall cover all claims
arising from or in relation with or in the
course of the seafarers employment, including
but not limited to damages arising from the
contract, tort, fault or negligence under the
laws of the Philippines or any other country.
This strengthens the employers defence that
payment of benefits under the contract
releases the employer from any and all claims
whether arising from contract, tort, fault or
negligence under the laws of the Philippines or
any other country.
CREW ILLNESS AND INJURY
Dispute settlement procedures
According to Section 29 the parties with a
collective bargaining agreement (in addition
to the amended POEA Standard Contract)
shall submit to the jurisdiction of a voluntary
arbitrator or panel of voluntary arbitrators. If
no arbitrators are listed in the CBA, the
parties shall choose from the list of voluntary
arbitrators of the National Conciliation and
Mediation Board (NCMB) of the Department
of Labor and Employment. The decision of the
voluntary arbitrator(s) is considered final and
binding although in practice it may be
appealed to the Court of Appeals and the
Supreme Court. For seafarers without a CBA
and only covered by the POEA contract there
is an option to choose between voluntary
arbitration and compulsory arbitration before
the Labor Arbiters of the National Labor
Relations Commission (NLRC).
Prescription
The prescriptive period under the old contract
is one year from the date of the seafarers
return to the point of hire. Under the
amended contract, prescription is three years
from the date the cause of action arises.
Conclusion
It has taken the POEA more than five years to
amend the contract. Several conferences were
held between government, employers and
unions in order to draft the amendments. On
the whole, the work-related provisions and the
release from tort upon payment of benefits
are important concessions to the employer.
However, the extent of benefits will be largely
determined by future interpretation of the
changes by the courts.
three
 SHIPOWNERS AND SEAFARERS VIEWS
The important role of manning agents
Owners and operators will frequently employ
officers and crew from countries different to
their place of business. The gap between the
countries is often bridged by a manning agent
who can supply manpower to meet an operators
requirements. The manning agency may be
wholly owned by the operator, a joint venture or
an independent third party. However the
business is structured, the primary function
remains the same, namely to provide seafarers
with the appropriate qualifications, experience
and fitness levels to effectively serve at sea.
It follows that if the best crew are to be
recruited to man ships and ensure an owners
interests are fully protected, the recruitment
and selection process must be rigorous from
the outset. This is where the manning agent
will be relied upon to ensure the requisite
standards are achieved.
The shipowners view
The International Shipping Federation, ISF, is an international employers organisation dedicated to maritime manpower issues which
represents and provides advice and guidance to its members. The relationship between ship operators and seafarers is crucial to the
continuing success of a shipping company. Well educated, trained and motivated crews have a large impact on all aspects of the
operational efficiency of a ship including the reduction of insurance claims. When this relates to accidents or illness on a ship it is
clearly in the interest of the ship operator, crew members and their representatives and the insurers to co-operate fully to ensure that
fair treatment and compensation are arranged as quickly as possible. In the following article David Dearsley describes this co-operation
as enlightened self-interest where all parties can gain.
The shipowners view
David Dearsley, Deputy Secretary General
International Shipping Federation
Apart from those with a direct responsibility for
accident prevention at sea or ashore, it would be
idle to pretend that many of us like to spend too
much time thinking about personal injury or death
either as something which might happen to
ourselves or as something which might happen to
our employees. Human nature being fortunately
what it is, most of us prefer to dwell on happier
prospects.
Shipowners are no different. The possibility that
seafarers they employ might suffer injury or death
from an accident on one of their ships poses a
number of potentially very difficult and sensitive
problems, and finding solutions is not helped by
the fact that, unlike loss or damage to buildings or
equipment which can be replaced or repaired, in
too many cases accidents at sea cause irreparable
harm to the health and well-being of seafarers or
their dependants.
While shipowners cannot eliminate the
consequences of accidents, they do try to minimise
the distress for seafarers and their families as
much as is possible. This means making sure that
seafarers are given proper medical care while in
hospital, that they or their families are adequately
financially compensated for any residual loss or
four
It is apparent that the standard of service
offered by different agencies can range from
the very good to the less than satisfactory.
There are however certain guidelines which
can be considered and may assist in
determining whether an agency offers levels of
service which are compatible with an owners
expectations:
Externally audited quality assurance such as
ISO 9002.
High levels of staff retention which gives
access to service histories and indicates crew
satisfaction.
In-house training facilities or affiliation with
a training organisation to meet STCW 95
training requirements.
Official recognition by government bodies
such as the POEA in the Philippines.
disability they may suffer and that claims are
settled with the minimum of delay and
inconvenience. This is where shipowners look to
the P&I Clubs to provide assistance which goes far
beyond the responsibilities of any conventional
third party liability insurer.
Obviously, not every case handled by P&I Clubs
proceeds without problems being experienced. It
is inevitable that disputes will arise over the
degree of disability which results from an
accident, the degree of any contributory
negligence which might be involved and the
amount of any financial compensation which
might be due.
Last October a special IMO/ILO working group
meeting was arranged in order to discuss
potential problems with arrangements for
providing death and disability compensation to
seafarers and their families and, following this, a
joint ISF/ITF meeting was held in February this
year to continue the discussions. In support of
their arguments for improvements to the current
arrangements for providing compensation ITF
produced a list of twenty-four cases spanning the
past five years in which, in their view, abuses had
occurred. A number of these cases involved
Filipino seafarers.
ISF fully accepts that the ITF list may well not be
exhaustive, and we also accept that even one case
of abuse, if proven, is one too many. But this must
Formal procedures to confirm validity of
certificates of competence and pre-entry
medical certificates.
Up-to-date service records and references
from past employers.
Willingness to use owners nominated pre-
entry medical clinic and to have medicals
performed to standard required by owners.
The identity of an agencys other clients can
give an indication of compatibility with an
owners own standards and requirements.
In addition to insisting that manning agents
fulfil these criteria there is no substitute for an
owner visiting potential manning agents in
person to assess the adequacy and suitability
of the operation.
be set against the tens of thousands of cases dealt
with by the P&I Clubs which are settled quickly,
fairly and without any disagreement. If genuine
problems exist, ISF and the International Group
of P&I Clubs have agreed that they should be
investigated and, if necessary, corrected, but on
this evidence the record of claims handling by the
Clubs compares very favourably with alternative
forms of insurance.
But the Clubs have also taken a number of
positive initiatives to reduce accidents at sea and
to increase health awareness. The analysis of
accidents which have occurred, and the time,
place and cause of the accidents, which several
of the Clubs publish, provides invaluable
information to owners on the best means to target
their efforts to reduce accident rates. Also, the
analysis of illnesses which seafarers have suffered
from and which have caused hospitalisation
abroad and premature repatriation, can allow
owners to ensure that pre-shipment medical
examinations are properly arranged to identify
common problems. We can, of course, all do more
to reduce the number of accidents at sea and, with
help from the Clubs, owners are taking this
responsibility very seriously.
This is, of course, enlightened self-interest. But it
is enlightened self-interest of the best type where
both sides gain - owners and Clubs from reduced
costs and seafarers and their dependants from
less chance of injury, disablement or death.

The seafarers union view
In order to provide a fair and balanced view in this very important debate the Association invited
the International Transport Workers Federation, ITF, to put forward their views. The ITF is a
global organisation of transport workers unions which exists to provide help and support for its
affiliated unions and which has for many years campaigned for the rights of seafarers. In the
following article some of the problems that Filipino seafarers have experienced are highlighted. It
is up to the good ship operators, manning agents and regulatory bodies to work together to make
sure that these issues are resolved.
Quality shipping needs quality seafarers
International Transport Workers Federation
Shipping has for many years, and continues
to be, an industry in crisis. This crisis is
manifested by the projected shortage of
suitably skilled and qualified seafarers, the
growing age of the world fleet, the large
number of lives lost at sea, the lack of flag state
implementation and the spiralling increase in
the number of port state control detentions.
Cut throat competition, a huge excess of
second hand tonnage and a system of social
and safety regulation which is easy to evade
has depressed freight rates and made it
profitable and not particularly risky to violate
international standards. Charterers who refuse
to pay even a cent a tonne more to place their
cargo on a ship which is well manned and well
managed contribute enormously to the
problem. Since the majority of industry costs
such as capital, fuel and port dues are fixed,
the bulk of competitive pressure is focused on
manning and maintenance.
In such an environment, it is not surprising
that it is difficult to attract, train and retain
competent seafarers.
The Philippines continues to be the largest
supplier of labour to the international
shipping market. An entire industry is based
around the recruitment of Filipino seafarers.
Yet the informal and frequently corrupt
system by which seafarers are recruited by
manning agents is nothing to be proud about.
Contrary to ILO standards it is extremely
common for seafarers to have to pay bribes to
get jobs, to be threatened with dismissal or
even criminal sanctions for exercising basic
human and trade union rights, to be forced to
sign loyalty letters or indemnity letters or to
pay loyalty bonuses to the manning agent to be
forfeited in case of bad behaviour, or to be
blacklisted if they complain about their
conditions of treatment on board.
In fact every day, far too many people
connected with the shipping industry seem
ready to tolerate a system in which lying,
cheating and falsification of documents is a
way of life in which seafarers who are
desperate for a job are too frightened to
complain about anything - even practices
which threaten the safety of their ship.
Manning and crew training are also
fundamental to the competence of seafarers.
Ensuring a sufficient supply of well trained
seafarers in the long term is something which
requires significant investment. Unfortunately
this is something in which flag of convenience
states (even those which claim to be at the
quality end of the market) show no interest.
They expect the seafarers themselves or the
governments of the labour supply countries
to meet the cost of the training. They do not
create their own training infrastructure but
instead live off the back of others, endorsing
foreign certificates or issuing their own based
on foreign ones. This is a classic example of the
poor subsidising the rich. Whilst it is not the
job of a labour organisation to be involved in
training, two years ago on co-operation with
the ITFs Philippine affiliate, the ITF
Seafarers Trust invested over US$2 million in
a trade union run training institution in
Manila. This is done in the hope of shaming
others in the industry into taking their
responsibilities more seriously.
Equally important are the working conditions
of seafarers. Whilst at one time seafarers were
employed on national ships by owners known to
them who has both a legal and arguably a moral
responsibility to care for them, the attitude now
often is to find the cheapest crew with the
minimum of obligations before, during and
after engagement. The flag of convenience
system with its ability for owners to hop
between flags and pick and choose which laws,
regulations and conditions of employment will
apply on board to whatever combination of crew
nationality they choose had developed a short
term mentality within the industry which is
deeply damaging to the well-being of seafarers.
CREW ILLNESS AND INJURY
Crew members who suffer illness or injury
face an uphill struggle with manning agents to
be paid even minimum entitlements under
their POEA contracts. Even prior to the recent
revisions, manning agents have regularly
alleged that a seafarers illness is pre-existing
(or congenital) and should not be
compensated despite the fact that the crew
member was declared fit to work at a pre-
employment medical with the company doctor.
Quality shipping needs quality seafarers.
Every ship is only as good as the people who
operate it, both on board and ashore. And
conversely substandard social conditions are
an extremely accurate indicator of a generally
substandard operation.
So what can be done to ensure that seafarers
are competent? For companies this must mean:
recruit seafarers properly
train seafarers well
give seafarers decent pay and working
conditions and reasonable hours
give seafarers access to good recreation and
welfare facilities at sea and in port
provide seafarers with a career path which
encourages them to stay in the industry
The ITF believes that the key to ensuring
competent seafarers is a change in the
regulatory system governing world shipping, a
change in the economic conditions facing the
industry and a shift in attitude away from
short term towards long term thinking
amongst shipowners and ship managers.
five
 PROBLEM AREAS

Filipino crew claims in

the United States
The United States is a part of the world where there may be problems associated with Filipino
crew claims. The role of lawyers from different jurisdictions, and their relationship with lawyers in
the Philippines when representing Filipino seafarers, is a controversial subject. In theory, good
legal representation may enable the seafarer to receive an advantageous settlement for a claim.
However, the percentage of the settlement taken as a fee and the time taken to settle the case, if
it is settled at all, may in some circumstances leave the seafarer in a worse position than if all the
parties directly involved had negotiated a fair and timely settlement. In the following article, David
Lawton looks at how the situation can arise where a Filipino seafarer files a claim in the United
States and some of the issues that result.

It all seems to work so well, until...

By David B. Lawton, Terriberry, Carroll & Yancey.
It all seems fair and works so well. We, the
shipowners, hire a Filipino crewing agent
who procures Filipino crew. The Filipino crew
execute individual written contracts that have
been approved by the Philippine government.
The employment contracts incorporate a
standard collective bargaining agreement that
has been approved by the Philippine
government agency in charge of seamen. As
required by Philippine law, the collective
bargaining agreement requires any claims to
be brought in the Philippines and specifically
sets out the compensation scheme, so that the
exact amount of compensation owed to an
injured crew member is known in advance. In
addition, we have never had any problems
with our Filipino crew. This is the viewpoint of
many shipowners when the subject of Filipino
seamen bringing suit in the United States is
raised. It is, in fact, a tidy and appropriate
system until it becomes entangled in the US
system of litigation. Then a ship often is
arrested, security must be placed, and a
serious issue arises as to whether the seamans
compensation for his injury will be decided in
the US court (under US quantum standards)
or in the forum specified in the seamans
contracts (i.e. the Philippines).
For most of the crewing countries of the world,
seamen have been covered for years by
workmens compensation laws that provide
compensation for injuries on a scheduled basis.
The Philippines have regulated all Filipino
seamen serving on foreign flag ships for some
time, setting forth minimum conditions for
employment contracts in which the seaman
and shipowner agree to submit to suit in the
Philippines for any dispute arising out of the
contract, and in which compensation for
injuries is set forth in a schedule. Why, then, do
the US courts intrude upon this system?
Underlying the US reticence to defer fully to
such compensation systems is 80 years of a
different attitude in the US. Every state in the
US has a workmans compensation law which,
with some exceptions, provides that scheduled
benefits are the exclusive liability of the
employer for his employees work-related
injury. However, excluded from these laws are
Federal government employees, railroad
workers, and seamen, whose employment is
covered by US federal law. In the US, the most
significant category of tort suits by employees
against their employers for work-related
injuries are suits brought by either seamen or
railroad workers.
The right of a seaman in the US to bring suit
against a shipowner for injuries due to the
unseaworthiness of the ship, and for
maintenance and cure, has been recognised by
the courts since the early days of this country
as part of the general maritime law. These
rights are independent of statute, and are
viewed by many of the judges in the US as
almost inalienable rights of seamen. Thus,
any attempt by an employer/shipowner to
limit those rights is looked upon with
extreme scepticism and disfavour. The Jones
Act, passed in 1920, supplemented the general
maritime law by affording seamen a right to
sue their employers for negligence. In the US,
a seaman covered by US law cannot contract in
advance out of the protection afforded him by
the Jones Act, nor can he release in advance
the shipowners obligation to furnish
maintenance, cure, and a seaworthy vessel.
Furthermore, seamens releases of such rights,
even if obtained after an injury, are closely
scrutinised because seamen are considered
wards of the court.
The Philippine and US approach to a
seamans compensation are totally different.
Introducing a foreign seamans claim into
the US framework is like pushing the
proverbial square peg into a round hole. It
does not fit well. Originally, the US Supreme
Court addressed the issue by focusing on the
applicable law. In Lauritzen v. Larsen, 345 US
571 (1953), the Court held that absent other
overriding factors, US law generally should not
apply to foreign seamen on foreign flag ships.
As a consequence, payment of Mr. Larsen
under the Danish scheme of compensation was
considered sufficient to cause the dismissal of
his US suit. This traditional approach, with its
strong emphasis on the law of the flag, was
compromised 17 years later by Hellenic Lines v.
Rhoditis , 398 US 306 (1970). In that case, a
Greek shipowner was a permanent resident of
New York, from which city he operated and
managed his shipping company. Despite the
vessel being a foreign flag ship, the US
Supreme Court found US law applicable,
adding the shipowners base of operations as
another factor for the court to consider in its
analysis of choice of law, and thereby muddying
the brighter line set forth in Lauritzen.
Nevertheless, the great majority of US courts
still considered that it was either inappropriate

six

or unnecessary to provide a US forum for the
personal injury and death claims of the
worlds seamen. In cases where US law did not
apply, the doctrine of forum non conveniens
was often used to dismiss cases that had little
or no relationship with the US forum. In
certain state courts, however, the forum non
conveniens doctrine was not available.
The most recent basis for attacking
jurisdiction of such suits in the US has been to
urge the application of the forum selection
clause in the seamans contract. In 1972, the
US Supreme Court changed the course of the
US judicial attitude by favouring the
enforcement of forum selection clauses in
international transactions. BREMEN v. Zapata
Off-Shore Co., 407 US 1 (1972). The US
Supreme Court has consistently followed that
course since that time.
Turning back to Filipino seamen, all of the
above approaches have been utilised to dismiss
Filipino seamen claims brought in the US, and
each has often been successful. Nevertheless,
life is not as rosy for shipowners as it would
seem. Each defence is under attack, and the
viability of Filipino personal injury and death
claims in US courts is still an open matter.
In the choice of law arena, plaintiff attorneys
argue, sometimes successfully, that the
existence of US connections of a shipowner/
manager are a sufficient basis to justify
imposition of US law. Further, some courts do
not consider the application of Philippine law
as any impediment to their continued handling
of the claim. The nature of recovery then
depends upon the US judges interpretation of
Philippine law. Affidavits from Philippine
lawyers that suggest the remedy of seamen
under Philippine law is no different than under
US law have been submitted and accepted by
some courts here, emasculating the Philippine
compensation system.
Forum non conveniens has often been a
successful defence to Filipino seamans
claims in the US. In some states, however,
the doctrine has not always been recognised.
Check before signing
There are a large number of different types of
crew contracts in force throughout the world
but, unfortunately, there are very few
standard contracts. Unless a crew contract is
checked very closely, ship operators may find
they have agreed to terms and conditions that
they were not aware of. Once a term or clause
becomes generally accepted in a contract it is
almost impossible to have it revoked. Some
terms and conditions may even prejudice a
members cover with the Association, causing
problems with the settlement of any claims.
This is obviously not in the best interest of any
of the parties involved.
Recently, however, Florida has applied the
doctrine, and the Louisiana legislature in
1999 changed its law to adopt the doctrine in
maritime cases. Nevertheless, the doctrine
is discretionary, and depends upon a fact-
based inquiry as to the convenience of the
parties and witnesses. An attempt by a trial
judge to maintain jurisdiction can be
reversed by the appellate court only if there
is an abuse of discretion.
Enforcement of forum selection clauses has
been successfully upheld in the US Court of
Appeal for the Fifth Circuit [Marinechance
Shipping Ltd. v. Sebastian, 143. F.3d 216 (5th
Cir. 1998], and in the Louisiana Supreme
Court [Lejano v. Bandak, 705 So.2d 158
(La.1997)]. However, despite the above, cases
are still being brought by Filipino seamen, and
the trial and appellate courts in Louisiana are
not uniformly enforcing the forum selection
clauses. The Philippine government has not
been particularly helpful in this regard. The
Solicitor General of the Philippines has
suggested in briefs filed with the Louisiana
courts that forum selection clauses in the
Filipino seamens contracts are unenforceable,
that they are not binding on tort actions, and
that the Philippines can not have jurisdiction
of a claim if an action is originally brought
in the US. Attorneys attacking the forum
selection clauses of Filipino seamens
contracts often raise one or more of the
following challenges:
the contract does not cover the seaman;
the contract is only for contractual benefits
and the seaman is still free to sue for tort
liability or unseaworthiness of the vessel in
any court which obtains personal jurisdiction
over the defendant;
the ship has been attached or arrested in the
US, and therefore with the security being
here, the case should remain here;
the ship frequently calls in the US and
therefore should be subject to jurisdiction here;
arising from the terms of the contract.
To prevent such problems occurring the
Association requires members to have crew
contracts approved by the Association. This
CREW ILLNESS AND INJURY
the forum selection clause is unenforceable
because it is against public policy of the state,
or because it was the result of overreaching
with respect to the particular seaman;
the Articles of the ship are the seamans
contract of employment, and the Articles of
the ship do not have a forum selection clause
and do not incorporate by reference the
collective bargaining agreement, with its
forum selection clause;
The Philippine Migrant Workers Act of 1995
does not prohibit suits in foreign countries
by Filipino workers.
Finally, if the facts of the casualty involve
other US entities, and especially if the casualty
occurs in US waters, the court may decide that
it is unreasonable to make the seafarer pursue
his recovery in two different fora, and
therefore will keep the entire case in the US.
What can the shipowner do to prevent this?
Only so much. Proper contracts, if Articles are
used, should specify that the collective
bargaining agreement is incorporated, or
that the POEA Revised Standard contract
is incorporated. Further, if there is a serious
injury of a seaman, and especially if such
injury occurs while the vessel is in US waters,
a full investigation should be undertaken,
because the spectre of US litigation continues.
Finally, and most importantly, the shipowner
should be aware that the dispute over the
applicable forum may be the most significant
issue involved in deciding the eventual claim.
Many of these issues are still being decided by
the US courts on a case-by-case basis.
Therefore, it is important to produce
necessary evidence at the trial court level to
defend fully on these issues. A shipowner
victory as to the proper forum can send the
decision on compensation back to the most
legitimate forum for the Filipino seafarer his
own country and avoid the often expensive
involvement of US litigation.
policy is designed to ensure that there are no
unusual clauses in a contract and that the
member will be covered for all the risks
Contracts are generally negotiable and it is
worth spending time to ensure that the terms
are acceptable to all parties.
The Associations aim is to resolve any
problems with a contract before claims arise
so that compensation can be fairly and
quickly awarded in the event of a proper
claim and so avoid any unnecessary
additional stress to crew members or their
families and the ship operator.
seven
 SIGNALS SPECIAL EDITION

Filipino crew claims in Panama

Throughout this Signals Special it has been
argued that an increase in unnecessary
litigation may delay or prevent the settlement
of claims. Since 1996 Filipino crew claims have
lead to enormous problems for shipowners
calling at Panamanian ports or transiting
the Panama Canal. The reason is that
Panamanian law allows injured crewmen of
any nationality, or the next of kin of deceased
crew, to file claims in Panama. This can
result in the arrest of ships, or sister ships,
irrespective of the vessels flag, the nationality
of the owners, the jurisdiction dictated in the
crew contract or where the incident took
place. Lawyers acting in concert in both the
Philippines and Panama sometimes appear
to be using claims by Filipino seafarers as an
excuse to present inflated law suits.
Nearly 30 claims and as many arrest actions
have been filed in the Maritime Court, yet
only a handful have been settled and none
have been litigated successfully through a
final judgement of Panamas Supreme Court
by the Filipino claimants lawyers. In fact, the
only claims which have been decided by a final
judgement of the Supreme Court have all
gone in favour of shipowners. Once again, the
seafarer may be taken advantage of, and any
settlement eroded by lawyers fees.
There is concern amongst many parties about
this situation, including major shipowners
whose vessels have to pass through the
Panama Canal on a regular basis. One result
could be a reduction in the employment of
Filipino seafarers on certain ships.
Various interested parties, including the
Panama Chamber of Shipping, the Filipino
Association for Mariners Employment and the
International Group of P&I Clubs, have been
promoting a bilateral treaty between Panama
and the Philippines, intended to resolve the
controversy. Clause 10 of the most recent draft
provides that claims filed in Panama or the
Philippines by Panamanian or Filipino seamen
against shipowners or ships of any nationality
are to be referred to the country of the
seamens nationality. This provision simply
reflects the greater interest of each state to
protect its own nationals. However, the treaty
is unlikely to be agreed in the near future due
to the uncertain political situation in Panama.
In the meantime, members who have Filipino
crew claims pending, and ships that transit
the Panama Canal, should try to settle the
claims properly and quickly to avoid the risk of
having ships arrested in Panama.
The Association is very grateful to Juan D.Morgan, Jr.
- Partner, Morgan & Morgan - for information used
in this article.

New MAST
poster published
Poster number four of the MAST (management,
safety, training) series accompanies this Signals
Special. It continues the loss prevention theme
by illustrating the practices associated with
conducting pre-employment medicals in a
humorous way.
The MAST series is produced by the North of
England in the interest of promoting good
practice. Further copies of the poster and details
of the many other publications and training aids
provided by the Association can be obtained
from the loss prevention department. Details
and an order form for publications can also be
found on the loss prevention page of the
Associations website at www.nepia.com

Further information
The Association is able to provide more information to members, particularly regarding the choice of manning agents and clinics in the Philippines,
than has been possible to include in this Signals Special.
Any member who requires further information or advice about these issues, or about crew contracts or pre-employment medicals, should contact
Judith Burdus at the Association in Newcastle, or Matthew Moore at the Associations Hong Kong office.

*In this publication all references to the masculine gender are for convenience only and are also
intended as a reference to the female gender. Unless the contrary is indicated, all articles are written
with reference to English Law. However it should be noted that the content of this publication does not
constitute legal advice and should not be construed as such. Members with appropriate cover should
contact the Associations FD&D dept. for legal advice on particular matters.
Signals is published by North of England P&I Association Limited
The Quayside Newcastle upon Tyne NE1 3DU UK Tel: +44 191 232 5221
Fax: +44 191 261 0540 Telex: NEPIA G 53634/537316
E-mail: loss.prevention@nepia.com Internet: http://www.nepia.com

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