OceanGate

Much has been made of OceanGate’s release of liability, and whether an onslaught of litigation might be on its way, so we thought we should have a look at it. See the panel left. But before getting to the verbiage, the preliminary question: ''is it even worth taking legal action''?

The basic principles of contract →Go uptown That disclaimer in full I, _____________________________________, acknowledge that I have voluntarily applied to participate in a submersible operation arranged by OceanGate Expeditions, Ltd., a company registered in The Bahamas. I have been informed about the nature of the operation and the risks it presents, including that: 1. The operation includes activities involving subsurface vessels, surface vessels, and/or Remotely Operated Vehicles that are on, near or under the water. 2. A portion of the operation will be conducted inside an experimental submersible vessel. The experimental submersible vessel has not been approved or certified by any regulatory body and may be constructed of materials that have not been widely used in human occupied submersibles. 3. When diving below the ocean surface this vessel will be subject to extreme pressure, and any failure of the vessel while I am aboard could cause severe injury or death. I understand that I may decline to participate in any dive below the ocean surface or any activity of the operation at any time. 4. Support vessels (upon which I may board) are industrial vessels not specifically designed for passenger operations and present many hazards, including, without limitation, large/heavy objects, heavy swinging doors, and low overhangs. These could become even more hazardous in heavy seas. In addition, during the operation I may board small vessels and other equipment that could expose me to property damage, injury, disability, or death. 5. If I choose to assist in the servicing or operation of the submersible vessel, I will be exposed to risks associated with high-pressure gases, pure oxygen servicing, highvoltage electrical systems and other dangers that could lead to property damage, injury, disability, and death. 6. The operation will take place largely at a great distance from the nearest hospital or rescue personnel. If I am injured during the operation, I may not receive immediate medical attention. First aid available on the ship may not be equivalent to what is available on land. I acknowledge that all travel in or around the water on vessels of any type, including submersibles, entails both known and unanticipated risks that could result in physical injury, disability, emotional trauma, death, harm to myself or third parties, or damage to my property. Although OceanGate Expeditions, Ltd., will take steps to provide me with adequate training, equipment, and skilled personnel, I understand that such risks simply cannot be eliminated from any operation. The risks include, without limitation: loss of footing, slips and falls on deck, particularly in inclement weather; harm from falling objects on non-passenger vessels; drowning; and malfunction or failure of the submersible (leading to death or serious injury). Additional dangers may include the hazards of accident or illness in remote places without access to emergency medical facilities and acts of God, such as severe weather. I acknowledge that representatives of OceanGate Expeditions, Ltd., have been available to answer my questions and more fully explain to me the physical demands of the operation as well as the risks, hazards, and dangers associated with the operation. I understand that the foregoing description of these risks is not complete, and that other unanticipated, inherent risks may occur. I am voluntarily participating in the operation with full knowledge of the facts set forth above, including the described risks and unknown risks. I understand the inherent risks in the activities that will be undertaken during the operation, and I hereby assume full responsibility for all risks of property damage, injury, disability, and death. As lawful consideration for being permitted to participate in the operation, and on behalf of myself, my heirs, assigns, personal representative, estate, and for all members of my family, including minor children, I hereby release, waive, and forever discharge OceanGate Expeditions, Ltd., and its owner (OceanGate, Inc.), officers, directors, shareholders, principals, agents, representatives, members, employees, clients, partners, subcontractors and OceanGate Foundation and all of my covolunteers (“Released Parties”) participating in the operation from all liabilities, actions, claims, demands, costs, losses, or expenses which I or my heirs, distributees, guardians, legal representatives, next of kin, or assignees may have against the Released Parties, on account of injury to myself or my property, or resulting in my death, arising out of or in any way connected with my participation in the operation, including travel, to and from the operation site. I hereby assume full responsibility for the risk of bodily injury, disability, death, and property damage due to the negligence of any Released Party while involved in the operation. I hereby agree to defend, indemnify, save, and hold harmless OceanGate Expeditions, Ltd., OceanGate Inc, OceanGate Foundation, and the other Released Parties from any loss, liability, damage, or costs they may incur due to any claim brought in violation of this Release. I further agree that my participation in this operation does not give rise to an employer/employee relationship, and does not bind OceanGate Expeditions, Ltd., to provide any form of workers’ compensation insurance, health insurance, or benefits. During the operation I consent to the administration of first aid and medical treatment, which may seem reasonably advisable, in case of my injury or illness. If I am unable to consent due to unconsciousness, disorientation, or other mental incapacity, I hereby appoint the captain of the support vessel as my attorney-in-fact to consent to any treatment he or she deems advisable. I further certify that I voluntarily assume the risk of any medical or physical condition I may have. I understand that OceanGate Expeditions, Ltd., may contract with independent contractors to provide services, including transportation, during the operation. I understand that OceanGate Expeditions, Ltd., has no control over, and accepts no responsibility for, the actions of any independent contractor involved in providing services during the operation. I have had sufficient opportunity to read this entire document. In signing this document, I acknowledge that if I die, am hurt, or incur property damage during my participation in the Expedition, I may be found by a court of law to have waived my right to maintain a lawsuit against OceanGate Expeditions, Ltd., OceanGate Inc, OceanGate Foundation, and the other Released Parties as a result of signing this Release. If any part of this Release is deemed unenforceable, all the parts shall be given full effect to the extent possible. Any disputes related to or arising from either the operation or this Release shall be governed by the laws of The Bahamas. Any dispute arising from either the operation or this Release shall be resolved in the courts of The Bahamas. Formation: capacity and authority · representation · misrepresentation · offer · acceptance · consideration · intention to create legal relations · agreement to agree · privity of contract oral vs written contract · principal · agent Interpretation and change: governing law · mistake · implied term · amendment · assignment · novation Performance: force majeure · promise · waiver · warranty · covenant · sovereign immunity · illegality · severability · good faith · commercially reasonable manner · commercial imperative · indemnity · guarantee Breach: breach · repudiation · causation · remoteness of damage · direct loss · consequential loss · foreseeability · damages · contractual negligence · process agent Remedies: damages · adequacy of damages ·equitable remedies · injunction · specific performance · limited recourse · rescission · estoppel · concurrent liability Not contracts: Restitution — quasi-contract — quasi-agency Index: Click ᐅ to expand: Contract Tort Restitution Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. 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Is OceanGate even worth suing?

Doubtful. With estimated operating revenue of USD10m per annum and 45 staff, having just had to mount a desperate deep sea rescue probably not got much left to recover. Now, maybe, OceanGate had public liability insurance but, as the submersible was an unregulated vehicle operating in international waters it doesn’t seem likely, and if it did, look out for that schedule of exclusions. Since there was (Q.E.D) no regulatory requirement for insurance, we wonder what appetite there would be amongst underwriters to take on what was, on its face, enormous risk.

If you were a public liability insurer would you insure “an experimental submersible vessel that has not been approved or certified by any regulatory body and may be constructed of materials that have not been widely used in human occupied submersibles?”

What might OceanGate be liable for?

It is a contract;

What does the disclaimer claim to cover?

Inherent risks

For the main, the Release is designed to cover all the “inherent” risks which may arise as a result of an expedition to the ocean floor. These are the sorts of regrettable things that just happen when you are at the frontiers of humankind’s discovery. Unexpected things happen. kinds of risks Includes those of experimental, in approved vehicle.

Negligence of Released Parties

The Release purports explicitly to exclude the negligence of Released Persons:

“I hereby assume full responsibility for the risk of bodily injury, disability, death, and property damage due to the negligence of any Released Party while involved in the operation.”

Would the disclaimer work?

Governed by Bahamas law, for which the ultimate court of appeal is the Privy Counsel which must apply Bahamian law, but as a common law jurisdiction, outside specific legislation, assume it will be broadly along the same lines as for English common law.

However in this case English law is and Bahamian law probably is governed by statute. The statutes are different.

Under Section 2(1) of the Unfair Contract Terms Act 1977, under English Law you cannot exclude liability for death or personal injury caused by negligence:

“A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence.”

But Bahamas law has its own framework, which includes the Unfair Terms in Consumer Contracts Act of 2007, which presumptively regards an exclusion of liability for death or personal injury in a standard form contract as unfair and therefore not binding on the consumer (being a natural person acting “for purposes which are outside his business”):

“Indicative and Illustrative List of Terms which may be Regarded as Unfair

1. Terms which have the object or effect of —

(a) excluding or limiting the legal liability of a seller or supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier; [...]

But was there negligence? Good luck figuring that out. Most likely an omission rather than a commission — failing to check the hull integrity, not noticing stress fractures and so on.

Puts into perspective our banking disclaimer, though, doesn’t it.

See also

• Disclaimer
• Contractual negligence
• Unfair Contract Terms Act 1977