Law: Call a lawyer, we're sinking

The two ships that collided in the Channel had barely docked before the lawyers weighed in. So who's suing who?

Writs are poised in the aftermath of the dramatic collision between two ships in the English Channel two weeks ago. Lawyers representing the cargo ship Ever Decent and the luxury cruise liner Norwegian Dream are busy gathering evidence in support of potential liability claims to be made against each other.

Estimates so far put the final bill for the total claims as the largest ever involving a crash on the high seas, potentially running into tens of millions of pounds.

A clutch of top City law firms have already been instructed to act in the various claims. And if ever there was a case which demonstrated the dominance enjoyed by London's lawyers in the international shipping market then this is it. Ince & Co is acting for Ever Decent and Stephenson Harwood is to handle all English aspects of the case for the Norwegian Dream. At least three other firms are believed to be acting for the two ships' insurers.

The 46,000-ton luxury cruise liner and the 52,000-ton Ever Decent collided 20 miles off the Kent coast. Those on board had an extraordinary escape after the crash crumpled the bow of the seven-year-old liner and left a gaping hole just below the waterline. Five containers from the Ever Decent fell on to its decks. The impact flung sleeping passengers from their beds and hurled furniture around the cabins. Twenty-one holidaymakers and eight crew suffered minor injuries.

Labour MP Linda Perham was just one of several passengers who couldn't resist making the comparison with the Titanic. However, the Bahamian-registered liner was able to limp into Dover harbour.

Now that the drama is over, the lawyers are calmly assessing the liability. Chris Moore, who is leading the Ince & Co team, says his clients believed that the Ever Decent had the "rules of the road" on its side and if the case came to court would be making that point. "We had right of way and have the better end of the stick," claims Mr Moore.

The Ince & Co team is also preparing claims in respect of costs incurred for the salvage of the Ever Decent which has only just docked in Zeebrugge and is currently undergoing a comprehensive survey. There are also separate claims for damage sustained to some of the Ever Decent's nine hundred containers which hold a range of items including whisky, confectionery and keyboard instruments.

Simon Tatham, one of two partners in Stephenson Harwood's admiralty group, said he could not comment on the merits of any potential litigation but acknowledged that his solicitors, many of whom are former merchant naval officers, were working with Norwegian lawyers in preparation of their own case. The Norwegian lawyers have now taken over the running of the case but are retaining Stephenson Harwood to act for them in the English jurisdiction and, if necessary, the Admiralty court in London.

At this stage each side's case is still being formulated, but other shipping lawyers are keeping a keen watching brief on the case. Michael Lax, a shipping expert with the law firm Lawrence Graham, said the television news portrayal of a collision where the two ships have come together at right angles, would support the Ever Decent claim. He says if this was the case the Norwegian Dream would have a duty to avoid all ships approaching from the starboard.

But, says Mr Lax, there might be another possible scenario. "Cargo ships are very fast vessels and there might be a possibility that the Ever Decent was overtaking the Norwegian Dream and cut across."

If that was the case, then Norwegian Dream would have the stronger case. An attempt to overtake the Norwegian Dream would, according to rule 13 of the International Regulations for Preventing Collisions, have placed the onus on the Ever Decent to avoid collision.

This "bump in the night" in the English channel has surprised many lawyers. "Twenty years ago there used to be a lot more of these kind of collisions," says Mr Lax. "In this day and age when ships are equipped up to the gunnels with all conceivable devices, it's surprising that human error can play a role."

But Mr Moore acknowledges that most shipping cases are settled well before the lawyers reach the steps of the court. The rules of discovery mean that both sides will know a great deal more about the strengths and weaknesses of their cases in the coming weeks.

Since the Ever Decent has only just reached Zeebrugge, salvage and shipping status reports are bound to be delayed.

But the claims being brought by the passengers are already well under way, with lawyers seeking to bring a class action in America. Two passengers, John and Mary Hutton, have filed a suit against Norwegian Cruise Lines under US class action rules. This will give the other passengers, including the British ones, the chance to join the action in America. It could also create the cross-jurisdictional situation where the passengers are suing in America while the ships are bringing their action in London. Few of the non-US passengers will complain that their contract of passage permits Norwegian Cruise Line to use American courts to settle their claims, as US courts are traditionally recognised as making more generous awards.

The two lead passengers are hoping to be able to represent the interests of more than 1,700 passengers in the action against the company. They have already filed a complaint alleging negligence by the company, which led to the collision, which they say caused injury, fear, and mental and emotional distress.

Never the less, class actions comprising passengers involved in collisions at sea are rare. Much more common are cases where passengers jointly sue as the result for food poisoning or delays in sailing.

Aside from the negligence and personal injury action, the salvage claims are likely to be separately dealt with by arbitration in London.

But wherever the legal actions are heard, the owners of both the ships - and their insurers - are bracing themselves for multi-million pound losses. The final bill, says Mr Lax, will be in the tens of millions of pounds, and may even challenge the record costs that resulted from the Sea Empress environmental disaster off the Welsh coast in the mid-Nineties.