IMX Discussion: Avoiding Legal Exposure And Liability In Natural Disasters

Boat owners and operators have to contend not only with the elements and market conditions; they also have to be on constant alert for occasions that might expose them to legal liability.

How to avoid that exposure, especially during and after a natural disaster, was the topic of an informative panel at the recently concluded Inland Marine Expo. It was presented by the father-and-son duo of Maurice Hebert, longtime maritime attorney and founder of the Greater New Orleans Barge Fleeting Association (GNOBFA), and his maritime-attorney son Marc, of Jones Walker, who has largely taken over GNOBFA duties.

Rounding out the panel was Alan Savoie, the southern director of GNOBFA, longtime friend of both Heberts and operator of the Upper St. Rose Fleet in Hahnville, La.

The hypothetical situations presented by the panel mostly revolved around hurricanes—no surprise, since the Gulf Goast has been battered by several large hurricanes in recent years.

Marc Hebert opened by laying out the three rules of avoiding liability:

1)  There is no liability without fault or negligence;

2)  to avoid fault or negligence, operators must take “reasonable and prudent” care before, during and after an event (such as a hurricane);

3)  finally, record-keeping is of paramount importance. It doesn’t matter what you did if you can’t document it. “Records must be pristine, and you can win or lose in court based on records, or lack of them,” said Hebert.

Maurice Hebert remarked that the hoary legal terms “acts of God” and “force majeure” are often invoked by companies or other entities seeking to avoid liability.  No one really knows what they mean, he said, although they are usually understood to include both acts of nature (floods, storms, etc.) and acts of human beings (riots, wars etc.). A common definition is, “an event or events that could not be foreseen, with effects that could not have been avoided by the exercise of reasonable prudence, diligence and care.”

Savoie described the actions his fleet operation takes in response to the various stages of hurricane alerts, using Hurricane Katrina as an example. His fleet sends letters to all its customers on or before June 1, the official opening of hurricane season (which extends until November 30), advising them of the actions the fleet may take during hurricanes. When a hurricane alert hits “condition X-Ray,” for example, when a storm is predicted to hit within 48 hours, the fleet double-rigs all barges and boats, with ropes on top of wires. At condition Yankee (storm is 24 hours out), the fleet adds extra rigging, and is sure to diagram that rigging on a computer program. This could be very important later for documenting due diligence, especially if storm activity disrupts or breaks the rigging loose.

Savoie said that when Hurricane George threatened to hit, he warned one customer to move 30 to 40 barges to another location, an operation that cost about $50,000. George ultimately stopped in the Gulf before turning, but Savoie said he didn’t regret being extra careful.

Savoie noted proudly that New Orleans Harbor was back in business 24 hours after Katrina hit.

What about after the disaster has receded and you are assessing damage? Maurice Hebert said your first call should be to a marine surveyor, and only the second call to the Coast Guard. “You don’t want the Coast Guard leading any investigation,” he said. “If your surveyor is there first, the Coast Guard will defer.” Liability can arise for failure to take proper actions before, during and after an event, he reminded the audience.

Marc Hebert noted the importance of retaining all evidence of line breakages, equipment damage, etc. In many cases that means retrieving bent or damaged equipment, pieces of wire or line, etc. and keeping them safe in a controlled environment. Naturally, the chain of custody of each piece of evidence is crucial. In one case, said Marc Hebert, a company’s “force majeure” defense failed because it did not replace lines that broke after a storm.

If it’s possible, said Marc, have the Coast Guard pre-approve your hurricane plans. In New Orleans, said Savoie, the Coast Guard requires all fleets to have such a plan, one that includes evacuation plans. He said some fleets in the area rent extra fleet space in other locations, to be sure of having space in case of hurricanes.

A questioner who said he was with Sabine Surveyors said a good plan is to keep video records of equipment and preventive operations.