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MSC Flaminia. The unjust law and its’ advocates.



I’ve received already two letters explaining to me my general illiteracy with regards to General Average and principles of Marine Insurance. Here is the latest:

Sir,
I have noticed that you are saying General Average is General Robbery. – Please, read up on the general principles of Marine Insurance. General Average is a founding marine insurance principle on which all marine insurance was established in Lloyd’s Coffee House. – Writing the way you do on this subject, establishes you as a not credible source (marked in strong letters by the author) on matters maritime.
As for your student, surely he must have purchased insurance for his shipment! – He probably booked it with a freight forwarder who arranged the insurance for him. All he has to do is file a claim with his insurance company and they will handle the General Average.
The General Average will be handled by the General Average Adjuster who will make a rough estimate of the cost of salvage and everybody pays a bond in proportion to their value and it will eventually be settled once all the bills are in.
On General Average: Because back in the days of Lloyd’s Coffee House the merchants owned their own ships, the underwriting of risk was for both ship and cargo on one policy. – After the functions have been split, the voyage is still considered a “Joint Venture”. Same is reflected in law as well, in this case the U.S. Carriage of Goods by Sea Act according to which a ship owner is liable for a maximum amount of $ 500.00 per Bill of Lading and is only liable if he is negligent and fails to maintain a seaworthy ship but not for the neglect of his servants.
Best regards
Niels B. Lyngso

Let me explain my position and I guess, position of many, why do we find the General Average as General Average Robbery.

Mr. Lyngso,
The General Average you’re talking about is an anachronism and subject to much criticism. The General Average is under attack from those who’re saying it’s a grossly outdated relic of the era of sails and Cutty Sark, when each voyage, each sailing was an unpredictable undertaking with a big chance of a disaster. Let me remind you pending Rotterdam Rules with the  elimination of the "nautical fault defence" clause. Peter Townsend of Swiss Re went further than that and finds the whole idea of General Average as too outdated and incongruous.
You see, Mr.Lyngso, there is a very big difference between sailing ship of coffee–houses era and modern ocean-going boxships. Modern boxship is actually, a state-of-art floating warehouse, operated with the precision of a Swiss clock, and it can’t be compared to the say, clippers, in terms of their vulnerability to natural disasters. You wrote:
“a ship owner … is only liable if he is negligent and fails to maintain a seaworthy ship but not for the neglect of his servants”
But you’re dead wrong. It’s not a seaworthiness we’re talking about, it’s the reliability, the safety of a modern industry complex equal to modern warehouse. Let me give you an example to illustrate the situation the unhappy clients of MSC and NSB found themselves in.
Let’s imagine there is a hotel in a town, known to host anyone who agrees to cash in, a hotel full of pyromaniacs and all kinds of troublemakers. Let’s imagine you check in this hotel, and found there is a gas tank standing next to your door, explosives and inflammables scattered all around in corridors and fire exits, and all kinds of people hanging around any time of day or night. Let’s say a fire broke out, you managed to escape with all your belongings left behind in a room. Let’s say your belongings weren’t destroyed, but the hotel locked them up after declaring General Average. You’ll be advised to look into the contract which you automatically agreed with when checking in the hotel. You’ll see in a multi-page contract, somewhere on the last page, printed in smallest possible font, the details of your rights and your obligations. You’ll be thrilled to find out, that in some bygone era the hotel had to work out General Average insurance coverage as the only way to survive in times, when the hotel was a wooden junk destroyed regularly by slightest earth tremours, landslides, lightning, city fires, rains and Indians on the warpath. All of those disasters were declared as acts of God, subject to General Average, and like holy scripts, live unchanged to the present day. The nowadays hotel is a modern building technically capable of withstanding any natural disasters, short of 9.9 scale earthquake or a direct bomb hit. But there is no safety inside – not that the owners don’t care for it, no – it’s simply the question of economy. They don’t find it profitable to guarantee safety, it’s too expensive, it doesn’t pay off, providing of course, that the General Average is kept an archaic relic, and there are not many hotels around to provide town’s visitors with a safer choice. 
I don’t think you’ll check in such a hotel, Mr.Lyngso, especially if you know all risks involved and you know the legal implications. But what will you do when there is no choice, and you know nothing about your legal status, nor do you care, believing the hotel to be safe and secure, as the ads promise?

Mr.Lyngso, you’re absolutely right in one, legal aspect of the whole matter – nobody is trying to belie the General Average legal status, including me. What I’m trying to say and to claim is something different – I found the whole idea of General Average as being too convenient for the carrier to avoid his responsibility to provide the safety of the transportation. To equal the risk of fire in a warehouse to risks the ships were exposed to in Nelson’ times, like storm for example, is an absurdity, but alas, too convenient absurdity.
Mind you, Mr.Lyngso, I fully understand the impossibility of achieving a guaranteed safety of liner transportation under the present circumstances. I understand that world major carriers simply can’t provide the required for safety thorough (physical) checks of each container loaded on their vessels, they just don’t have enough resources. It requires an international convention, no less. Until then, nearly all containers are transported without any check at all on a good trust, that the shipper is a responsible person and correctly declared the character of his goods. As a result, we have what we have – quite a number of dangerous goods go as safe ones, and more to that, carriers mingle safe containers with dangerous even when knowing it. All of the ocean-going boxships turned into floating bombs waiting for their chance to explode, and there is nothing anyone can do anything about it, at present.
Still, be the major carriers socially responsible bodies, they could do quite a lot to minimize the risks for the main bulk of their clients, for minor shippers. They could, first of all, make the incident statistics public, in order for general public to be able to appreciate the risks. They could yield some share of the market to small-middle sized carriers who can guarantee a safe transportation, safe at least from fires and explosions. What I mean is simple – if I ship the goods which are so precious to me that I can’t afford to lose them, insurance or not, I must have a choice how to ship them, cheap or safe. Now I don’t have one, thanks to major carriers and their lawyers. The major carriers care for major shippers and for the share of the market, not for me, an ordinary person.

As for the way you dealt with the student (and other individuals and small companies), I find it, excuse me, simply insulting:
“As for your student, surely he must have purchased insurance for his shipment! – He probably booked it with a freight forwarder who arranged the insurance for him. All he has to do is file a claim with his insurance company and they will handle the General Average”.
Mr.Lyngso, where is the world you’re lucky to inhabit, situated? A perfect world with nothing to worry about, providing a person is insured? Don’t you understand, that notwithstanding insurance, ordinary people and small companies suffer losses, whether they’ll get their goods back, or will be compensated in accordance with the insurance?
Look, there is a family who shipped all the goods they have, all their family belongings including furniture, by MSC Flaminia. Now they can’t get it back, and have to buy everything from the scratch. It doesn’t matter if they finally, receive the goods or compensation, they already suffered heavy financial losses. There are many people around, who are not well-off, Mr.Lyngso, and for those people the loss of all their goods is a catastrophe of cosmic, life-long  proportions, which will cut off all their previously planned expenses including medical or educational. They may not recover from such a loss for a long time, or for the rest of their lives. For a wealthy man the loss of all his personal belongings may be a nice break of his routine ways, a reason to indulge himself in an unscheduled shopping spree. For an ordinary man it may be a financial disaster.
There are many such people around, in fact most part of humankind is actually, poor, living on the verge of survival. The same applies to small companies – whether they’ll get the goods back, or not, whether the goods were insured or not, all of them already suffered losses, and some of them went or will go bankrupt. There was only one way to get off MSC Flaminnia accident without losses or maybe even with a profit – to know about the fire in advance, and to insure the goods respectively. Most part of the shippers did what all of us do – insured the goods at a minimal possible cost, considering the insurance more of a nuisance than of necessary precaution.

Let me share with you, Mr.Lyngso, my personal experience of being robbed by a big corporation. I took a credit card in a Citi Group bank Moscow Branch. I left Moscow three years ago, card expired two years ago (with no debt on my side, I’ve been covering all the credits in time and in full), but the bank is fastidiously charging me each month with accumulating bill for the services which go on with the card. There is only one way to get rid of the damn thing, to visit Moscow Branch in person. Or else I will be haunted till my death and who knows, maybe the curse will be inherited by my children. When I was signing for a card, I was presented with a booklet, you know, usual stuff – happy imbecile looking family, happy children, happy dog and happy house cockroaches, explaining to me how lucky I’m to become a Citi Group client. As in the case with liner Bills of Lading, most important details were printed on the last page in a font requiring a microscope.
All of it – whether issuing a client a credit card, or Bill of Lading, the way it is now, is a gross violation of my consumer rights. I should be handed with a booklet where on the main page, in CAPITAL LETTERS, will be listed all the clauses which make me wrong, and the Bank or the Carrier right, explaining why I’m to be blamed for everything, and explaining to me, clear and loud, the negative consequences, which may result from my agreement to become a client of this or that corporation.
You’d say of course, that I have nobody to blame except myself, I must check everything. You’ll be right again, but again, your rightness is imaginary, is an illusion, is a scratch on the surface. I’m an ordinary person not accustomed in my everyday life to the intricacies of the laws and trickeries of corporate services. I can defend myself from street violence or a swindler, I’m prepared for such encounters by my own and other people experience, it’s just the way we live. But I am not prepared to find swindlers and muggers either in Bank, or in Carrier’s office. I didn’t know from my former experiences, that I have to treat them with much more caution than I treat card sharks or street muggers. If street muggers rob me, they’ll rob me once. Corporations may rob me for the rest of my life just for one contract I was foolish enough to sign.

You’re saying that such is the law, but the laws we create are not the laws of the nature – it’s simply the question of who is creating laws and for what purpose, either the laws are aimed to the benefit of the society, or they’re aimed to the benefit of those who profit on the ignorant public. Mine, and myriads of other people of my kin, common sense tells me, that the major bloody players, be them banks or carriers, or whatever else, are cheating us flat and what’s more fearsome, the more we go on, the less choice we have. And the less are the chances to defend ourselves too, or even avoid the damn services they’re inflicting upon us. For example, there is almost no way in Internet to pay for the goods or services by a debit card – why? Because debit cards are not as profitable for the banks as credit ones. There is almost no way one may ship his goods by a small, personally committed, carrier – they are being wiped out by the majors. And the same may be said for many other aspects of our sorry lives.

When I labeled the General Average with General Robbery, I wasn’t trying to dispute the legitimacy of the General Average as it stands now, I was trying to understand why it seems to be so unjust, why so many clients of the MSC yell a bloody murder, why do they feel themselves cheated and humiliated. You chose an approach familiar to all the corporate lawyers – you went in for what’s on the surface – there’s such or that law, so there’s nothing to talk about. The public, the society, has its rights, you know. One of them is the right to analyze and appreciate this or that occurrence, finding it right or wrong, and if it’s wrong, trying to change rules which let it happen. The corporations make the laws, we commons try to change them, when we find them unbearable.

Best regards,
Mikhail Voytenko
Nov 10 2012

Full story with chronology, photos and maps at http://www.odin.tc/2012/mscflaminiaen.asp




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