Several years ago, U.S. based cruise lines began insisting that injured crew members seeking compensation for their injuries must pursue their claims through arbitration in foreign countries.
Companies like Carnival, NCL and Royal Caribbean started moving to dismiss lawsuits filed here in Miami, arguing that seriously injured crew members are not entitled to jury trials in the U.S. but must file arbitration claims in either their home countries or where the cruise ships are flagged.
The cruise industry's lawyers understood perfectly well that many of these foreign countries, like the Philippines, Bermuda or Panama, had virtually no laws that provided compensation to their employees or the existing compensation scheme was a pittance.
In 2003, the NCL Norway blew up at the port of Miami (photo right). Eight Filipinos were scalded to death. Many other crew members were seriously burned in the explosion.
NCL responded to lawsuits filed by the dead men's surviving wives and children by moving to dismiss the cases and arguing that the grieving family members could not file suit here in Miami, where the explosion took place and NCL was headquartered. Instead, the only claims permitted were in a non-jury arbitration process in Manila where the damages for wrongful death were limited to around $50,000.
NCL won its motions and paid very small amounts to the families, even though the 45-year-old Norway cruise ship was in deplorable condition. You can read our analysis here.
Since then, most of the cruise lines have drafted onerous terms and conditions in the crew member's employment contracts which prohibit lawsuits to be filed in the U.S. and limit recovery to the smallest imaginable amounts for serious injuries even in cases where the cruise line is grossly negligent.
A recent case illustrated just how unfair the arbitration process is.
Filipino crew member Lito Asignacion worked as a senior engine fitter on board the vessel M/V Rickmers Dalian (flagged in the Marshall Islands) for Global Management Limited.
In October 2010, while the ship was in the port of New Orleans alongside of 7th Street Wharf, crew member Asignacion sustained serious burns of his abdomen and legs when scalding water overflowed a tank. The crew member underwent extensive and painful medical treatment in the burn units of West Jefferson Medical Center and Baton Rouge General Medical Center in Louisiana, U.S.A.
Asignacion was treated and underwent skin grafting burns of 35% of his body.
He thereafter was returned to the Philippines where he continued undergoing medical treatment at a number of hospitals and with a number of doctors who performed plastic surgery. He is now unemployed, disabled and scarred for life.
Asignacion filed suit in state court in Jefferson Parish where the accident occurred, but his case was dismissed and he was ordered to proceed with arbitration in the Philippines.
The shipping company argued that the case was controlled totally by Philippine law and Asignacion had no rights whatsoever under U.S. law. The company argued that under the Philippines Overseas Employment agreement (POEA), the crew member suffered a grade 14 disability which would entitle him to only 3.74% of USD $50,000 or a total award of $1,870.00 (US).
The Filipino Labor Board agreed and awarded Asignacion just $1,870.
The labor board made a point of stating that the shipping had offered the burned crew member $25,000 “out of compassion and generosity," implying that he had foolishly rejected the "generous" offer. The opinion reads and sounds vindictive.
The labor board also cited language from a prior decision that compensation for serious injured Filipino seafarers is low because the labor board sad that the seafarers are perceived as crew members "who complain too much.”
The award is a disgrace. The process is the result of a kangaroo court.
This is how shipping companies and cruise lines doing business in the U.S. treat their crew members from the Philippines and other countries outside of the U.S.
The case name is Lito M. Asignacion, Complainant, vs Rickmers Marine Agency Philippine, Inc.,Global Management Limited, and Navis Maritime Services, Ind., Respondents. AC-305-NCMB-NCR-100-07-11-12. If you would like a copy of the decision, please contact me: firstname.lastname@example.org.
Republic of the Philippines, Department of Labor and Employment, National Conciliation and Mediation Board, National Capital Region, Intramuros Manila. The award was by:
Jesus S. Silo - Chairman.
Leonardo B. Saulog - Member.
Gregorio C. Blares, Jr. - Member.
Photo Credit: Rickmers Dalian