Maritime law heats up as COVID-19 boosts shipping demand in South Florida

Since the COVID-19 pandemic made “social distancing” a common phrase, boating has become a go-to activity for South Floridians who want to get outdoors without mingling with others.

Enter James N. Hurley, shareholder and chairman of Fowler White’s maritime law practice group, who said he’s seen liability claims rise alongside an influx of more inexperienced boaters to South Florida waters. Meanwhile, US Coast Guard activity is skyrocketing, the cruise industry is battered, and insurance is becoming increasingly difficult to obtain.

With hurricane season underway, here’s what Hurley says is on the radar for the maritime law industry. Replies have been edited for news content and style.

How has the COVID-19 pandemic impacted the yachting industry and maritime practice?

James N. Hurley, shareholder and chairman of Fowler White’s Maritime Law Group. Courtesy picture.

Despite the CDC’s ‘no sail’ order and nationwide ‘shelter in place’ restrictions during the pandemic, Fowler White’s maritime practice not only thrived, but actually expanded with the addition of four new maritime lawyers. It quickly became apparent that boating offered one of the few outlets where families could be outdoors and practice safe social distancing. Powerboat sales in Miami-Dade and Broward counties increased 21% in 2020 compared to 2019. And the increase in demand, coupled with lower inventory due to plant closures, has greatly increased prices and created an immediate shortage of ships and parts.

Fowler White’s versatility across the broad maritime spectrum has resulted in an increase in yacht and small vessel closures in previous years as we navigate our clients through the complex web of ownership and use restrictions. ships.

What other maritime issues do you foresee due to increased boat sales?

The increased desire for boating has also increased the legal needs of the boating industry. There are more inexperienced boaters on the water, and Florida has no licensing requirements for adult boaters. As a direct result, there has been an increase in liability incidents, both at marine facilities and on the water.

In addition to increased boating industry sales, U.S. Coast Guard law enforcement activity has increased dramatically. From October 1, 2019 to September 30, 2021 – the Coast Guard’s fiscal year – search and rescue increased by 92%. Another 50% increase for this year is expected, and the Coast Guard has made it a point to target unlicensed charters. The current trend shows a 100% increase in Coast Guard intercession for unlicensed charters with potential fines in excess of $94,000 per day. Fowler White’s marine practice has been active in handling mitigation procedures with the U.S. Coast Guard.

My client buys a boat. What should I pay attention to?

Whatever the seller says, buying a boat is not the same as buying a car. Vessel ownership and use is subject to a myriad of federal and state restrictions and an experienced marine attorney is paramount to properly protecting a client from the risks of vessel ownership.

Advising a client well begins with the form of ownership. Liability considerations are significantly more important with a boat. Not only is there a risk of personal and property damage, but there is also environmental exposure. We almost always advise clients not to purchase vessels in their own name, but rather to use a domestic or foreign business entity, as appropriate, to minimize the potential exposure of their personal assets in the event of liability.

The place of registration is also important. Vessels over a certain size must be documented in the United States or overseas. All vessels in Florida must also have state registration. A foreign person or entity cannot own a vessel documented in the United States. A vessel not documented in the United States cannot engage in cabotage, that is, carrying passengers between US ports. A foreign-flagged vessel may travel between US ports for private pleasure purposes, but will need a cruising permit.

A cruising permit can also protect an owner from having to pay customs duties or Florida sales or use taxes, but it also has requirements for periodic trips outside the United States to a port. abroad and is subject to annual, and sometimes shorter, renewal. Similarly, a vessel documented in the United States must be properly documented to conduct inshore fishing activities. They are also subject to US crewing regulations.

Infographic by Chelsey Fredlund/ALM.
Infographic by Chelsey Fredlund/ALM.

What about insurance?

Recreational boating also has a special insurance consideration. Many companies, especially European insurers, no longer offer boating insurance in the United States due to liability risk. Insurance is becoming increasingly difficult to find and special insurance clauses are required if you are using a paid captain or crew.

Hurricane season has begun. What should boat owners know?

Clients have special needs for legal advice during hurricane season. It is almost universal that insurance policies impose specific obligations on boat owners to take proactive protective measures from June to November. Hurricane Dorian was a major source of activity. Many US-owned and insured boats were unexpectedly caught in the Bahamas by storm. Most boats were insured under policies that included requirements for pre-approved hurricane plans. Failure to adhere to these plans could be grounds for denial of an insurance claim. Such plans normally specify a safe berth during a storm, and some even require that the ship not be as far south as Florida during hurricane season. Browsing limits are common in such policies, and careful consideration should be given to ensure that the intended use does not violate the specified limits.

Boat owners are responsible for taking reasonable steps to ensure their boats are properly prepared for a hurricane. Florida courts have said hurricanes are not “unexpected” and therefore not necessarily a natural disaster. A standard of negligence applies if a boat becomes detached and damages other property. Whether or not a ship can be contractually liable for damage it causes to a marina during a hurricane remains unanswered.

Since Hurricane Andrew, Florida Statute Section 327.59 prevented marinas from adopting, maintaining or enforcing a policy that requires a vessel to be moved from a marina after the issuance of a hurricane watch or warning, on the grounds that the personal safety is more important than the preservation of property. The law was amended in 2021 to provide an exception to the ban for designated deep-sea seaports.

With the “No Sail” decree in force, what work comes from the cruise industry?

While the cruise and cruise support industries have suffered terribly during the pandemic, the need for cruise-related legal services has remained constant. Cruise litigation is now in the same “catch up” phase, and recreational boating litigation discussed above and capacity has increased. Additionally, new opportunities, particularly to assist cruise passengers with return-to-service procedures, including review of special ticket arrangements and informational documentation relating to onboard precautions and shore excursions, have provided a new source of business opportunities.

What about cruises?

The status of cruise travel changes daily, although it is almost certain that the start of cruises in the United States is imminent. Many cruise lines have imposed vaccination requirements for passengers and crew to meet the CDC’s 95-98% threshold for conditional clearance to sail. These requirements are expected to remain in place for cruises originating from much of the world, except Florida, pending the final outcome of the DeSantis/CDC litigation.

The temporary shutdown of cruising has resulted in the loss of billions of dollars in revenue for the cruise lines themselves, their onboard and shore employees, countless other shore support workers such as stevedores and suppliers. ships, and many tour operators. The restart of cruising in the United States, which should begin this month, is highly anticipated.

How could COVID-19 shape the cruise industry?

Regardless of the final outcome of the DeSantis/CDC litigation, in order to properly address concerns regarding COVID, there will be necessary changes to the cruise experience.

First, passenger ticket and passenger policies will likely include provisions outlining the rights and obligations of cruise lines and passengers in the event of possible infection or exposure. These rights will include the ability to require on-board quarantine or forced disembarkation, restrictions on shore activities from unlicensed suppliers and spot health checks to protect the health of fellow passengers and crew. ‘crew. Masks may still be required indoors at certain locations and there may be restrictions on gathering size for certain onboard activities, which are subject to change.

One of the difficulties that cruise lines will face will be the need to comply with the laws of multiple jurisdictions when visiting these ports. As such, route flexibility will be a must. If recent air travel statistics are any indication, the number of people on cruises is expected to be significant.