United States: Q4 Admiralty Newsletter – The Lookout

The Lookout provides readers with a snapshot of some important developments in maritime law and the maritime industry that are being monitored by the Admiralty, Maritime & Energy Litigation Practice at Lewis Brisbois.

Maersk and Partners to Deploy Blockchain-Based Marine Insurance Platform in January 2018

In September 2017, Maersk along with Ernst & Young, Mircosoft, and data security firm Guardtime announced that they have joined together to build a blockchain-based marine insurance platform. Blockchain technology can be used as a distributed ledger, meaning that multiple parties can share and update the contents in real-time. It allows for the parties to automatically settle transactions using computer algorithms, making third-party verifications unnecessary. Besides cryptocurrencies such as bitcoin, blockchain has not been used much. Guardtime's CEO called the new platform the first real enterprise use case for blockchain.

The new platform is scheduled to be deployed in January 2018. If the deployment is successful, it has the potential to materially change the marine insurance by cutting down on time, costs, and paperwork.

Jones Act Waiver and the Future of the Jones Act

When Hurricane Maria hit Puerto Rico in September, debate over the Jones Act quickly followed. Among other things, the Jones Act prohibits foreign vessels from carrying goods between two U.S. ports. Some contended that the waiver of the Jones Act was unnecessary because there were plenty of vessels that complied with the Jones Act that were available to carry goods to Puerto Rico. Others believed that the waiver was necessary to prevent a shortage of vessels able to carry goods to Puerto Rico. Still others, such as Arizona Senator John McCain, contend that there should be a permanent repeal of the law because it has driven up costs and crippled Puerto Rico's economy. Ultimately President Trump issued a waiver of the Jones Act, but it expired on October 7, 2017, and it was not extended because the Department of Homeland Security stated that there was ample supply of Jones Act qualified vessels for Puerto Rico.

It remains to be seen how the 2017 hurricane season will impact Senator's McCain's bill to repeal the Jones Act, known as the Open America's Waters Act of 2017, along with the larger debate about the continued viability of the Jones Act.

The Impact of the Two U.S. Navy Collisions This Summer on the Maritime Community

In June 2017, the USS FITZGERALD collided with a commercial ship, killing seven sailors. In August 2017, the USS JOHN S. MCCAIN also collided with a commercial ship, killing ten sailors. Following these collisions, eight senior leaders were relieved of duty. In late October, the U.S. Navy released a report that analyzed the two collisions and issued findings as to what the Navy could have done to avoid the collisions.

The report stated that the fault of the vessels involved is an open admiralty law issue but identified deficiencies in training and preparation for navigation for both the FITZGERALD and JOHN S. MCCAIN. For the FITZGERLD, the officers possessed an unsatisfactory level of knowledge of the International Rules of the Road. The report also noted fatigue of the FITZGERALD's crew. On the JOHN S. MCCAIN, the sailors needed training on effectively transferring steering controls, the bridge watchstanders lacked basic knowledge of steering control, and some of the sailors on watch for the JOHN S. MCCAIN were not familiar with the ship. The report also noted that had the Commanding Officer for the JOHN S. MCCAIN set the Sea and Anchor Detail adequately in advance of entering the congested Singapore Strait Traffic Separation Scheme, the collision was unlikely to occur. In both collisions, the report listed a number of issues with the leadership and culture of the ships.

It remains to be seen what the Navy's finding will have on the Navy and the greater maritime community. The full report can be found here.

Lewis Brisbois Attorneys Present On Cyber-Security In The Maritime Industry At The 2017 Pacific Admiralty Seminar

On November 29, 2017, Lewis Brisbois attorneys Sean Hoar, a partner with the Data Privacy and Cyber Security Practice, and Lynn Krieger, a partner with the Admiralty, Maritime and Energy Litigation Practice, spoke at the 2017 Pacific Admiralty Seminar. Their panel was entitled Blackbeard 2.0: Solutions for Combating Today's Tech Pirates. The panel also included Capt. Shannon Gilreath, who serves as Chief of the Office of Maritime and International Law at Coast Guard Headquarters. The panel addressed practical solutions for managing cyber attacks in the maritime industry as well as developments in cyber insurance and criteria considered in the underwriting process. Lewis Brisbois associate, Matthew Johnston served as the session chair for the panel. He along with Lynn Krieger also helped organize the conference, now in its 37th year, which gathers maritime law practitioners from around the United States and abroad.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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