Photo of Raymond T. Waid

Last week I had the pleasure of co-hosting the ACI Admiralty and Maritime Claims and Litigation conference with my friend and colleague Chris Nolan from Holland & Knight. Here are a few highlights from the conference:

  • Gard’s Frank Gonynor provided a great overview of the history and continued relevance of the Shipowner’s Limitation of Liability Act. Limitation proceedings are near and dear to my heart, and anyone who knows me knows that I think limitation actions should be filed as soon after a serious casualty as possible.
  • Maritime lawyers should be more familiar with the Office of Foreign Asset Control (OFAC).  Edward Carlson from Skuld provided a very good overview of OFAC sanctions that impact the shipping industry, particularly Iran and Cuba. During the discussion it was clear that in-house counsel are way ahead of private practice lawyers on this topic. Awareness of OFAC rules is essential, in order to spot potential issues before they become problems for our clients. Ed also pointed out that there is a significant amount of uncertainty surrounding sanctions under the new administration. Proving Ed’s point, I noticed a number of articles discussing the impact of Trump’s refugee executive order on shipping companies right after our conference, including this one. And the President has now signed an executive order placing sanctions on certain Iranian companies.  Stand by for further developments on this front.
  • The sharing economy of Uber and Airbnb is quickly coming to the recreational boating market. There are a host of legal issues that come with these types of transactions, including the terms of the contract between the owner and charterer, the contract with the electronic broker, prohibitions on commercial use in berth agreements, and the same type of coverage exclusions in insurance policies. The ACI panel did a great job of walking the audience through an exercise in issue-spotting and identifying ways to protect the recreational boat owner.
  • Wook Chung, former general counsel of Hanjin Shipping America LLC (now at Montgomery McCracken in New York), and Ilana Volkov of Cole Shotz PC gave a great overview of the behind the scenes activity in the Hanjin bankruptcy proceeding. It’s clear that there is still not an ideal model for dealing with the insolvency of a major ocean carrier in a way that avoids disrupting logistics operations all over the world. However, the case provides some good lessons. Service providers were semi-successful in establishing themselves as necessary and critical vendors to the debtor in possession, ensuring some of the payment of pre-petition debt as well as payment for post-petition work. The carrier was semi-successful in obtaining freight payments up front and barring cargo interests from asserting their claim to offset. While cargo delivery was significantly disrupted, pragmatic decisions by the bankruptcy judge helped to facilitate the delivery of cargo sailing on Hanjin vessels. With continued instability in the container market, the Hanjin case contains valuable lessons for carriers, cargo interests, and service providers that are best learned before the next bankruptcy.
  • Who would have thought that legal fees would be such a hot topic?! During the in-house counsel presentation, counsel at major maritime companies discussed expectations for outside counsel and offered insight into how to provide value to the client. One of the issues discussed was a need for increased flexibility in fee arrangements and better budgeting by outside counsel. The topic resulted in a healthy amount of back and forth between the speakers and the audience, including a great historical perspective from some of the more notable lawyers in the audience, including Lizabeth Burrell, a former president of the Maritime Law Association of the United States. Candid conversations like this were a refreshing part of the ACI conference. The topic was also timely. As I arrived back in my office I read yet another article about the dramatically changing marketplace for legal services, here. The bottom line is that competition in the legal market is increasing, while demand for traditional legal services is decreasing. More than ever before, lawyers need to be creative and flexible in order to meet client needs.  Semper Gumby.

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