The Costa Concordia Disaster: Court Considerations One Year Later

Introduction

On January 13 2012 the Costa Concordia capsized while carrying around 3,200 passengers and 1,000 crew members; 32 people were killed in the accident. The disaster is one of the worst in the cruise industry's recent history, and will likely be the largest marine insurance loss on record.

Costa Cruises, which operated the Concordia, initially offered survivors a 30% discount off future cruises, but the proposal was dismissed as "insulting", so Costa subsequently offered 11,000 (around $14,250) in compensation to uninjured passengers for items lost and any psychological damages, plus a further €3,000 for reimbursement of costs incurred after the event.

Settlement

An agreement was reached with virtually all of the Italian consumers' associations and defence organisations, with the exception of Codacons, which has launched class action claims on behalf of passengers and victims against the parent company Carnival, requesting £105,000 for each passenger. Similar agreements have been reached in other jurisdictions, such as the United Kingdom and France, where the settlement has been more complex and time consuming than Costa expected.

Costa had set a deadline of February 14 2012 (only a month after the event) for the acceptance of the offer, but FENVAC (the French national federation of the victims of catastrophes), which represented a large number of passengers, contended that this deadline was too close and unreasonable. FENVAC sought an order from the Court of Nanterre to extend the deadline for the acceptance of the offer; the application was upheld and the order was confirmed by the Court of Appeal of Versailles following Costa's appeal.

To date, about 65% of the passengers have accepted the settlement offer, but a large number of claims are still pending (as was predicted).

Pending claims

Three crew members recently filed a lawsuit seeking a declaration of nullity for the settlement agreement, alleging that they signed it while in a vulnerable and psychologically impaired state and under financial constraints. They have also alleged that Costa implied that the crew members' acceptance of the settlement was a condition for their continued employment.

Furthermore, a family recently obtained an indemnity twice the amount of the quantum offered in the aftermath of the event (the sums acknowledged by Costa are22,000 for each passenger). It is possible that this will prompt new claims and, in some instances, attempts to invalidate the...