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January 26, 2023 Feature

Autonomous Transport Claims: Emerging Issues in the Maritime Sector

Sean T. Pribyl
Practitioners should monitor emerging regulatory developments and evolving liability precedent related to autonomy to best advise clients.

Practitioners should monitor emerging regulatory developments and evolving liability precedent related to autonomy to best advise clients.

GettyImages.com/Tryaging via iStock

It is generally accepted that the next decade will present more innovation in the maritime industry than the last century, including through decarbonization efforts, digitalization and advanced autonomy, and novel uses of the marine environment. Innovation is developing in several aspects of the marine sector, including with design and engineering as a means to reduce production time, but also as a means to mitigate risks and capitalize on vessel data to reduce operational costs and manage the complexity of a ship’s life cycle from design to operations. However, in many cases, emerging technologies and concepts have outpaced regulations and may not fit squarely in current legal frameworks, and they are requiring innovative solutions, in particular as technology further permeates the industry.

Maritime stakeholders can thus expect to face challenges in fitting innovative and novel solutions in existing legal frameworks, and should expect complex and challenging regulatory proposals to continue to emerge. For the historically conservative U.S. maritime industry, this could be particularly challenging and could lead stakeholders to review how costs and risks of complying with current regulations or new measures should be approached. The first step, though, is understanding what rapidly developing areas of innovation are impacting the industry, some of which are addressed in this article.

Advanced Autonomy in the Marine Sector

The maritime industry is experiencing an evolution of advanced technological developments in advanced automation on so-called “autonomous” vessels. Generally, unmanned (or uncrewed) ships are considered “those which are capable of controlled movement on the water in the absence of any onboard crew”; instead, control is performed in essentially two ways: by remote control or autonomously. While the topic of autonomous vessel operations is garnering greater visibility, the concept of unmanned vessels is not novel—Nikola Tesla envisaged uses for advanced autonomy on vessels in his November 8, 1898, patent for “Method of and apparatus for controlling mechanism of moving vessels or vehicles.”

Now, the emerging and increasing implementation of artificial intelligence (AI)–related or advanced technology on vessels has raised legal questions as to whether autonomous vessels conform to relevant maritime regulations and conventions since, in some cases, there is open debate as to whether those legal instruments generally contemplated the need for manned operations on board, or at least “human in the loop,” during vessel operations. Moreover, the general consensus is that the developing technology is outpacing current regulations.

While the lion’s share of autonomous vessel operations are emerging overseas, the U.S. is seeing implementation of advanced autonomy into domestic options, in many cases without removing mariners but rather by augmenting situational awareness. Given that autonomous vessels create disruption to commonly understood operational and compliance principles, their advent is spurring a significant number of legal questions that have served as the basis for international and domestic legal efforts at the government and private sector levels, including through academia and various national law associations. As with other applications involving advanced automation in transport sectors, legal, public policy, and regulatory issues have emerged that merit discussions and careful analysis. In the vessel context, the legal issues include terminology, international and domestic legal frameworks and precedent (or lack thereof), liability considerations, and insurance matters.

Nomenclature Overview

Mentions of autonomous shipping may conjure futuristic images of fully unmanned oceangoing cargo vessels. However, autonomy is developing incrementally. As a threshold consideration, when assessing the applicability of legal frameworks to respective vessels operating under advanced autonomy, analysis involves “a determination of the level of autonomy to be used, the type of vessel on which the technology will be utilized, and in what location the vessel would be operating.”

One of the primary complications with addressing the type of vessel to which advanced autonomy applies is that there is no universal description of so-called unmanned or autonomous vessels. Besides issues related to defining the watercraft, system, vehicle, or “vessel,” challenges or barriers may also exist related to definitions, roles, and responsibilities under existing regulations or statutes, such as those related to “master,” “operator,” “crew,” and “seaman.” This is all the more prevalent in circumstances involving unmanned operations or remote operations from ashore. U.S. shipping regulations and statutes do not contain universal definitions of these terms, and to the extent that the concepts have been defined, these definitions are based on the purpose of each individual regulation or statute.

Regulatory Challenges

The increasing implementation of advanced technology on vessels raises legal questions as to whether autonomous vessels conform to relevant maritime regulations and conventions. Vessels are currently implementing autonomy for various commercial and defense purposes as use cases center on perceived benefits with autonomy to improve safety and efficiency, reduce operational costs, and remove humans from repetitive tasks considered “dull, dirty, and dangerous.” Such considerations are all the more relevant since human error is attributed to between 75% and 96% of marine accidents. Importantly, autonomy must be considered in several degrees, and as a combination of degrees when operating—in other words, there is a middle ground between fully crewed traditional vessels and fully uncrewed AI-controlled vessels, generally described by the International Maritime Organization (IMO) as follows:

  • Degree one: Ship with automated processes and decision support; seafarers are on board to operate and control shipboard systems and functions; some operations may be automated and at times be unsupervised but with seafarers on board ready to take control.
  • Degree two: Remotely controlled ship with seafarers on board; the ship is controlled and operated from another location; seafarers are available on board to take control and to operate the shipboard systems and functions.
  • Degree three: Remotely controlled ship without seafarers on board; the ship is controlled and operated from another location; there are no seafarers on board.
  • Degree four: Fully autonomous ship; the operating system of the ship is able to make decisions and determine actions by itself.

Commercial use cases are being developed on several different types of vessels at varying degrees of autonomy, including oil spill response vessels, harbor tugs, coastwise cargo vessels, and ocean survey and mapping vessels, among others. The defense sector is also investing heavily toward future fleet projections in which uncrewed vessels will be used for various support activities. In fact, some suggest that by 2030 the global market for autonomous shipping could be worth around $166 billion.

However, autonomous vessels do not fit squarely within existing legal regimes, due in large part to the fact that governing legal instruments generally contemplate a human on board while operating. As such, the technology has outpaced current regulations and is challenging generally accepted principles in the practice of maritime law, including those related to regulatory compliance, design and engineering, international operations, safety and security, and training the mariner workforce.

While autonomous vessels are spurring debate as to their applicability under governing frameworks, both domestically and internationally, the threshold legal issue is the legal “status” of the watercraft. More specifically, whether a respective watercraft is a “vessel” calls into question its compliance requirements under domestic statute, regulation, and policy. This is all the more important since some commercial and defense watercraft are described as “systems” or “vehicles,” terms absent from domestic maritime laws and international conventions. Moreover, there is no universally accepted definition of “vessel.” Under U.S. statute, the word “vessel” includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water, although that definition does not distinguish between manned and unmanned watercraft.

Indeed, vessel status must be determined in order to assess whether a watercraft must comply with collision avoidance requirements described in the Convention on the International Regulations for Preventing Collisions at Sea (COLREGS) or “Rules of the Road,” which include both international and inland rules and also define “vessel” under Rule 3 to include “every description of water craft, including nondisplacement craft, WIG craft and seaplanes, used or capable of being used as a means of transportation on water.” Thus, collision avoidance remains at the forefront of the autonomous vessel discussion. More specifically, the following COLREGS rules are considered the most challenging in terms of compliance when a vessel is operating uncrewed and under advanced levels of autonomy: Rule 2 (Responsibility); Rule 5 (Look-out); Rule 6 (Safe Speed); Rule 7 (Risk of Collision); Rule 8 (Action to Avoid Collision); and Rule 19 (Conduct of Vessels in Restricted Visibility).

Liability

Beyond the COLREGS, autonomous vessels will continue to challenge existing legal norms in other areas, such as liability when an autonomous vessel is involved in an allision or collision. While no precedent exists on the precise issue, causation for accidents and incidents involving autonomous vessels could be attributed to several factors, including whether the AI navigation system was defective and that defect caused the vessel to perform in a manner other than intended; whether the operator of the autonomous vessel (wherever located) improperly engaged or disengaged the AI or decision-making autonomous system; or, whether the system decided and chose between outcomes, such as between grounding the ship or colliding with another vessel (the so-called “trolley car dilemma”).

Maritime law recognizes concepts of negligence and strict liability. Products liability is also a consideration under the general maritime law and will likely be an issue gaining prominence in the context of reduced or fully unmanned vessel operations wherein the decision-making is left to the “machine,” raising the question of whether a manufacturer or technology developer of the AI code could incur tort liability for defective software. Under current precedent, a manufacturer can be held liable for manufacturing or selling a product that was “unreasonably dangerous” or in a “defective condition. Concepts such as negligent or defective design and negligently failing to warn of known defects will potentially merit greater scrutiny, and developers will likely give consideration to ensuring sufficient warning to alert users to possible defects and drafting express warranties. To date, though, no relevant incidents with maritime autonomous surface ships (MASS) have occurred, and thus, issues of liability have yet to be fully assessed in a court of law.

Claims of negligence could be brought in cases involving collisions or allisions, loss of a vessel, damage to cargo, or discharges into the sea. A negligence claim consists of these four elements under federal maritime law: (1) the existence of a duty of care owed by the defendant; (2) breach of that duty; (3) a causal connection between the conduct resulting in the breach and the plaintiff’s injury; and (4) actual loss, injury, or damage.

U.S. courts apply the Pennsylvania rule, which stands for the view that if the defendant is involved in a marine accident and that defendant has violated a law intended to prevent that sort of accident, then the burden shifts to the defendant to show that its violation could not have caused the harm. The burden “has been described as ‘difficult, if not impossible’ to discharge.” Additionally, regulations are a minimum requirement for compliance, but liability may be imposed for negligence even when there is no violation of regulations. Since current regulations may not contemplate autonomous vessel operations, compliance with industry best practices still may not relieve a shipowner or operator of liability, in particular since regulations do not necessarily measure the scope of an owner’s duty. Importantly, prudent navigation practice or exacting standards of seaworthiness may require an owner to supply more than the bare minimum called for by regulations. In either case, a court may call upon a shipowner to supply more than the bare minimum required by statutory or regulatory law.

Insurance

Marine insurance is colloquially referred to as a vessel’s “ticket to trade.” There are three main types of insurance in the shipping sector: property, club, and war risks insurance. Shipowners have these main covers either because they acquire them out of prudence or because their financing banks or the ship’s trade requires them.

One of the main causes of marine insurance claims for any type of vessel is human error, in some cases reportedly due to impaired decision-making under stress, lack of sleep, or fatigue. Unmanned ships are purported to provide opportunities to decrease claims, but autonomous ships seeking cover may necessitate novel risk factor assessment, for example, when operations contemplate a human-in-the-loop but from remote or ashore control centers.

In support, underwriters (1) should expect to require more information about the intended operation, (2) may mandate deeper understanding of the operating system, and (3) will look to the respective operator experience and business model as this technology is emerging to assess whether there is a knowledge gap for many owners who are new entries in the market or do not have direct experience with this type of vessel. Ultimately, this has led to questions of coverage and what perils will be covered under institute time clauses (hull) (ITCH) or American Institute of Marine Underwriters (AIMU) clauses.

Conclusion

Novel uses of the marine sector are raising several complex legal questions. With automation, it is clear that the defense sector considers reduced or uncrewed operations to be viable, notwithstanding the legal hurdles under the COLREGS and other instruments that mandate compliance. Automation also faces policy obstacles with labor unions and pilot associations that must be resolved if innovation is to progress and the U.S. intends to compete on the international stage. What remains clear is that the role of legal counsel will continue to be of critical importance to the development of safe and lawful operations, in particular as litigation invariably will develop, and in cases where legislative changes are needed.

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    Sean T. Pribyl

    Holland & Knight LLP

    Sean T. Pribyl is a business attorney in Holland & Knight’s Washington, D.C., office. His practice focuses on maritime regulatory compliance matters, international law and trade, marine claims, autonomous transportation, civil litigation and dispute resolution, and white-collar criminal law.