Autonomous Vessels: Legal, Regulatory, and Insurance Issues

1. Autonomous Vessels: Legal, Regulatory, and Insurance Issues MARITIME 2 May 2018 Alan M. Weigel BLANKROME Phone: (212)885-5350 e-mail: aweigel@blankrome.com Maritime Law Association Torts and Casualties Committee Meeting

2. The Legal Landscape May 2018 • Courts have not considered issues involving unmanned/autonomous surface or subsurface vehicles. • Recent (past five years) references to unmanned aircraft in U.S. cases: 43. • Recent (past five years) references to unmanned surface/subsurface vehicles in U.S. cases: 0. • Implications: • No clear guidance from the courts. • Existing cases provide imperfect analogies.

3. Autonomous Vessels: Nomenclature • UNMANNED MARITIME SYSTEMS: • Unmanned Surface Vessels (USV) • Unmanned Underwater/Undersea Vehicles (UUV) • Maritime Autonomous Surface Ships (MASS) • Autonomous Surface Vehicles (ASV) • Unmanned Maritime Vehicles (UMV) • Remotely Operated Vehicles (ROV) • “Drones” or “Smart Ships” • AUTONOMOUS ≠ UN-MANNED • But what is a “vessel” or “ship”?

4. Levels of Autonomy

5. What Are Autonomous Vessels?

6. What is a vessel? • No universally accepted definition • “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.” 1 U.S.C. §3. • Broadly defined. • Designed or used to encounter “perils of navigation.” • Manner of propulsion not relevant (whether by oars, sails, steam, towed by other vessel, tides, currents). • Transportation means “to convey or carry from one place to another.” Includes “passengers, cargo, or equipment.” • Every description of watercraft, including non-displacement craft and seaplanes,used or capable of being used as a means of transportation on water.” COLREGS Rule 3 • 1982 U.N. Convention on the Law of the Sea (LOSC): Vessel or ship not defined • But, never construed as meaning “simply every floating object capable of bearing weight without sinking.”

7. Some Examples From The Case Law • What is a “vessel”: • Unmanned, unpowered barge without sails, mast, or rudder • Drilling platform; floating dredges • Pumpboatused for pumping water from coal barges and capable of being shoved with poles or drawn by ropes, or towed • Scows without steam-power, sails, or rudders, and which were moved by being towed. • 18-foot motorboat with 225 hp inboard engine operated as pleasure craft • Sea-Doo personal watercraft • Raft of logs • What is not a “vessel”: • Seaplane • Floating dock; floating drydock • Floating oil and gas production facility, moored miles offshore on Outer Continental Shelf, not practically capable of transportation on water • Permanently moored riverboat casino receiving power, computer, communication, water and sewer services from shore and not practically capable of being transported over water • Houseboat not designed to any practical degree for transportation over water, with no steering mechanism, movably only under tow, and with no power except through land line • Pipeline and supporting pontoons attached to dredge pumping spoil from channel • Submersible capsule which is major component of underwater system designed to service wellheads located on seabed

8. Implications of “Vessel” Classification • COLREGS • USCG considers that Rule 5 lookout obligations apply to all vessels including “unmanned crafts.” Electronic means (e.g., radar) understood to be secondary to a look-out maintained by “watching and listening” or “sight and hearing.” • 46 CFR Subchapter “M” • Applies safety regulations governing the inspection, standards, and safety management systems of all towing “vessels.” • Minimum manning. • Jones Act • Rendering assistance obligation • Prevention Pollution from Ships (MARPOL) • Safety of Life at Sea (SOLAS) • Standards Training, Certification & Watchkeeping Seafarers (STCW) • Compulsory Pilotage • General Average. • Who is the Master to take the decision?

9. Current Projects • Svitzer Hermod • Rolls Royce/Svitzer demonstration project • 28m long tug conducted remotely controlled maneuvers in Copenhagen harbor in November 2017 • Controlled from remote operating center • Yara Birkeland • 80m autonomous container ship • Due to be launched in 2019 • Expected to operate autonomously by 2020 between three ports in southern Norway

10. Current Projects • Sea Machines Robotics - A.P. Moller-Maersk • Winter Palace ice-class containerships to trial perception and situational awareness technology • Installation of Light Detection and Ranging (LiDAR) and perception software to augment and upgrade transit operations.

11. Industry Initiatives • USCG Navigation Safety Advisory Counsel (NAVSAC) • UK Maritime Automomous Systems Regulation Working Group (MASRWG) • EU Safety and Regulations for European Unmanned Maritime Systems (SARUMS) • CMI Interim Working Group on Unmanned Ships • Association for Unmanned Vehicle Systems International (AUVSI) COLREGS Working Group and UMS Advocacy Committee

12. Industry Initiatives • USCG: Unmanned Maritime Systems Best Practices • Safety and protection of the marine environment • Professionalism, standards, maintenance procedures • NAVSAC: Unmanned Maritime Systems Best Practices • UK Maritime & Coast Guard Agency: Autonomous Surface Ship Code of Practice • Lloyd’s Register: Code for Unmanned Marine Systems • CMI Working Group on Unmanned Ships: Regulatory Scoping Exercise For The Use Of Maritime Autonomous Surface Ships (Mass) submitted to IMO • Questionnaires to national maritime law associations • Analyze IMO conventions posing challenges to unmanned ships

13. Autonomous Vessels: Legal Liability • Compliance With Best Practices May Not Absolve Owner Of Liability • Governmental regulations do not necessarily measure the scope of an owner’s duty. Liability may be imposed for negligence even when no violation of regulations. Schlichter v. Port Arthur Towing Co., 288 F.2d 801 (5th Cir. 1961). • Regulations are a “minimum requirement.” (i.e., noncompliance usually leads to imposition of liability almost as a matter of course. Prudent navigation practice or “the exacting standards of seaworthiness” may require an owner to supply more than the bare minimum called for by regulations. Id. • Custom Also May Not Insulate An Owner From Liability • The standard of care is not limited to complying with customary practices. Troupe v. Chicago, Duluth & Georgian Bay Transit Co., 234 F.2d 253 (2d Cir. 1956). • Custom does not justify negligence. Tug Ocean Prince, Inc. v. United States, 584 F.2d 1151(2d Cir. 1978) ("Methods employed in any trade, business or profession, however long continued, cannot avail to establish as safe in law that which is dangerous in fact."). • “There are precautions so imperative that even their universal disregard will not excuse their omission.” The T.J. HOOPER, 60 F.2d 737 (2d Cir. 1932). • Court can reject a custom if wanting in due care. Stevens v. Seacoast Co., 414 F.2d 1032 (5th Cir. 1969). • Courts Must In The End Say What Is Required • An admiralty court may call upon an owner to supply more than the bare minimum required by statutory or regulatory law. Walker v. Harris, 335 F.2d 185 (5th Cir. 1964) (Crewman died after abandoning sinking tug because life raft lacked certain equipment even though it complied with all regulations).

14. Defenses to Liability • Classification Society certification (ABS or LR Rules) • Shipowner’s Limitation of Liability Act/1976 Limitation Convention • Not drafted with autonomous vessels in mind. • What is an unseaworthy autonomous vessel? • Sensors, software, shore installations. • Training, certification, manning by shore personnel • Accident must be outside owners “privity or knowledge.” • Negligence not that of a corporate officer, manager or superintendent. • Personnel at shore-based vessel operations centre? • Owner must demonstrate: • No prior knowledge of unseaworthiness which caused the loss. • The exercise of reasonable diligence (“must avail himself of whatever means of knowledge are reasonably necessary to prevent conditions likely to cause losses”). • Knowledge of software operating systems or sensor design?

15. Autonomous Vessels: Strict Liability/Products Liability • Is an autonomous vessel a “dangerous instrumentality”? • Shipowner or operator is strictly liable • A manufacturer can be held liable for manufacturing or selling a product that was “unreasonably dangerous” or in a “defective condition.” Restatement of Torts, §402A. East River Steamship v. Transamerica Delaval, 476 U.S. 858 (1986) (products liability is part of the general maritime law) • “Unreasonably dangerous” or “defective condition”: • Negligent or defective design. • Risks inherent in the product outweigh its potential utility. • Negligent failure to warn of known defects. • For developers and builders: • Sufficient warning to alert user to possible defects. • Government contractor’s defense • Licensing agreement indemnity provisions and/or liability limitations • Express warranties

16. Autonomous Vessels and Insurance • Brokerage and Underwriting • Disclosures/Representations : Is disclosing proprietary software required? • What material facts must be disclosed to satisfy “utmost good faith” (US) or “fair presentation (UK)? • Coverage • What perils will be covered under Institute Time Clauses (Hull) (ITCH) or American Institute of Marine Underwriters (AIMU) Clauses? • Will ITCH and AIMU have to be adapted? • Adjusting • Streamlined by abundance of data • Automatic adjusting? • Advantages of decreased claims for unmanned ships. • 33% of claims are caused by personnel error • 40% of claims are personnel injuries • Elimination of maintenance and cure?

17. Autonomous Vessels and Insurance • “NEGLIGENCE OF MASTER, OFFICERS AND CREW” • Covered peril under British and American marine insurance hull clauses • Provided that such negligence has not resulted from a lack of due diligence by the assured, owners or managers. • What is the status of the programmer who designed the computer system that runs the autonomous ship? • Where does liability fall? • Can ship owners claim coverage for loss or damage to the vessel caused by the negligence of programmers?’

18. QUESTIONS? Alan M. Weigel Blank Rome LLP (212)885-5350 aweigel@blankrome.com