Carnival Corp (CCL) owners of the Costa Concordia told a survivor to sue them. The company, who has been heavily criticized for their crafty maneuverings by registering its ships in foreign countries in order to avoid paying U.S. taxes, appears to be unfazed with the multitude of lawsuits coming their way.
Fernando Tofanelli, a passenger who had to rescue himself approached Carnival/Concordia for help with out of pocket expenses. The company’s reply was “sue us”. Tofanelli, an Italian Argentinian student, found their response to be “utterly disgusting”.
The death toll has climbed to 11 at the time of this writing with 20 people still missing. On Wednesday, January 18th rescue crews had to stop their search operations after the wreckage shifted several inches. On Thursday January 19th the search and rescue mission has been changed to a recovery operation.
As of this writing a class action lawsuit has already been initiated against Concordia by Codacons, an Italian consumer defense organization, on behalf of 70 passengers. The lawsuit is seeking 10,000 euro or $12,773 per person for “the fear suffered, the holidays ruined and the serious risks endured,” said Carlo Rienzi of Codacons.
Concordia is today’s Titanic. It will go down in history as one of the most horrifying catastrophes at sea. The Carnival/Concordia case is so unique in its severity that the only certainty is intense litigation.
Under the terms of the Carnival/Concordia ticketing agreement all passengers, regardless of nationality, have to file their claims in Genoa, Italy.
There is speculation the case is so spectacular in nature that the standard agreement, which has saved Carnival in the past, may not do so now. American maritime lawyers predict the Costa Concordia disaster may set precedence in the U.S. and if does it will open the floodgates for lawsuits against the company.
A look at the numbers may shed some light on how much Carnival may have to shell out if everyone sued.
There were approximately 4,200 people on board comprising of 3,216 passengers and about 1,000 crew members. The number of Americans was 126 with 2 confirmed deaths and 2 still unaccounted for.
If all foreign passengers joined the class action lawsuit the number would rise from 70 to 3,090 making it a $40 million lawsuit and the largest of its kind in history.
The Concordia's crew employment contracts probably require them to use arbitration instead of lawsuits to settle any disputes. Even so, there are almost 1,000 of them with at least one confirmed death. This could mean an additional $5 million out of Carnival’s pockets.
Americans, however, are expected to challenge the Athens Convention, an international agreement, which caps cruise owner liability to $80,000 per person in the event of injury. With possibly four deaths and 122 distraught passengers the amount for the loss of life may be as high as $7.2 million with an anticipated $61 million lawsuit among the survivors.
In the past Carnival has created a public relations nightmare by offering "full-refund-plus-a-free-cruise" to passengers whose lives were put in danger. But is this tactic going to work on the survivors of the Concordia when the last thing they want to do is set foot on one of their cruise ships again?
Remember, Carnival earns literally billions each year in profits, and pays less than one percent in U.S. taxes by registering their vessels in Liberia and Panama. The world has been watching and everyone is alarmed. This has affected the cruise industry as a whole as can be seen with the drop in stock prices.
So the question is will Carnival try to hold on to their dollars at the expense of their image? Analysts predict this time Carnival will pay.
Copyright 2012 Kirby Sommers
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Order your copy of 'Carnival Cruise: The Definitive History of the Company and the men behind the doomed Costa Concordia,' by Kirby Sommers
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