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Costa Concordia Disaster Continues to Threaten Carnival Corp. with Lawsuits

By MarEx 2012-09-12 14:59:43

Up to 1,000 Giglio Island businesses and hundreds of passengers that were aboard the capsized Costa Concordia cruise ship back in January are pushing forward with U.S. lawsuits against Miami-based Carnival Corporation, seeking millions in damages and compensation. However, certain legal implications may force them to take their suits over to Italy.

The lawsuits filed in both federal and state courts claim that Carnival is the corporate parent of the Costa brand, which operated the vessel, and is ultimately responsible for any safety violations, negligence or recklessness that may have led to the accident that claimed over 30 lives, according to the Washington Post.

Local businesses on Giglio Island, where the luxury liner ran aground, primarily survive off of tourism. They are arguing that the disaster discouraged visitors, polluted environmentally sensitive local waters and depressed property values.

Carnival’s subsidiary, Costa Crociere, does operate out of Italy and the Concordia never sailed to a U.S. port. However, allegations note that all of Carnival’s brands report to its headquarters in Miami, Florida. Plaintiffs believe that the Concordia tragedy could have been prevented by insisting on better training of officers, safer operation and navigation of ships, and elimination of the recklessness by Carnival headquarters.

One lawsuit alone represents 155 passengers from 14 countries, including some U.S. citizens. All together, the lawsuits seek tens of millions of dollars in damages from Carnival.

Carnival’s court filings maintain that the Costa line is a separate corporate unit and that any lawsuits should be filed in Italy. Lawyers for Carnival say the company does not own the Concordia and does not manage Costa’s day-to-day activities.

Law experts have stated that Italian courts generally take significantly longer than their U.S. counterparts to deal with similar lawsuits and that there is no process of bringing a class action in Italy, as the businesses involved are demanding. According to the Washington Post, Italy also does not allow attorneys to work on a contingency fee basis in which the lawyer’s fee comes out of any settlement or verdict; damages for pain and suffering and emotional distress are harder to collect.

On the opposite hand, Carnival insists that everything to do with the Concordia disaster and subsequent investigations is more readily available in Italy, including witnesses, documents and other evidence.

None of the lawsuits are currently close to going to trial. A U.S. District Judge will soon decide whether or not to dismiss the Giglio Island businesses lawsuit based on Carnival’s claim that it belongs in Italy. The passenger lawsuits still have to deal with one major obstacle. Tickets for the Concordia cruise include a forum clause, in which the passenger agrees by making the purchase that any legal action would be filed in Italy. Based on this, lawyers aiming for Carnival in the U.S. would need to convince a judge that Carnival and Costa are identical, and that enforcement of the clause is irrational or unjust.

Lastly, Italian newspaper Gazzetta del Sud reported that the expert panel's report on the wreck that was delivered this week to the case’s investigating magistrate. It is expected that the 1,000-page report, which includes seven DVDs, will be copied for other parties involved in the next hearing in the investigation into the wreck, which is slated to begin on Oct. 15.

Captain Francesco Schettino is currently being investigated on charges of manslaughter, abandoning ship, and failing to communicate with maritime authorities. The expert panel has been looking into elements of what caused the cruise ship carrying 4,229 people to crash on the island of Giglio.

The experts responded to some 50 points raised by the investigating judge, ranging from the ship's route to nautical charts, the design of the ship, and its movements before and after the crash. The experts have also listened to recordings of conversations on bridge of the Concordia the night of the crash.