What are your rights on private cruise ships?

by on November 19, 2010 at 2:37 pm in Economics, Law | Permalink

Have you wondered?  Here is one take:

The unpleasant reality is that the cruise vessel's responsibilities and your rights as an injured passenger are governed not by modern, consumer oriented common and statutory law, but by 19th century legal principals, the purpose of which is to insulate the maritime industry from the legitimate claims of passengers. The policy enunciated by the Second Circuit Court of Appeals 35 years ago in Schwartz v. S.S. Nassau67, a case involving a passenger's physical injuries, applies equally today, " The purpose of [ 46 U.S.C. 183c ]…' was to encourage shipbuilding and ( its provisions )…should be liberally construed in the shipowner's favor `". Although recent years have seen the expansion of travel consumers' rights and remedies in actions against airlines68, domestic hotels69, international hotels70, tour operators71, travel agents72, informal travel promoters73 and depository banks74, there has been little, if any, change in the passengers' rights and remedies in actions against cruise lines."75 Cruise passengers are at a distinct disadvantage in prosecuting their claims.

Being a good Coasean, I do not object to these arrangements (though I prefer to avoid them), but they are worth keeping in mind as the debate over the TSA proceeds.  Note that private contracting, between passengers and the cruise ships, has not done so much to extend these rights.  Here are further readings.  Or try this book.

1 dirk November 19, 2010 at 10:49 am

I can easily avoid going on cruise ships, and do. Avoiding traveling by plane would require me to alter my life significantly, including changing my career.

2 Ryan Vann November 19, 2010 at 11:24 am

These pricipals predate the 19th century by a few hundred years.

3 Mike November 19, 2010 at 12:08 pm

When is the last time you had your nuts squeezed before entering a cruise shit? A cruise ship tries making your life pleasurable, and customer service is usually quite good.

Does anyone think TSA people view resolving customer complaints as a priority?

Like many of Tyler's posts, a page of experience is worth more than an entire blog's worth of "logic."

4 Jamie November 19, 2010 at 12:21 pm

Mike-

First, why so snarky?

Second, might I suggest revisiting your sense of certainty after becoming sick on a cruise. Happened to a family member, there was a difference of opinion over legal rights and obligations, and the way the case came out was very friendly to the cruise line, when it never would have happened that way on a plane.

5 vasantha November 19, 2010 at 12:44 pm

Isn't going on a cruise more like going to Disneyland/Vegas casino than flying commercial? How do the rights of a cruise ship passenger compare with a those of an amusement park visitor?

6 Bill November 19, 2010 at 1:01 pm

Airlines and the Warsaw Convention, anyone?

What is consistent here is that shipping and airlines are network systems spanning different jurisdictions, or no jurisdictions when a ship is on the high seas or a plane is over the ocean.

Ask this question: What happens when customers are weak, dumb, and scattered, and only purchase occaisionally from different jurisdictions. Who is the party with the greatest incentive to write for or lobby for a governmental rule: the one time customer or the shipowner or airline company? And, what happens when you can "choose" the choice of law to govern the ocean going transaction–do you think that the ocean liner might be able to chose the law of some small island where it is the largest employer, and pick its courts or its laws to resolve disputes.

If you wanted, you could enact a law that would prohibit the sales of tickets to your citizens which did not have minimal standards, and push the cruise lines to change their practices. Or, you could chose the Libertarian contractual solution, described above.

7 Ryan Vann November 19, 2010 at 2:00 pm

"What does this sentence mean? "

I think he is implying that customers wave certain rights in return for considerations that have value to them.

Basically though, all these issues have to do with liability and I don't see any correlation to the TSA issue.

8 To November 19, 2010 at 2:49 pm

Mike, You might want to change the last word of your first sentence.

Indeed.

I think he is implying that customers wave certain rights in return for considerations that have value to them.

I don't think waving the Bill of Rights in front of a TSA agent will do any good.

Sorry.

9 MWC November 19, 2010 at 3:15 pm

transaction costs…

10 Freshwater November 19, 2010 at 6:15 pm

Coase is great, but no amount of Coasian thinking is going to convince me that it's ever ok under any circumstances for a government official to see me naked or grab my junk with no real justification.

I bet tickets would cheaper and lines would be shorter if airlines held a "death raffle" where they would randomly execute 1/10th of the passengers before takeoff. But you know, I have concerns other than bleep blorp economic efficiency.

11 andy November 19, 2010 at 11:34 pm

Loks like an argument 'unrestricted market might enact the same rules as did TSA, so that the TSA rules are OK'. Seems like 'you might have volunteered for the army, therefore obligatory conscription is consistent with free will'.

12 Andrew November 20, 2010 at 2:09 am

Why is it okay to collude on rights but not on price?

You are right, dirk. This topic seems like a crazy outlier. If airlines could do what they thought best, and every customer but me was for the nonsense, I'd still be calling it nonsense, but I wouldn't be calling it injustice.

13 Bill November 20, 2010 at 6:11 am

Andrew,

You ask a very good question: "Why is it okay to collude on rights but not on price?"

You can't collude on rights. The carriers could not get together and agree on terms to be offered to their customers, nor can they agree on price.

But–and it is a big but (not big butt)–carriers can jointly petition the government to enact legislation which has the effect of restricting competition–in this case, for example, having the government set minimum rights or terms of trade, etc. The petitioning right, called the Noerr-Pennington doctrine, immunizes the petitioning of the government to impose a restraint, on first ammendment grounds. And, the result of the successful petition, the state imposing the restraint, is protected under the state action doctrine. You see, the premise is that the state imposed the restraint, not the carriers. And, that's true.

Can customers petition the government and have them impose a restraint on the carriers–setting out what minimum terms on cruise ships should be–You betcha. And that is protected as well. It's just that consumers are usually weak, dumb and scattered, and the business community is not.

14 Bill November 20, 2010 at 10:51 am

Andrew, Re: "Unless they do it through their government lobbyists you mean, right?"

Your observation has one perspective, but there is another.

First, I agree with you. Business is better organized than an uniformed consumer.

Second, however, where I disagree with you would be two points: (a) The market gave us a better outcome–just look at the initial post–where the outcome was the carrier disclaiming all liability, etc. and (b) That all is hopeless. On this point I would argue collective action by buyers ala seeking legislation or consumer protection remedies are far from futile. Consumers have agents aligned or engaged by them to pursue legislation, even hire lobbyists. Such groups as the Consumers Federation of America, AAA, etc. often lobby on issues such as this, and consumers pay them to do so.

So, what would you rather have. It's your choice in an inperfect world.

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