Ukraine is one of the largest seafarer suppliers to the world maritime fleet. Although there is a paucity of precise information on seafarers employed in the industry, the estimated number of Ukrainian seafarers is not less than 75,000. About 30% are engaged on the national flag vessels and Ukrainian vessels trading under a foreign flag. The others are employed on the foreign flag vessels. Anyway, Ukraine enters the top five labour supplying nations.

Globally there is an oversupply of ratings and a growing undersupply of competent engineers and officers. The supply of seafarers to the world is a vital element of Ukraine’s foreign income and Ukraine having solid education training base and traditions is able to compete further in this trend increasing its portion in the world pie.

P & I Insurance

P & I covers ship owners’ liabilities to third parties including their own crew. There are 13 members of the International Group of P&I Clubs which provide liability insurance for about 90% of the world's deep-sea shipowners. All Group Clubs operate on a mutual, not-for-profit base. Premiums are pooled and invested to pay claims directly and to buy various levels of reinsurance. Throughout the world the system is recognized as the most reliable and cost-effective method of providing marine liability insurance.

The specific liability risks covered by P & I Clubs are set out within the individual Clubs’ rules. Frankly speaking the rules of each Club are very similar to one another and the reason is that the Clubs reinsure each other under the International Group Pooling Agreement.

Liability injury claims can involve any person injured due to fault or negligence in operating the ship. An injured party does not have to be on board the vessel for there to be a liability claim against the ship or owners. There are many claims involving seafarers who are injured while ashore, often involving a dangerous mix of alcohol and road traffic.

Types of Claim

Generally speaking the types of claim faced by the Clubs usually fall into one of the following categories in respect of illness injury and death:

• • cargo handlers,
• • line handlers,
• • crewmembers,
• • passengers,
• • agents, pilots, surveyors and other visitors to the vessel.

Much more publicity is given to the occasional major problem on a cruise vessel. But there is no doubt it is very crew claims which occupy most time of many claims staff in the P & I industry. I had a look at some reviews published by P & I clubs and found nearly all of them pay attention to the practice with Ukrainian seafarers and possible problems and scams. Mostly these ones refer to compensation payments. As a rule, any contract of employment has a referral to the terms of the Collective agreement (often known as CBA – collective bargaining agreement) which is concluded between the National Trade Union and the shipowner. There must be a special compensation scale in the Collective agreement, on the base of which the compensation is due in certain cases. On the one hand, the main condition for compensation payment is the absence of the seafarer’s fault. On the other hand, clear payment conditions are to be set in the contract of employment and Collective agreement. This is the biggest problem nowadays with Ukrainian seafarers. Shipowners supported by manning agencies seek to provide the cheap working hands, and sometimes it is not their interest to implement all the above details.

Crew Injury and Illness Claims

So, the owners’ legal liability to pay medical expenses, sickness wages, compensation and funeral expenses to a sick or injured crewmember is insured by the P & I Clubs. The cover includes the cost of repatriation and substituting a crewmember that has been discharged from the ship due to illness or injury. In order to confirm the crewmember’s entitlement to benefits a number of different aspects have to be considered.

The contract of employment is a key indicator as most contracts or collective agreements have clauses which deal with the period of entitlement for medical treatment, sickness wages, etc. The shipowner may recover from the Club the amount paid in entitlements to the crewmember provided that the terms and conditions of the contract have been previously approved by the Club’s Managers. The review of these contracts also enables the Managers to comment on and make recommendations regarding clauses within the contract.

Handling Claims

Typically the crewman or families do not wish to settle the case. It is quite natural. P&I clubs have correspondents in Ukraine. They must have great local knowledge, skills and experience. The bulk of claims, whether crew, admiralty, pollution or cargo are handled entirely by the local correspondents. But things happen and occasionally it is impossible to reach agreement.

In Ukraine as a rule the seafarer (or his family) is represented by local lawyers supported by the Trade Union Officials, or vice versa. At this stage it is necessary to seek advice and support from specialist law firms. In a Ukrainian court it is extremely difficult to fight on employment issues. The legislation is very old (The Labour Code has come into force in 1971 in the Soviet Union era) and does not meet modern requirements. So, preference is to meet with either the crewman or his representatives face to face and negotiate a compromise. Sometimes it may be possible to allow each party to go away with something at the very beginning of the dispute. Sometimes it may involve a relatively inexpensive concession from owners, for instance, to agree an extra period of sick pay or to fund rehabilitation. Sometimes it simply becomes a matter of agreeing payment of an agreed sum, within a short time period and with a further agreed sum for the lawyers representing the crewman.

Loss prevention

Compensation and medical benefits under employment contracts are considerable. Undiscovered or undeclared pre-existing defects do not generally affect shipowners' liabilities towards seafarers who become ill on board the ship.

It is a good idea basing on the Standards of Training, Certification and Watchkeeping to make a requirement that a potential employee must pass a medical examination before commencing his employment. For many years this was treated as a pure formality. The above standard was not high. If there was a problem it was easy for the seaman to find a favourable doctor who would give a pass certificate. The world has changed and many contracts now include large contractual benefits to seaman who are diagnosed with career ending problems while at sea. Some 2007 ITF standard contracts envisage about US$ 100,000 in such cases. Sometimes there are many even more liberal terms.

P & I Industry does not have problems with this provided the crewman passes a genuine examination at an agreed level before beginning his voyage. To overcome the quality problem P & I Clubs now approve Clinics who agree to administer examinations to Club standards. For example, American Club Mutual P&I Association request that seafarers originating from Ukraine (as well as from Latvia, the Philippines, Poland, Romania and Russia) are required to have PEMEs (Pre Employment Medical Examination) performed at American Club approved clinics. Reliance is placed on clinics to perform the PEME on the Club’s behalf. If a clinic is not informed that the seafarer is to have a PEME conducted to American Club’s standards, it cannot ensure that the requisite tasks are performed and the required documentation completed.

In Ukraine, in Odessa and Mariupol, where such schemes were set up, as our colleague Patrick Bond from Marine Response Ltd says (whom I wish to thank much for his contribution to this article), in the first year over 100 seafarers were identified with serious and potentially fatal conditions which resulted in a finding of permanently unfit. If some of these seafarers would have fallen ill at sea the cost to owners and the P & I Club would have been in the millions of dollars. However, it is important not to be simple-minded. Of course not all the men identified by the above clinics immediately left the sea. For sure some of them obtained a PEME from a less scrupulous clinic and went to sea with a different owner and a different P & I Club.

Claims resulting from pre-existing illnesses have been a big problem. And it seems that certain illnesses and medical conditions can be identified only during a PEME. It is estimated that approximately 60% of the vessels entered with the American club have Ukrainian and/or Filipino crews. PEME is a voluntary programme but P & I club managers urge members to employ seafarers who have undergone PEMEs at the club’s approved list of clinics. This is an important step in continuing efforts to improve loss prevention measures. Similar initiatives must benefit the maritime community at large.

The PEME initiative is the first in a series of loss prevention and risk control measures to control the frequency and cost of personal injury and illness-related claims. The PEME approval programme is addressing concerns for the selection of medically fit seafarers. The program must result not only in fewer claims, but also in safer ships, less disruption and fitter and healthier crew.

Crew liabilities constitute a risk which is in rapid increase. Crew claims in Ukraine have become quite difficult to handle. Much of this is due to the discrepancy in provisions of Ukrainian legislation and the seafarers’ Contracts of Employment/Collective Agreements, which are often exploited by the so-called ‘ambulance chasers’, whose activity has much increased lately. This is a field where only a system approach can prevent and limit rising costs. Any case which is serious or may have a serious potential should be analyzed. The purpose of the investigation of personal accidents is to determine the cause and circumstances of the accident with the aim of improving safety of life at sea and the avoidance of similar accidents in the future.