Divisions over cruise disaster pay-out plan

Costa Cruises, Italian operator of the Costa Concordia liner that sank off the island of Giglio two weeks ago with more than 4,200 people on board, said on Friday that it had reached a compensation agreement for passengers with 15 Italian consumer organisations.

The agreement, which offers passengers €11,000 each plus reimbursement of the cost of the cruise, return travel and other expenses, was however rejected by at least two Italian consumer groups that are considering class-action lawsuits.

Separately, Miami-based Carnival Corp, parent company of Costa Cruises, is facing legal action in the US brought by a crew member.

Costa Cruises said the agreement, reached late on Thursday, covered passengers for losses of belongings and psychological trauma but did not apply to those who had suffered injuries or to the families of those who lost their lives.

More than 3,200 passengers were on board the cruise liner, the largest ship ever built in Italy, which hit rocks on January 13 and then ran aground where it turned on its side. Rescue workers have recovered 16 bodies from the half-submerged wreck and 16 other people are listed as missing.

Costa Cruises said the compensation exceeded the amounts foreseen in international conventions related to such events.

Carlo Pileri, president of Adoc, one of the 15 associations that signed the agreement, called it a “historic accord” that would avoid the need for a class-action lawsuit, noting that about 900 of the passengers were Italian.

Given the length of time – possibly years – it might take to pursue further action through the Italian courts, some consumer groups believe that passengers could be attracted by the offer of immediate compensation.

But Carlo Rienzi, head of the Codacons consumer association, urged passengers to reject the offer and pursue a class-action lawsuit it is organising in Italy and the US. Codacons said last week that 200 passengers had joined its suit. “It’s a really bad offer from Costa,” Marco Ramedori of Codacons told the Financial Times.

Marc Bern, senior partner at Napoli Bern Ripka Shkolnik, one of the law firms organising the lawsuit, called the offer “insulting”. Codacons said that it was looking for at least $160,000 per passenger. “Nobody thought they’d get on the next Titanic,” Mr Bern said.

Mr Bern yesterday filed a separate civil suit in Florida against Carnival and Costa Cruises claiming compensatory damages in excess of $10m and punitive damages of $450m for six passengers. It alleges the companies were aware that the ship’s captain, Francesco Schettino, did “sail-by-salutes” and that they “were aware, or should have been aware, that Costa Concordia did not have a sufficient alarm system that would alert crew and passengers of an emergency”.

Confconsumatori, another consumer group, also said it had decided not to sign the agreement pending the results of Italy’s criminal investigation into the disaster.

News agencies citing court documents filed in a federal court in Chicago on Thursday reported that Carnival was being sued by crew member Gary Lobaton who is seeking a class-action status to represent all victims of the accident.

“The defendants failed to properly and timely notify all plaintiffs on board of the deadly and dangerous condition of the cruise ship as to avoid injury and death,” Mr Lobaton, who was living in Lima, Peru, said in the complaint. They “were abandoned by the captain”, he said.

The International Transport Workers’ Federation, meanwhile, said it had won an agreement on compensation for the 1,023 crew members who were aboard the vessel when it ran aground. Workers will be paid until the end of their contracts or at least for two months for those near the end of their contracts. They will also be able to claim reimbursement for some of the expenses incurred, as well as for travel and healthcare expenses and up to $3,570 for any personal effects lost.

Francesco Schettino, the captain, is under house arrest accused of multiple manslaughter, causing a ship wreck and abandoning his ship. Italian investigators have so far focused on the roles played by the ship’s officers and have not extended their probe into actions by Costa Cruises or Carnival.

Costa Cruises has blamed the captain for the disaster and has also filed a lawsuit as an “injured party”.

Marco Brusco, a senior Italian Coast Guard official, told a Senate committee hearing on Thursday that lives had been lost because the captain had “wasted a precious hour” before giving the evacuation order.

Investigators have not yet opened the ship’s black box, which should contain recordings of the telephone conversations that were held between Mr Schettino and Roberto Ferrarini, head of operations for Costa Cruises, after the ship hit the rocks some 150 metres off Giglio and before the captain issued the SOS and evacuation order.

Pierluigi Foschi, chief executive of Costa Cruises, has accused the captain of deviating from the company-approved route and failing promptly to alert the operators of the gravity of the situation.

Additional reporting by Robert Wright in London