Shipping

In a nutshell

Shipping lawyers deal with the carriage of goods or people by sea, plus any and every matter related to the financing, construction, use, insurance and decommissioning of the ships that carry them (or are arrested, sunk or salvaged while carrying them). Despite being the preserve of specialist firms, or relatively self-contained practice groups within larger firms, the discipline offers varied challenges. The major division is between 'wet' work relating to accidents or misadventure at sea, and 'dry' work involving the land-based, commercial and contractual side. In extension, disputes or litigation relating to contracts mean there is also a contentious side to dry work. While some lawyers in the area may be generalists, it is more common to specialise.

Shipping

What lawyers do


Wet lawyers

  • Act swiftly and decisively at a moment’s notice to protect a client’s interests and minimise any loss.
  • Travel the world to assess the condition of ships, interview crew or witnesses and prepare cases.
  • Take witness statements and advise clients on the merits of and strategy for cases.
  • Handle court and arbitration appearances, conferences with barristers and client meetings.

Dry lawyers

  • Negotiate and draft contracts for ship finance and shipbuilding, crew employment, sale and purchase agreements, affreightment contracts and the registration and re-flagging of ships.
  • May specialise in niche areas such as yachts or fishing, an area in which regulatory issues feature prominently.
  • Handle similar tasks to wet lawyers in relation to contractual disputes but are less likely to jet off around the world at the drop of a hat.

The realities of the job

  • Wet work offers the excitement of international assignments and clients, so lawyers need to react coolly to sudden emergencies and travel to far-flung places to offer practical and pragmatic analysis and advice.
  • Despite the perils and pleasures of dealing with clients and instructions on the other side of the world, the hours are likely to be steady beyond those international rescue moments.
  • Non-contentious work touches on the intricacies of international trade, so it’s as important to keep up with sector knowledge as legal developments.
  • Dealing with a mixed clientele from all points on the social compass: you’ll need to be just as comfortable extracting a comprehensible statement from a Norwegian merchant seaman as conducting negotiations with major financiers.
  • Contentious cases are driven by the procedural rules and timetable of the court or arbitration forum to which the matter has been referred. A solid grasp of procedure is as important as a strong foundation in tort and contract law.
  • Some shipping lawyers do come from a naval background or are ex-mariners, but you won’t be becalmed if the closest comparable experience you’ve had is steering Tommy Tugboat in the bath as long as you can show a credible interest in the discipline.
  • Old superstitions thought it bad luck to have women aboard a ship. Though not an all-boys club, parts of the shipping world are still male dominated; women lawyers and clients are more commonly found on the dry side.
  • In the UK, shipping law is centred around London and a few other port cities. Major international centres include Piraeus in Greece, Hong Kong and Singapore. Some trainees even get to work in these locations.

Current issues

October 2020

  • Analysts originally thought the escalating trade war between the US and China (which many feared would cause another recession) is unlikely to affect the shipping industry. However, in response to mainland China’s new national security law, the US ended its extradition treaty and 30-year-old reciprocal tax exemptions on shipping income with Hong Kong in August 2020. As a result, US shipping companies will now have to pay taxes in both the US and Hong Kong, while Hong Kong-based shipping companies will be subject to gross income tax when sending cargo to the US. The US had been Hong Kong’s second biggest trading partner, with China taking first place. More than six other countries, including the UK, have so far ended their extradition agreements with Hong Kong.
  • Uncertainty around Brexit continues to affect the outlook for many industries and shipping is no different. In the last year, the UK fleet decreased by over 30% as a result of Brexit-related concerns. A worst-case scenario for UK companies would be likely to include tariffs on trade with the EU, potentially resulting in a shortage of fresh produce and rising food prices. Brexit could also give rise to disputes if contracts drafted pre-Brexit make vague reference to the EU or presume the existence of UK membership in the EU. 
  • Cruise ships proved to be instrumental in identifying how the Covid-19 virus spread and gave indications of its severity and presence in those without symptoms. In February 2020, a passenger who had been aboard the 'Diamond Princess' in Hong Kong tested positive for the virus. The ship was quarantined in Japan, where officials carried out 3,000 tests: some people were tested multiple times to analyse how the virus spread over time. More than 700 of the 3,711 passengers and crew members tested positive, with 18% having no symptoms. Analysts used data from the ship to show that the case fertility rate in China was just over 1%, despite the WHO’s estimate of 4%.  
  • The UK classified seafarers as key workers during the pandemic, but international lockdown restrictions prevented crew changes and meant that roughly half a million seafarers were stuck at sea. Since the outbreak of the virus, only 25% of crew changes actually took place. Following the UK’s International Maritime Summit, 13 countries agreed to allow crew changes.  
  • Tensions between Iran and the UK flared up after the UK seized a tanker transporting Iranian oil off Gibraltar in July 2019, following suspicions it was carrying oil to Syria against EU sanctions. Despite UK warships shadowing British oil tankers through the Strait of Hormuz, Iran’s Revolutionary Guard then arrested the British-flagged 'Stena Impero' oil tanker and held it for two months for allegedly breaking maritime law by turning off its tracking devices. The UK and the US joined forces to protect ships travelling through the area, further increasing tensions. The Iranian vessel was held in Gibraltar for six weeks, before reportedly setting sail for Greece. It was renamed 'Adrian Darya 1'.  
  • The climate crisis is having a significant impact on the shipping industry. It is now mandatory for ships to use a new environmentally friendly fuel, which has reportedly impacted the ability of many ships to run profitably. On another note, Google shipped hardware rather than flying it in 2018, which reduced its per-unit, transport-related emissions by 40%. The company aimed for its delivery of hardware to customers to be carbon-neutral by 2020. In addition, several Japanese companies have teamed up to produce the world’s first zero-emission tanker by 2021. In August 2019, the UK government said that from 2025 all new ships it ordered must be fitted with zero-emission technology. The latest International Maritime Organization Greenhouse Gas Study indicated that despite a 40% increase in sea trade between 2008 and 2018, CO2 emissions from the shipping sector fell by more than 10%. The organisation also revealed it’s on track to halve emissions by 2050.
  • China has signed a $1.1 billion deal with Sri Lanka to take control of its deep-sea port at Hambantota – a move that reflects its 'One Belt, One Road' initiative to increase trading links to Europe.