LICENSED CAPTAIN OR NOT?
I recently received a call from a long time marine business client
looking for some help resolving a problem that had arisen regarding the need
for a licensed captain.
For the past several years, this particular client has operated a camp
for kids with cancer at his waterfront property. The camp is free
for all children who are referred through a particular well known local non
profit. The entire cost of the camp is
underwritten by this particular client so campers pay nothing.
Not surprisingly, one of the favorite activities for the kids is going on
their daily boat trip. Trips vary each
day taking campers fishing, water skiing, eco tours, trips to a waterfront restaurant
for lunch, etc. These boat trips have always
been conducted by volunteer (but very experienced) boat operators.
Based upon the outstanding feedback received from camp attendees and
their parents, my client decided this year he would offer a similar summer camp
for local kids. This summer camp
however, includes a minimal fee to cover expenses for the week. My client arranged to use the exact same
experienced volunteer boat operators whom he used for his free camp, but was
told by his insurer they would not issue an insurance policy unless licensed
captains were operating the boats taking campers out on their daily boat trips.
His question of course, was why do I need a licensed captain for my
summer camp when I never needed one before.
I must admit I have never
encountered an insurance company refusing to issue an insurance policy for not
using licensed captains, but as a business lawyer in an admiralty and maritime firm, every year I do get the same basic question from
at least a couple of my clients, that being: am I required to have a licensed
captain operating my boat?
The Coast Guard provides a very
good and detailed explanation of when a licensed captain is required.
Under Coast Guard rules, a
licensed captain is required for all charter operations. Charter boats are referred to
as uninspected passenger vessels (UPV). Coast
Guard regulations make it illegal for a UPV to engage in “passenger for hire” operations without a Coast Guard licensed captain.
A passenger for hire is a “passenger for whom a consideration is
contributed as a condition of carriage whether directly or indirectly flowing
to the owner, charterer, operator, agent, or any other person interested in the
vessel is a passenger for hire.”
Basically, anyone who is required
to contribute something to get on the boat.
Thus, in my client's case I had to break
him the bad news. Coast Guard regulations demanded he get
licensed captains to operate the boats for summer camp because attendees
were required to pay a fee to attend camp. Conversely, since
attendees at his kids with cancer camp were not required to pay anything to attend, this would be classified as a
recreational excursion and volunteer boat operators were acceptable (I’ll leave
for another day a discussion of the propriety of volunteer boat operators from
a boating accident and boating injury perspective).
Aside from the importance of the
question for my client, locals up and down the east coast need to understand this
is an important issue for every weekend warrior.
It's no secret the Coast
Guard has been cracking down up and down the east coast on what they perceive to be unlawful charter boats. It is not uncommon for a small center console type boat with several individuals aboard heading
in from a day of fishing to be stopped by the Coast Guard. Questions usually begin with an eye towards a safety check, but then quickly transition in to questioning the vessel operator
and passengers separately regarding how the voyage was financed.
In fact, there appear to be instances where
the Coast Guard has determined an illegal charter to exist where a boat owner
basically said to one of his buddies “Hey Joe, if you pay for half the fuel, food and drinks we can go out
trolling for dolphin”. The logic presumably being that
Joe’s buddy felt he was required to pay for half the fuel, food or drinks to go
fishing. Illegal charters can subject a
vessel operator to criminal and civil liability of up to $40,000.00 per
violation.
Given the high degree of
confusion surrounding the issue, the Coast Guard has published guidance specifically stating it is not an illegal charter when passengers freely and voluntarily contribute
to the voyage. Thus, for anyone who fishes recreationally, the lesson to be
learned is if your fishing buddies don't feel they
are freely and voluntarily sharing the expenses of the fishing trip, an otherwise fun
day of fishing could end up as a very costly nightmare.