OceanGate faces millions in payouts to families despite Titanic sub ’death waivers'

OceanGate could face multiple legal actions in different countries following the "catastrophic implosion" of the Titan sub - despite all passengers signing liability 'death waivers'.

The company's submersible lost contact with the surface on Sunday, an hour and 45 minutes into an eight-hour voyage to the wreck of the Titanic, around 350 miles off the coast of Newfoundland, Canada.

Despite an international search effort to locate the missing submersible and rescue the five people on board - father and son Shahzada and Suleman Dawood, French diver Paul-Henri Nargeolet, British businessman Hamish Harding and OceanGate CEO Stockton Rush - the US Coast Guard said on Thursday that they had recovered debris that was consistent with a "catastrophic implosion" that killed everyone on board.

Read more: Titanic sub - Live: Families could sue OceanGate despite death waivers, says expert

Prior to the launch of the sub, all passengers were required to sign a liability waiver, which, according to one former passenger, mentioned death three times.

“Death is always lurking, it’s always in the back of your mind,” journalist Mike Reiss, who previously visited the wreck, told The New York Post. “Before you even get on the boat, there’s a long, long waiver that mentions death three times on page one.”

Despite passengers being required to sign such waivers, legal experts believe families of the deceased may still be able to bring legal acton against OceanGate, amid suggestions the company ignored safety warnings dating back to 2018 about the "experimental submersible".

Maritime law expert Barry Stimpson, of Squire Patton Boggs Commodities and Shipping Group, told Yahoo News that potential lawsuits could be brought against the company in both the US and UK depending on what the claimants were advised by their legal teams.

And the laws in both countries differ in both locations in terms of whether the liability waiver would stand.

Read more: Explorer community pays tribute to five men killed on Titanic sub as families ‘united in grief’ (The Independent, 6-min read)

"The US position on them is that waivers, if they are correctly drafted, and they are drafted by US lawyers for companies like OceanGate, they are incredibly detailed and they try to cover everything. In the US, they are effective unless there has been gross negligence - it takes more than just mere negligence, it has to be a higher level than that," he told Yahoo News UK.

"That would normally protect a company against injury or death."

However, under UK law the liability waiver may not offer OceanGate as much protection.

"The UK is different," Stimpson explained. "The Unfair Contract Terms Act 1977 basically prohibits you from excluding liability for personal injury or death where there is negligence, so that's a lower level - and that is important in this case because there's a lot of suggestions that there has been negligence around the vessel."

Indeed, in 2018, former OceanGate employee David Lochridge brought a lawsuit against the company, which claimed passengers were subjected to "potential extreme danger in an experimental submersible" as a result of "OceanGate's refusal to conduct critical, non-destructive testing of the experimental design of the hull". The case was settled out of court.

Director James Cameron, who has completed 33 dives to Titanic, told the BBC he believed OceanGate had "cut corners" and "didn't get certified because they knew they wouldn't pass".

"I was very suspect of the technology that they were using. I wouldn't have gotten in that sub," he said.

"We now have another wreck that is based on unfortunately the same principles of not heeding warnings," Cameron added. "OceanGate were warned."

However, the co-founder of OceanGate, Guillermo Sohnlein, who left the company 10 years ago, told Sky News that its CEO Stockton Rush, who died on the Titan sub, was a "keen risk manager".

"He was a talented engineer, he was a very intelligent person, he was a passionate explorer, but mostly he was a keen risk manager," Sohnlein said.

"He was very well aware of the risks of operating at these deep depths and he was very committed to safety."

The families of the passengers have not yet commented on whether they will be pursuing legal action against OceanGate. However if they do, the company may use maritime law to bring so-called limitation of liability action, which lets owners of vessels involved in an accident ask to limit any damages to the present value of the vessel.

Since the Titan was destroyed, that would be zero.

However, Stimpson explained that while this could be the case, the international law - which was originally established in order to minimise potential damages if two ships crashed and therefore encourage global shipping - meant payouts were usually based on the weight of the submersible.

In the case of the Titan, legal experts told Yahoo News they estimated a total payout of between $2-4 million in total (meaning the families of the passengers involved would share this amount) unless lawyers were able to argue successfully for the damage limitation to be removed.

Maritime lawyer Mike Burns, a partner at Weightmans LLP, told Yahoo News that the "complex" and unusual situation meant it was difficult to fully predict how the case might be argued, adding that companies were bound by certain conventions over negligence and claims.

"Using the example of a cruise liner, if there is loss arising from negligence, they would be liable but the liability would be capped to certain financial levels, and those levels aren't necessarily the value of the ship but depending on which convention applies," he said.

"The level of liability isn't fixed to the value of the ship but the tonnage of the ship... the bottom rung of that scale is for really small ships about $2 million. Assuming you get around the waivers then the next analysis would be if a dependent brought a claim... there might be a high claim for loss of income and support from the passengers [on the Titan, who were largely wealthy]... they would be able to limit the liability under an international convention which entitled boat owners to cap liability at certain levels."