The risk of collision is reduced by virtue of the continuing developments in navigational technique and instruments, but are increased by growth in the quantity of marine transportation.
Once a collision between vessels take place, there can be substantial damages resulting from life and property claims and many parties such as shipowners, property owners and third parties can be involved, which gives rise to complicated legal relationship between them. Although the legal nature of collision is a case of torts in civil law, the Korean Commercial Code provides collision provisions because the collision is regarded as a special act in Maritime law and it is difficult to assess properly collision damages by the civil law only.
The collision provisions in the Korean Commercial Code was enacted in succession to the Collision Convention. The law on compensation for collision damages, which in the Korean corpus juris is set forth in Articles 843 through 848 of the Commercial Code.
It is discussed the general principle of the liability of compensation for collision damages according to the Collision Convention and the Korean Commercial Code. The provisions of collsion in this Convention and Code is largely concerned with damage to vessels, cargo and passenger.
Collisions may be classified as follows : (1) Where neither vessel can be said to be at fault(termed "inevitable accident") or where it is impossible to accord the fault to either vessel (termed "inscrutable fault") (2) Where one vessel is solely to blame and (3) Where both vessels are to blame. Where only one of the ships is to blame, there is not question as to which vessel incurs the legal liability. But where two or more ships are to blame the degree of fault must be assessed in order to establish the proportion of liability which attaches to each defaulting vessel.
The liability imposed by this principle attaches in cases where the collision is caused by the fault of a pilot even when the pilot is carried by compulsion of law. All legal presumptions of fault in regard to liability for collision are not admitted in the Collsion Convention and the Korean Commercial Code.
It is discussed also the liability of other persons such as tug owner, harbour master, and controller of the vessel traffic service including time charterer.
It is discussed about the scopes and kinds of collision damages which are recoverable. The general principle for the assessment of damages is restitutio in integrum.
The damages which are recoverable are all damages arising from direct and immediate consequence of the collision, and must be a link or a chain between the collision and the damage. There are collision damages to the vessel including repair cost, their cargoes, to the effects or other property of the crews, passengers, or other persons on board and death or personal injuries, interest, etc.
The 3/4ths Collision Liability Clause forms a supplementary contract additional to the basic cover for loss of or damage to the insured vessel. And the wording "pays or becomes liable to pay by way of damages" indicates that the clause relates only to damage in tort and not those applying as a result of a contractual agreement. Furthermore, this clause limits the amount recoverable under the clause to three-fourths of the insured value and amount which the assured "becomes liable to pay and shall pay".
The clause deals with the subject of cross liabilities. A settlement under the policy on this basis depends on two factors. In the first place it can only arise when both vessels are to blame secondly, neither vessels must have limited liability. The effect of the cross liabilities settlement is to prevent the assured items of loss of earning from extinguishing or diminishing a claim which would otherwise fall on the insurers as a claim for damage done.
The certain liabilities resulting from collisions which are excluded from the scope of the collision clause are known as 'protection and indemnity' risks and they are usually covered by the P&I Club.