58
Therefore, inside the locks, the Commission is essentially an insur-
er of all claims, although technically, the Commission may, in fact,
reduce the award in proportion to contributory negligence. I under-
stand that.
Outside the locks, however, the memorandum provides that the
Commission must adjust and pay those claims not exceeding
$120,000; and, again, the award must be reduced by the contribu-
tory negligence of the vessel and its crew.
This leads me to this question: Does that mean within $120,000,
and over $120,000 if Congress approves, that the Commission is
liable for the claim whether or not there is proof that the Commis-
sion was negligent? The Commission is liable for this claim only to
be reduced by any proof of contributory negligence?
Mr. McKABNEY. The position that the Commission has so far
taken since the treaty went into effect in October of 1979 is that
the determination with respect to claims for accidents occurring
outside the locks is made on the basis that only a showing of a neg-
ligent act or omission on the part of the Commission will result in
liability.
Mr. TAUZIN. I am glad to hear that. What I still cannot under-
stand in the law is the next series of questions. I hope you will help
me here. As I understand the law, if an inside-the-locks accident
occurs, and the damage in the inside-the-locks accident is what-
ever-$120,000, $200,000, $1 million-you can settle it as an inside-
the-locks claim. Is that correct?
Mr. McKABNEY. That is correct, sir.
Mr. TAUZIN. If the damage occurs outside the locks and the Com-
mission employee's negligence operates, let's say, to only 5 percent
of the claim, the master of the ship is 95 percent negligent, and the
damage is $120,000 plus, then in that instance, even though the
Commission's liability is limited to maybe $5,000 or $6,000 or
$10,000, the Commission cannot settle that claim; it has to bring
that claim to Congress?
Mr. McKABNEY. That is correct, sir. The Comptroller General
has construed the statute to read that if the claim itself--
Mr. TAUZIN. Total claim?
Mr. McKABNEY. Total claim exceeds the $120,000, then the Com-
mission may take no action on it except to analyze it, collect the
data, and send it to the Congress with the recommendation of the
Commission.
Mr. TAUZIN. So the Commission has been empowered by the act
to settle claims within the locks, with no limit; and that Commis-
sion, however, in some cases may not be able to settle claims out-
side the locks where it has been determined the Commission's lia-
bility may be no more than a few thousand dollars?
Mr. McKABNEY. That is correct, sir. The Panama Canal Compa-
ny from 1951 until October 1979 had authority to settle those out-
of-locks cases for any amount, but with its determination being
subject then to judicial review.
Mr. TAUZIN. It seems to me that we are in desperate need for a
change in the law in that regard if we are going to have some com-
monsense applied to the settlment of these claims.
There is another provision in the law that Mr. McAuliffe has
pointed out that is appalling to me. As I understand your testimo-