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The 1950 act, of course, transferred the operation of the Panama
Canal, effective July 1, 1951, to the Panama Railroad Company
which was renamed the Panama Canal Company. Section 3 of the
1950 act amended section 10 of title 2 of the Canal Zone Code gov-
erning claims for vessel damage. The Panama Railroad Company
was generally subject to suit on tort claims, so the transfer just
mentioned and the amendment of section 10 of title 2 would:
One, continue the previous rule imposing absolute liability for
damage in the locks;
Two, for the first time extend the liability of the company on
claims for vessel damage outside the locks caused by the negligence
of Panama Canal employees;
Three, continue the consent to suit against the agency operating
the canal for damage in the locks, and extend this consent to suit
for vessel damage outside the locks;
Four, continue the immunity of Panama Canal employees from
personal liability for vessel damage.
Assuming the corporation could sue and be sued, one effect of
the 1950 act was to give owners of vessels damaged in the canal
outside the locks the right to sue the entity operating the canal.
We think this result is legally and commercially correct and urge
that this should be reinstituted.
The 1950 act's extension of liability for outside-the-locks claims
to the governmental entity operating the canal is an accurate re-
flection of a properly perceived need for a government body which
operates in a commercial context to accept responsiblity for the
acts and omissions of its employees. Moreover, such extension is
consistent with the general trend of congressional action in recent
years which has been toward expansion rather than contraction of
Government liability with respect to tort claims. Acceptance by the
Commission of responsibility for damage from inside-the-locks inci-
dents as set forth in both the 1950 and 1979 acts is a perfect exam-
ple of the principle that a government body functioning commer-
cially should be liable for its acts and omissions. The requirement
of the 1979 act, however, that Congress approve settlement of out-
side-the-locks claims exceeding $120,000 is an aberration which ef-
fectively deflects from the Commission a liability which should rest
directly there. Interposition of Congress between the claimant and
the Commission serves no constructive purpose but rather only pro-
longs the settlement process to the detriment of the injured party.
Unlike most, if not all other waterways, ports and harbors, in
the Panama Canal, the pilot is in complete control of the vessel.
There is nothing advisory about this function as is the case in the
ports and harbors of the continental United States. Since the
Panama Canal pilot is in complete control of the vessel during
transit, we do not see any basis for shielding the Commission from
liability as is accomplished by the 1979 act. It is difficult to see how
an argument that the Commission should not be responsible under
the principle of respondeat superior for the negligence of the pilot
when he is in complete control can be sustained. The pilot assigned
to a vessel shall have control of the navigation and movement of
such vessel. There is no distinction, regulatory or otherwise, in the
pilots' duties and obligations inside and outside the locks. Of
course, the pilot could be made to operate in an advisory capacity,