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the Commission, not even the newly created Admiralty Court in
the Republic of Panama.
In the recent act, the authority of the new quasi-autonomous
Panama Canal Commission to settle claims arising from casualties
occurring inside the locks is likewise unfettered. Moreover, claim-
ants aggrieved by their inability to conclude what they would
regard as a favorable settlement with the Commission may sue it
on inside the locks claims in the U.S. District Court for the Eastern
District of Louisiana.
However, the authority of the Commission to settle claims aris-
ing from casualties occurring outside the locks is limited to
$120,000. For these claims exceeding $120,000, special congressional
review and approval is necessary. And no claim, regardless of size,
arising outside the locks has a forum in which claimants may sue
the Commission-not even the newly created Admiralty Court of
the Republic of Panama.
The absence of a forum altogether is, by itself, a cause for much
concern. Moreover, procedurally there is no basis today for distin-
guishing between claims arising from casualties inside or outside
the locks. Unlike claims against the old Panama Canal Agency
which were funded by the U.S. Treasury without regard to tolls,
claims against the new Panama Canal Commission should be and
will be funded out of tolls. Thus, world shipping will bear the cost
for such accidents by surcharging the frequent users of the canal.
And a change in the claims procedure, so direly needed, will not
remove this underlying equitable premise.
Congress is much too busy to be burdened with the time consum-
ing examination of liability testimony and damage documentation
of these ongoing claims. Moreover, judicial review of tort claims is
all but basic to our democratic system. Because of the heavy usage
of the canal by international shipping and the involvement of the
United States with the operation of the canal until the end of the
century, the need for a change to a more uniform procedure is ob-
vious.
A final problem with the 1979 act which needs legislative correc-
tion is the provision which shields the Panama Canal Commission
from liability for detention of vessels during the time necessary for
an investigation by the Commission of marine casualties for which
the Commission is ultimately liable.
Prior to the 1979 act, the established case law provided that the
former Panama Canal Company was liable for such delays which
solely benefitted the Company by affording it an opportunity to
construct a defense to such claims, if it could do so.
In the shipping business, time is money and it is simply inequita-
ble for the new Commission to have the power to detain a vessel,
not for some general police purpose-as in a Coast Guard investiga-
tion-but strictly for its own litigation purposes to defend against a
claim. If the Commission needs to delay a vessel to investigate a
casualty and later it is determined that the Commission is liable
for the casualty, the Commission should compensate the shipowner,
as was previously the case under the former practice.
Of course, the 1979 act contemplated that adjustments to the leg-
islative procedure, such as those addressed today, would be re-
quired as time proved necessary. The association appreciates your