106
sels during the time necessary for an investigation by the Commission of marine
casualties for which the Commission is ultimately liable.1" Prior to the 1979 Act,
the established case law provided that the former Panama Canal Company was
liable for such delays which solely benefited the Company by affording it an oppor-
tunity to construct a defense to such claims if it could do so.19
In the shipping business, time is money and it is simply inequitable for the new
Commission to have the power to detain a vessel, not for some general police pur-
pose-as in a Coast Guard investigation-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 legislative proce-
dure, such as those addressed today, would be required as time proved necessary.20
The Association appreciates your close consideration of these matters and we anx-
iously await your solution to these problems.
Mr. HUBBARD. Thank you very much, Almer Beale. Let me take
this opportunity to say that much of the assistance provided the
chairman and other members today has come from Ed Welch, to
my extreme right your left the counsel for the full Merchant
Marine and Fisheries Committee, and to my right also, closer to
me, John Long, assistant counsel for the full Merchant Marine and
Fisheries Committee; from Janie Lawson, on my far left, the staff
director for our subcommittee; from Jana Oakley to my right, staff
assistant; and Robin McClung to my left, minority staff assistant.
They are very helpful.
You say the Federal Government now need not worry about
paying a portion of a claim because the canal, by law, must be fi-
nanced by tolls solely. What would -happen if a large claim sur-
passed the cumulative reserve?
Mr. BEALE. Mr. Chairman, during the interim time the claim is
being processed, if the Canal Commission knew about it, there
would have to be immediate adjustments in the toll rates to pro-
spectively take care of the claim. Otherwise, Congress would have
to go ahead and advance the money through appropriations and
then recapture it by with adjusting the toll base.
In Mr. Kujawa's testimony he proved the reserve mechanism for
claims does work. The Commission mentioned something about
buying some catastrophic insurance. I think that is an alternative
that could be considered which that would avoid a need for any im-
mediate adjustment in the toll base and it is one way it could be
handled.
Mr. HUBBARD. Would a successful claimant be willing to wait for
his money until a higher toll structure could be put in place to re-
plenish the reserve or would he insist on immediate payment from
the General Treasury?
Mr. BEALE. I can't subjectively answer that question. I think it
would have to be the individual shipowner's choice. Ideally, of
course, he would want to be able to satisfy the claim immediately
or satisfy his judgment immediately.
If you had catastrophic insurance which the Canal Commission
had secured, that would obviate the need for any waiting period.
18 22 U.S.C. 3777, 3774(6) (1979).
'9 Gulf Oil Corp. v. Panama Canal Co., 481 F2d 561 (5th Cir. 1973).
20 22 U.S.C. 3602(d)(3) (1979).