LEGAL RISK IN A TIME OF AUTOMATED SHIPS AND OTHER STUFF FORMERLY OF SCIENCE FICTION

By Norma Wheeler Monday, February 26, 2018
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I am sometimes asked if lawyers will be become obsolete in a future where it is conceivable (and in my view, probable) that software packages will churn out legal advice and contracts. My answer to that question is that good lawyers assist their clients to navigate change and find legal solutions that help their clients’ businesses to grow, despite the fact that we live in a world where little is certain. As a shipping lawyer, that is especially true, because technology is changing how ships are made, financed and operated, which in turn creates new legal challenges to navigate. This article explores a few of the technological disrupters in shipping, and the associated legal risks.

How is the way ships are made changing?

In November 2017 Damen shipyard announced that it had created the world’s first class approved 3D printed ship’s propeller. Moving away from casting ship parts in a mould to 3D printing offers increased design flexibility and the potential to lower fixed costs. A legal quandary that will almost certainly arise is where liability lies for defective parts: is it the 3D printing software developer, the manufacturer or the supplier of materials? On what terms should the 3D printing software be licensed to deal with these issues and do these comply with consumer protection laws in the jurisdiction of the licensor and / or licensee?

How could the way ships are financed change?

Shipowner.io is launching a platform offering the public an opportunity to finance shipping assets and services by purchasing a token (which represents a portion of a maritime asset).  The tokens are secured using block chain technology. The company’s byline is: “Be a Shipowner. Anyone. Anywhere. Anytime.” This model represents a possible win-win for shipowners and would-be investors: shipowners are given access to cost effective financing, and the barriers to entry in the market are lowered for investors.

Trailblazing of this kind leaves legal uncertainty in its wake. What are the tax implications? What is the regulatory framework? What rights of protection do users have? Shareholders in a traditional company have certain rights which afford a degree of protection, for example the right to certain information and, in some instances, the right to have a say in significant business decisions. Traditional ship financers hold a mortgage over the vessel, which can be foreclosed on default. Will platforms of this kind evolve to provide further regulatory protection to users?

How could ship operation change?

Autonomous shipping is a present day reality. In 2018 the US navy acquired its first unmanned ship – the ship is fully robotic, transoceanic and intended for surveillance. In October 2017, Roll Royce announced its deal with Google allowing use of Google’s Cloud Machine Learning Engine (the same software, with learning algorithms, that runs Google’s image and voice search products). The software will be set to work “learning” from data collected from cameras onboard vessels, in addition to data from sources such as AIS, with the aim of launching a fully automated ship in the near future.

The host of legal questions arising from automation is as vast as the imaginations of the science fiction enthusiasts among us. Who would be responsible for a casualty caused by an automated ship: the land-based control room, the software developers, or the vessel owner, or perhaps as many science fiction writers predict, the artificial intelligence behind software, which might become a legal person in its own right? Imagine a world where the AI comes to explain itself (perhaps with a preferred pronoun) at trial! On a more practical note, would autonomous vessels be susceptible to hacking? If the vessel was hacked and used in an act of terrorism, for instance to ram a very large crude oil carrier (VLCC), or to block the entrance channel to a strategically important and busy harbour, could the vessel owner be held liable for negligent failure to maintain adequate cyber security? 

How is the way the ships are serviced changing?

Ports are one of the maritime service providers at the forefront of pioneering technology to improve efficiencies in shipping.  Rotterdam’s ambition is to be the world’s smartest port and the scale of its digitisation initiative is eye-watering. It is installing sensors across 42-kilometers of land and sea to gather data about “tides and currents, temperature, wind speed and direction, water levels, berth availability and visibility”. This data will be processed by software that can generate information to be used for planning purposes, such as determining the best time for a ship to  berth. Will initiatives such as this one, in time, eventually raise the bar of what constitutes a safe port, leaving ports that fail to invest in technology (and charterers that use them) susceptible to unsafe port claims? Does the greater knowledge harnessed by the port impose legal liability to issue more accurate navigational warnings etc.? The answer to both these questions is surely “Yes”.

Use of drones will dramatically improve maritime services offered to vessels. The classification society, DNL GL offers the assistance of drone technology in its surveys, reducing the survey time and accessing enclosed or difficult to access portions of the vessel more easily. Wilhelmsen Ship Agency has launched a drone project and has conducted test flights with drones successfully delivering packages to vessels. As far as the future application of drones goes, how about flying your lawyer in virtually to offer real time advice if your vessel has landed in a spot of trouble? The cost and time saving speak for themselves.

Other change

These are but a few of the plethora ways in which shipping is changing. Other innovations such as the applications of blockchain technology in shipping and international trade are also set to change the way the business of shipping is conducted.  It is entirely possible that the future could see traditional legal practice becoming obsolete, but it is my prediction that our fast changing world will continue to need lawyers to assist to create law and legal solutions to navigate emerging technologies, and a new world of legal rights, obligations and liabilities.

This article first appeared in The Sunday Tribune