Friday, September 11, 2020
By NEIL HARTNELL
Tribune Business Editor
A prominent Bahamian operator yesterday said the rise in “frivolous” personal injury lawsuits was reaching the point where “it’s not worth taking people diving any more”.
Stuart Cove, principal of Stuart Cove’s Dive Bahamas, told Tribune Business that the increase in litigation was “taking the fun out of it” as clients sued for financial compensation even over instances where they were at fault and his firm blameless.
Speaking after Tribune Business last week revealed how rival, Bahama Divers, was forced to permanently close after a $9m court award over a customer’s death was enforced against it, Mr Cove said he sometimes felt that insurance companies were too quick to settle claims that had no merit.
“It’s a huge concern. We’ve seen a lot more,” he told this newspaper. “It’s always our fault if anything goes wrong, even if it’s not. And these insurance companies would rather settle than fight. That’s my take on it.
“We’ve been through several of these over the years. It’s almost to the point where it’s not worth taking people diving any more. It’s a dangerous sport; let’s call it what it is. You’re going underwater, it can be rough, there can be currents and many of the divers aren’t as well trained as they used to be.
“They’re getting older and less trained, and certainly more sue happy. It’s kind of taking the fun out of it. We’re doing everything we can to make a safe excursion, following all the safety standards and procedures, but our particular dive product can be quite dangerous.”
Describing his company’s insurance coverage as “very, very good”, Mr Cove said increased premiums as a result of rising litigation volumes merely added to the cost of business for himself and other operators in the dive, snorkel and scuba sector.
“Unfortunately they’d rather settle than fight, even when you’re in the right,” he told Tribune Business. “I guess they’ve figured out a formula that after a certain amount it’s easier to pay out than fight because it costs them more.
“But it really annoys me because there’s been some really frivolous lawsuits over the past few years when the clients were in the wrong yet the insurance company chose to pay them out. But it’s still a good business and I love it.”
Matthew Whiteland, owner of Bahama Divers, last week argued that the incident that led to his firm’s closure - while “unfortunate and very sad” - did not stem from negligence on its part as it involved an experienced diver who was part of a larger group.
However, the Supreme Court, in the October 2, 2018, judgment that enforced the US court award against Bahama Divers, provided a salutary lesson for Bahamian companies to take foreign litigation launched against them seriously and properly defend it - especially if the matter is before a US court.
Justice Indra Charles, in her ruling, found that Bahama Divers was the author of its own misfortune in that it was complacent and failed to defend itself against Marla Cramin, the deceased diver’s wife and representative of his estate, before the Broward County circuit court.
She obtained an initial $6.779m judgment, together with $465,019 in statutory interest up to September 10. The interest charge was to run until payment, meaning that this continued to climb to a further hefty sum in following years.
Bahama Divers’ use of Reservation Services International as its Florida-based marketing and reservations agent gave it Mrs Cramin and the estate a US nexus sufficient to bring the initial action, and Justice Charles said the Bahamian company “sat on its rights” and “could have been more proactive in those proceedings”.
She added that Bahama Divers’ enforcement defence should have been its appeal to the Broward County court, and the Supreme Court did not have the power to hear it. Justice Charles noted that the Reciprocal Enforcement of Judgments Act 1999, as well as common law actions, provide two routes for the enforcement of overseas judgments in The Bahamas.
One unanswered question is whether Bahama Divers tried to claim insurance over Jeffrey Cramin’s death. Justice Charles’ judgment shows the company tried to add Summit Insurance Company, the carrier tied to Insurance Management, as a third-party defendant - which the insurer resisted - but no further mention was made of this and the two parties could not be reached for comment yesterday.
Stuart Cove’s, meanwhile, has chosen the opposite approach to Bahama Divers by mounting a proactive defence to similar claims brought in the south Florida court this year by Alison Case, whose late husband, drowned on one of the company’s scuba diving trips due to alleged “negligence”.
Mr Cove declined to comment as the matter is still before the courts, but Stuart Cove’s and its parent, Nassau Undersea Adventures, which maintains an office in Florida, vehemently refuted the claims in their July 10, 2020, defence.
Pointing out that Jeffrey Case had signed a Liability Release and Express and Primary Assumption of Risk form, the Bahamian dive operator said this “holds harmless and indemnifies Stuart’s Cove from any and all liability from the risks associated with the excursion that could result in his death.
“Accordingly, plaintiffs are barred from bringing this action against Stuart Cove’s,” they added. “The cause(s) of death were not due to any action or omission on the part of Stuart Cove’s but due to conditions, events, occurrences neither known to, foreseen nor created by Stuart Cove’s.
“Deceased was himself negligent, which was a substantial contributing cause of the incident resulting in his death, and therefore any right of recovery must be reduced to the extent of his comparative fault.”
Michelle Cove, Stuart’s partner, told Tribune Business that neither The Bahamas nor its dive industry were “unique or being singled out in any way”. Taking a slightly more sanguine view, and noting that risk is present in virtually all participatory outdoor activities, she suggested there were “no more or less” personal injury lawsuits than before.
“With COVID-19 we’re going back and forth with the insurance company now as we will start with a smaller operation,” Ms Cove said. “We’re not operating because we’re in the middle of renewing our insurance, and we will not take the boat out without that in place. Our partners require it.
“We just have to ensure we take the necessary steps for following safety standards and procedures, but also to follow the policies outlined by government agencies and regulators. The Bahamas has done a very good job because the Port Department has very high standards.
“They come out and inspect all the boats and go through with a fine tooth comb to make sure we meet all standards and protocols before they issue a licence. I would say The Bahamas is becoming more rigorous in standards and safety protocols.”
Voicing sympathy for Bahama Divers’ plight, she added: “I’m desperately sad that happened to them. They’re really nice people and an icon in the dive industry. It’s really unfortunate and I hope they return in another way. Competition is good, and it’s good to have multiple people on different islands.”