Offshore wind collisions – costly claims and legal complexity
The construction of offshore wind farms near busy shipping routes has already resulted in a number of collisions between vessels and offshore wind infrastructure. As the number of wind farms increases, so does the collision risk. Claims are often substantial, as each turbine can cost tens of millions of dollars and an offshore substation can cost several hundred million dollars, and in addition there may be significant production losses.
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Offshore wind collisions often raise many of the same legal issues as traditional ship collisions. However, the offshore wind element adds legal complexity. A key question is whether floating wind turbines are "vessels" or "ships" for example for the purpose of the rules on liability and global limitation of liability. This is unresolved under international conventions and the answer varies depending on the applicable national law, which means that the choice of law and jurisdiction may be of paramount importance.
Cargo vessel collides with wind farm
The classic scenario, of which there are already many examples, is where a cargo vessel collides with an offshore wind farm, for example as a result of navigational error or drifting due to main engine breakdown.
Whether the 1910 Collision Convention governs liability, will depend on whether turbines are considered as vessels for the purpose of the Convention, since it only applies to collisions between vessels. The term is not defined under the Convention and the position under national law varies. If the Convention applies, liability for the collision requires fault. If not, strict liability may be imposed under national law, for example where the collision is caused by technical failure.
A shipowner can usually limit liability pursuant to the rules on global limitation of liability, where all liability arising from an incident is limited to a certain amount, typically calculated based on the vessel's gross tonnage, for example under the 1976 Convention on Limitation of Liability for Maritime Claims, as amended by the 1996 Protocol (LLMC 1996). If several turbines are damaged, there may be a question whether there are several incidents for limitation purposes and therefore several limitation amounts.
In case a wind turbine needs to be replaced, there may be a question whether the shipowner is entitled to limit liability for the removal costs pursuant to the limitation of liability limit for property claims or whether the claim is subject to unlimited liability or some other limit.
Service vessel collides during operations
Another scenario is where the colliding vessel already operates on the offshore wind farm, for example an installation, accommodation support or personnel transfer vessel.
In this scenario a contract will often be in place between the shipowner and the turbine owner on knock-for-knock terms, typically on standard forms such as SUPPLYTIME, ASVTIME and WINDTIME. The knock-for-knock liability regime entails that each party assumes responsibility for loss and damage to its own personnel and equipment regardless of fault. In offshore wind contracts there may, however, often be carve-outs for certain types of faults or for certain parties, which means that the exact wording must be reviewed carefully.
Furthermore, any liability may be subject to contractual limitation of liability as well as global limitation of liability.
Turbine mooring failure causes collision with rig
For wind turbines located close to oil and gas drilling rigs, for example on fields where the rigs are electrified, a conceivable scenario is that the turbine moorings break during adverse weather and that the turbine drifts and collides with a nearby rig.
If there is a contractual relationship between the turbine owner and the rig owner, liability will typically be regulated by a knock-for-knock regime.
Where there is no contractual regime applicable between the parties, the question is whether liability is governed by the Collision Convention, which depends on whether the wind turbine is considered to be a vessel for the purpose of the Convention.
Whether the turbine owner has the right to limit any liability pursuant to the global limitation of liability rules, depends on whether the turbine owner is considered as the owner, charterer, manager or operator of a ship for the purpose of the global limitation of liability rules.
Wind turbine under towage
Another practical collision scenario is where a wind turbine under towage – for example in connection with installation, maintenance or decommissioning – collides with a vessel.
If the shipowner claims against the turbine owner, there is a question whether the Collision Convention applies and whether the turbine owner is vicariously liable for any faults on the part of the tug, which depends on whether the turbine is a vessel for the purpose of the collision rules. Whether the turbine owner is entitled to limit any liability depends on whether the turbine is a ship for the purpose of the global limitation of liability rules.
If the shipowner claims against the tug, the lack of physical contact between the tug and the vessel also raises the question whether the Collision Convention applies. When it comes to the tug owner's right to limit liability there is a question whether the limitation amount shall be based on the tonnage of the tug or the combined tonnage of the tug and tow – the so-called flotilla problem.
Assuming that the towage contract is based on the TOWHIRE or TOWCON forms, the knock-for-knock regime means that the tug owner may seek recourse from the hirer (turbine owner) since the hirer (turbine owner) is responsible for third-party claims for contact or obstruction by the tow.
If the scenario is that it is not the turbine – but the tug – which collides with the vessel, the knock-for-knock regime provides that the tug owner shall indemnify the turbine owner for third-party claims for contact or obstruction by the tug.
Conclusion
Collisions involving offshore wind farms raise complex and unsettled legal issues. Taking early legal advice and adopting the right strategy for the handling of the claim can make a big difference for the ultimate financial outcome.