All countries party to the 1974 SOLAS Convention are now bound by the ISM Code. Indeed, the United Kingdom has already incorporated the Code into its domestic legislation by means of The Merchant Shipping (International Safety Management) (ISM) Code) Regulations 1998. As for its effect on English law, although we will have to await the decisions of cases brought in the High Court, or by way of arbitration (if published), before we know its true effect, it is possible to speculate now on some of the areas where it may have an impact.

Undoubtedly, some aspects of the Hague or Hague Visby Rules will be affected. These Rules, when applicable to a Bill of Lading (or charterparty), govern the relationship between the shipowner and cargo interests for the particular goods carried by sea, setting out certain responsibilities, liabilities, rights and immunities. Article III rule 1 puts an obligation on the shipowner to "exercise due diligence to (a) make the ship seaworthy (b) properly man, equip and supply the ship (c) make the holds.....in which the goods are carried, fit and safe for their....carriage". This is qualified by Article IV rule 1 which says that if the shipowner has complied with the obligations of Article III, notwithstanding that the goods carried on the ship become lost or damaged, he shall not be liable for that loss or damage in certain specified instances.

Further, Article III rule 2 puts an obligation on the shipowner to "properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried". However, if the goods are damaged, Article IV rule 2 sets out a list of 17 exceptions when the shipowner will be acquitted of liability. Examples are when damage or loss resulted from (a) default or neglect of the master or crew in the navigation or management of the ship: (b) fire, unless caused by the actual fault or knowledge of the owner: (q) any other cause arising without the actual fault or knowledge of the carrier.

Whilst primarily about safety, the scope of the ISM Code is such that it inevitably must have an effect on what constitutes seaworthiness and due diligence. The Code requires each shipowner to implement a Safety Management System both on ship and ashore. Safety matters cover items such as properly trained crew, good communication on board and safe practices in ship operation. It follows that if the System is deficient or these matters are not complied with, the shipowner is open to a strong accusation that he has not exercised due diligence to ensure the ship is seaworthy or an accusation that he has not properly cared for the cargo which may result in him being unable to rely on the immunities offered by the Rules.

Moreover, since the Code has specified that each company must appoint a person on shore (the "designated person") whose job it is to monitor the System and make sure that the highest level of management are kept informed of any non-conformities, accidents and hazardous situations , it will be far more difficult now, if cargo damage results as a failure of one of the procedures, for a shipowner to gain immunity by saying that he had no knowledge of improper practices on board the vessel and it will be more difficult to prove that a cause of damage occurred without his actual knowledge.

Furthermore, since the Code requires that the Safety Management System is contained within a Safety Management Manual and that all paperwork, whether implementing procedures, recording any non-conformities with the Code or relating how they were dealt with, is added to the Manual, greater documentary evidence as to the management of the ship will exist. Matters litigated under English law and jurisdiction are subject to a strict obligation that both sides disclose all relevant documents in their possession, good or ill. Clearly the Manual will be such a relevant document. If the Manual itself is not up to scratch, inferences may be drawn from that. Moreover, at present, where an incident has become the subject of a dispute, any documentation which has come into existence for the purpose of litigation or for obtaining legal advice in relation to this dispute, has always been privileged and, therefore, not disclosable to the other side. However, the Code requires that an investigation will be made of any incident or non-conformity and recorded in the Safety Manual. Since the document will come into existence because of the Code, it may not be privileged and may be disclosable to the other side; it will not have come into existence purely for the purposes of obtaining legal advice. For similar reasons, the Code may affect an Assured's cover under marine insurance policies. Section 39(5) of the Marine Insurance Act 1906 provides that the insurer is not liable for any loss attributed to the unseaworthiness of the ship where the ship has been put to sea in an unseaworthy condition with the knowledge of the Assured. As the code has implications on seaworthiness, and since there is a direct line of communication to the shipowner, not only will non compliance with the Code make it easier for the insurer to suggest that the vessel was unseaworthy when she was put to sea, but it will be easier for the insurer to suggest that the Assured was well aware of that unseaworthiness.

Since the 18th Century, for public policy reasons, shipowners have by law had the right to limit the amount in respect of claims made against them. This right to limit liability has been varied by successive Limitation Conventions, of which the latest, to which the United Kingdom is a party, is the 1976 Limitation Convention. Article 4 sets out the conduct which prohibits the right to limit liability. It says "a person liable shall not be entitled to limit his liability if it is proved the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result".

Because of the requirement of the Code that non-conformities on the ship are reported, through the designated person to the highest level of management, it may be easier for a litigant who is trying to break liability to establish that the shipowner was aware of certain non-conformities or omissions. He would still have to establish, though that the shipowner acted or, in failing to act, did so with knowledge that the loss which actually occurred would probably result .That would still be difficult to prove.

Liability may not prove so difficult to break under the 1957 Convention, though, to which many countries are still a party. Here, the shipowner's right to limit is lost if the relevant damage was caused by his actual fault or knowledge i.e. a much lighter test. Since the designated person is bound to pass on to senior management, any problems, knowledge on their part may be far easier to prove, and liability easier to break.

When the first cases start to trickle through, then it will be possible to see the full impact of the Code more clearly. In the meantime, watch this space!