Shipping law

Shipping law covers international transactions, disputes and legal problems connected with the movement of goods and commodities around the world by sea. Clients can be shipowners, charterers (ie hirers) of ships, traders and companies who own cargoes being shipped, banks who finance the purchase of ships, and marine insurance companies.

Graduate careers in shipping law

A typical litigation case might involve a ship that has sunk – more common than you might think. The shipowner may have to defend a claim brought against them by the owner of the goods that have been lost, or their insurer. They will instruct a shipping lawyer, who will first review the documentation to decide on the client’s legal position.

The case may eventually go to the High Court in London or to a London maritime arbitration (a common option). The court or arbitration processes in shipping litigation can be lengthy. Most cases would last at least three months but larger cases, such as the MSC Napoli case (involving a container ship that ran aground off the coast of Devon in 2007), can run for many years. Finance-based transaction work is much quicker because deals normally have to be done within a tight time frame.

An interesting feature of shipping disputes is that very few of them – around ten per cent – reach trial at court or a final arbitration hearing. Most will be settled before this as there can be large sums of money involved, as well as commercial interests and reputations at stake, leading clients to decide to settle. Shipping law is a busy area of work because of the sheer volume of goods being shipped around the globe and the scale of international trade. Business for shipping lawyers may actually increase during periods of economic difficulty as buyers and sellers of goods, and owners and charterers of ships, find it harder to stick to the terms of their contracts and may try to renege. Shipping lawyers are needed at this point to handle any disputes that may arise.

A typical finance transaction in shipping might involve a shipowner seeking to borrow money from a bank to purchase a ship. The bank would then take a mortgage over the ship, just as it does when it gives a mortgage to a home buyer. The lawyer will be involved in preparing all the documentation, negotiating with the bank's or shipowner's lawyer and completing the transaction.

Is shipping law recession-proof?

While shipping lawyers tend to remain busy during good times and bad, the global shipping markets are far from recession-proof and tend to operate cyclically. Autumn 2008 saw previously stable shipowners feel the effects of the credit crunch in every part of their business. And some trades approached paralysis with charterers reneging on contracts because demand for commodities had dried up. Shipping lawyers have seen their workload remain busy but with a change of emphasis from non-contentious to contentious work as the industry becomes more litigious in a downturn.

Skills required on the job as a shipping law solicitor

• The ability to manage and analyse documents.
• The ability to network with clients from countries around the world.
• Foreign languages are not essential but can be helpful.
• Good organisational skills.
• Research and analytical skills.

What does a trainee solicitor's job in shipping law involve?

Trainees are likely to work as part of a team and be involved in research tasks. There may be some photocopying involved but it is also likely that they will be able to get involved in an interesting case from the beginning, meet people in the shipping and insurance markets from countries all over the world (think of the archetypal Greek shipowner) and possibly travel overseas to meet clients and attend meetings.

Being able to understand a client's business and the strategies involved will help a trainee in this area get to grips with sometimes complex litigation cases. Long hours and allnighters are rare because of the slower pace of litigation, but they may sometimes crop up in finance-based transaction work. Shipping law will appeal to those who enjoy working with people across the globe on international cases and who like being involved with tangible products and the movement of real commodities around the world by sea.

Types of law practised

• Contract.
• EU.
• Tort.

About the author

NICK AUSTIN is a partner in the marine and international trade group at CLYDE & CO LLP. He graduated from the University of Exeter with a degree in law in 1994.