Costa Concordia Disaster

01.27.12

Why Survivors Aren’t Buying Costa Concordia’s Compensation Offer

Living through a horrifying shipwreck? Priceless. Why no one’s taking the $45 million compensation deal from the Costa Concordia’s owner.

How much is a terrifying experience like surviving a shipwreck worth? The Costa Concordia’s owner puts that price at around $14,500.

At least 3,206 of the Costa Concordia’s 4,200 passengers and crew members will be offered a payout of $14,500 (€11,000) for having had to suffer through the chaotic shipwreck and sloppy evacuation off the Tuscan island of Giglio on Jan. 13. The Genoa-based Costa Crociere cruise company, which owns the Concordia and employed its erstwhile captain, Francesco Schettino, announced Friday that it would offer the sum as a final settlement for those who were not injured in the accident.

Since the wreck, Costa says its representatives in more than 60 countries have been in touch with survivors to offer counseling and to register the value of the possessions they lost when the ship went down. In addition to the settlement, Costa will reimburse the cost of the cruise ticket, cover passengers’ flights home, and pay for additional receipted expenses incurred in Italy in the days after the crash. It will also return all passenger items found in the cabins on the ship when the wreckage is recovered.

The settlement would cost the Carnival Cruise Lines subsidiary more than $45 million. It was reached through a hasty negotiation between Costa and the Italian travel-consumer group Astoi Confindustria, along with parties from Spain, France, and Germany to try to stave off individual lawsuits.

Private lawyers are urging survivors not to take the bait. The Italian environmental group Codacons, an umbrella group for a number of agencies, has posted a notice on its website urging survivors to instead join a class-action lawsuit it is coordinating with U.S. and Italian law firms, which could fetch each passenger as much as $165,000. “All those who were on board the ship are entitled to be compensated not only for material damage (cost vacation, personal property lost or damaged, and any physical damage), but also to moral ones, such as fear and terror suffered, and the risks related to physical integrity. It is inadmissible, despite the sophisticated equipment on board such vessels, installed in order to avoid clashes aground, such accidents occur.” Codacons has even posted an interactive form for survivors to fill out to join the class-action suit.

Indeed, almost no one is advising passengers to accept the Costa offer. “Throwing money at survivors to effectively get them out of sight is not what we have in mind,” says Giulia Bongiorno, an attorney who has gathered a group of about 50 survivors for a class-action lawsuit. “These people have no idea what their agonizing experience is worth yet. It could take years to understand the full impact of the experience.”

Bongiorno points out that in Italy, anyone filing a civil complaint in a criminal case then becomes a third party, meaning they would have legal representation in court when Schettino eventually faces trial for manslaughter, abandoning ship, and negligence in causing a shipwreck. At least a dozen passengers from the U.K., U.S., and Italy have already filed personal suits for damages in courts in Miami, where Carnival Cruise Lines is based.

“These people have no idea what their agonizing experience is worth yet. It could take years to understand the full impact of the experience.”

Costa representatives in Italy say that family members of those who perished in the wreck, and passengers who were injured or are in extensive counseling as a result of the accident, will be dealt with on an individual basis. The rest, they hope, will take the offer. “This compensation package is higher than the current indemnification limits provided for in international conventions and laws currently in force,” according to a statement posted on Costa’s website. “The €11,000 lump-sum payment is offered to all Costa Concordia passengers, including nonpaying children, regardless of their age.”

Some passengers, like Michigan resident Kathy Ledke, say they have not been able to sleep since the crash. She does not want to initiate litigation, and has been offered very little by Costa. “Costa called us and offered us counseling, but that’s it at this point,” she says. “We haven’t heard anything else yet.”