Shipping is a highly specialised area of law, and also one of the oldest. Although it is client-facing and offers variety, if you decide to enter the world of shipping law be prepared for a practice area that is very much ‘black letter’ in nature.
As you would expect it covers everything to do with life on the ocean wave, but most shipping lawyers fall into either the ‘wet’ or ‘dry’ category, explains Nick Austin, partner in the marine and international trade department at Clyde & Co.
“Wet shipping lawyers advise on accidents at sea including collisions between vessels, the salvage of vessels in distress and the sinking of ships,” Austin says. “Dry shipping lawyers, meanwhile, deal with contractual and commercial matters arising out of the carriage of goods on a vessel – for example, delay in transit, damage to goods on board or unpaid sums by the charterer for the use of a ship.”
This area of law is detailed and vibrant, Austin continues.
“It’s a technical area and as such it’s important to have technical legal skills,” he says.
It also involves lots of genuine law (as opposed to, say, corporate, where textbooks go out the window).
“Those looking to go into shipping law must have a healthy respect for – and like of – the law,” adds Austin.
What is life in the practice area like?
One of the defining features of shipping law is its international nature. That is reflected in an average working day that might involve advising American, Asian, European and Middle Eastern clients.
“You’re dealing with people from all sorts of countries so it involves lots of travelling around the world,” explains Austin.
Firms with large shipping departments often offer shipping-focused secondments to trainees: the global shipping hubs of Hong Kong, Singapore and Athens’ port district Piraeus are common destinations.
Work for a lawyer might involve “attending the scene of a shipping collision, taking statements from crew or assessing the condition of ships”, according to Austin.
“Most of the client base will come from overseas,” he adds. “We have a lot of dealings with ship owners, the most prominent of whom are based in Greece, Japan and Norway.”
“Shipping lawyers are likely to spend a lot of time corresponding with marine insurers, most of whom are in London. Insurance and shipping are intertwined – firms that are strong in one area are usually strong in the other too.
“On any given day you might deal with a variety of tasks. A typical day involves handling 10 to 15 cases at any one time. The area also involves lots of client contact and correspondence with opposing lawyers.”
Reed Smith shipping partner Jeb Clulow agrees.
“With shipping law there’s never a dull day,” he says, “whether it’s interviewing survivors of a shipwreck or dealing with the attachment of $1bn worth of assets in China.”
There are lots of opportunities to develop relationships with clients.
“Many of our clients are protection and indemnity clubs, or charterers and traders who we work with on multiple matters at any one time,” Clulow says. “There are great opportunities to develop longstanding relationships,”
“You need to be practical and have a good sense of humour”
Another feature of English shipping law is that not only does it call on other areas of legal practice but it is also relied upon around the world. London and London-headquartered law firms are centre stage in this world.
“Shipping law is primarily based on the law of contract, with elements of tort and international law,” explains Clulow. “Much English commercial law is based on shipping cases and most of the disputed commerce a commercial team comes into contact with has been transported by ship.
“London has become the major hub for shipping law.”
What skills are needed?
Due to its global nature, lawyers in shipping must be ultra-responsive.
“It is a 24/7 industry,” says Austin. “Incidents can occur in different time zones at any moment so you must be responsive and flexible in serving clients. It’s certainly not a 9-to-5 environment.”
Indeed, one way of telling how important shipping is to see if its homepage has a button marked ‘EMERGENCIES’ or ‘CRISIS RESPONSE’. If it does, it is likely that marine businesses are a key part of the client base.
“Fundamentally, lawyers in this field need a commercial approach “as you need to understand what the client’s underlying problems are, together with their commercial thinking,” explains Austin.
Clulow adds: “Shipping problems can also involve multiple parties and multiple contracts, often with different terms, and being able to look at a dispute from a wide angle is important.”
At the same time shipping lawyers must be down-to-earth and able to get on with clients and opponents of all nationalities.
“You need to be practical and have a good sense of humour,” Clulow says.
Some of the skills required of a trainee in shipping include attention to detail and strong writing, as well as enthusiasm and the ability to grasp complex concepts quickly.
“Shipping trainees are often encouraged to develop their industry-specific knowledge so they can provide tailored and commercial solutions as well as legal advice to clients,” adds Clulow.
What’s happening in the field?
For a sector that relies so heavily on trade and commerce the economic downturn has naturally had a big impact. However, it is coming out of the slump and, with international trade increasing, shipping lawyers will be called into action with increasing frequency.
The most pressing issue for the sector is declining freight rates – the price at which cargo is delivered from one point to another. Since the recession rates have been at rock bottom, due in part to the slowdown in China and an oversupply of ships.
“Rates have been on a rollercoaster for 10 years, with daily hire rates for vessels going from $20,000 to $200,000 and then down to $5,000,” explains Clulow.
As a result of declining rates some shipping routes have become unprofitable. The trend has also given rise to numerous and varied disputes concerning non-fulfilment or breach of contract.
“Since the end of 2015 there’s been a big rise in the number of shipbuilding disputes as a result of falling freight rates,” says Clulow. “Many buyers are attempting to get out of contracts for the purchase of new ships as there are too many ships for too little demand.”
The sharp decline in freight rates has been felt most heavily in China, the world’s biggest shipbuilder. The economic slowdown hitting the emerging superpower, along with a declining appetite for Chinese goods, has affected shipbuilders, port owners and shipping lines. This has had a knock-on effect on the shipping industry as a whole.
Another big issue in the sector is the rise of piracy in the past decade, which has given rise to a series of new shipping law issues.
“Of particular concern are the insurance implications for ships transiting waters where piracy takes place, and whether a charterer still needs to pay for the use of a ship that has been seized,” says Austin. “Shipping law is now required to respond to these issues and, at the same time, is tasked with minimising the risk of such incidents occurring in the first place.”
The trainee’s role
A shipping law seat is often popular with trainees as it is seen as interesting and varied, with the scope to work internationally.
“Every day is different,” says Reed Smith trainee Lucy Winnington-Ingram. “Much of the work the shipping group handles at my firm is primarily based around arbitration. During my seat I’ve attended five hearings at the Commercial Court for disputes ranging from antisuit injunctions to declaratory relief for a multimillion-dollar international shipbuilding dispute.”
“Shipping law provides the opportunity to get involved in transactional work too, and it’s a fantastic contract seat”
Lucy Winnington-Ingram, trainee
In the course of Winnington-Ingram’s seat she has drafted claim submissions, witness statements and court applications, as welI as managing the day-to-day running of some smaller matters under supervision.
“I’ve also had the chance to instruct foreign lawyers as well as English counsel and experts,” she adds. “Working in shipping law provides the opportunity to get involved in transactional work too, and it’s a fantastic contract seat.”
Which firms cover shipping law?
Due to its specialised nature you will not have as many firms to choose from as in, say, employment. Still, there is a relatively a good range. At the top of the pile there are a couple of large global firms with a strong shipping focus: Clyde & Co and Ince & Co.
Then there are firms, just as large, where shipping is a big and respected practice but not as central to the firm’s identity. Norton Rose Fulbright and Reed Smith are two.
After that come a number of smaller firms, ranging from fairly substantial mid-sizers to boutiques, which place the emphasis on shipping to the extent that they can compete with the big firms. Hill Dickinson, Holman Fenwick Willan, Stephenson Harwood and Thomas Cooper and are some of the most prominent.
Outside London you will also find shipping law being practised by regional firms in coastal locations, such as Newcastle’s Mills & Co, Hull’s Andrew Jackson and Plymouth’s Davies Johnson & Co.