Paul and Rachel Chandler are undoubtedly trying to rebuild their lives after 13 months in captivity at the hands of Somalian pirates. Meanwhile, piracy itself is thriving and in that same region has reached new levels with 150 vessels hijacked in the past two years and about 500 hostages being held.
It is a brutish and unlawful business. And many miles from the ordered, clean and, of course, lawful world of the City lawyers. Yet a handful of commercial law firms are closely involved with what is a growth area.
It was Holman Fenwick Willan (HFW) that negotiated the release of the Chandlers and that now has a track record of handling hijackings, along with other shipping firms such as Clyde & Co and Ince & Co. HFW has acted for about 70 hijack cases.
Richard Neylon, the lawyer who acted for the British couple, says: “The situation is worsening day by day. The numbers of crew and vessels captured is increasing, the size of ransom is increasing and the length of time of capture is increasing.” Nowhere in the Indian Ocean is safe, he says.
Until recently, Neylon has declined to speak to the media and even now is circumspect. When negotiations over the Chandlers were at their height, he obtained a superinjunction to stop all media reports. The reason, he explains, was to protect their lives and the negotiating process. The pirates use the media to put pressure on shipping companies and publicity can fuel their expectations of what ransom to expect. “So we prefer to keep anything to do with our clients out of the news.”
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Also off limits is exactly what law firms do in negotiating a ship’s release. But we do know that they deal through a number of intermediaries. On HFW’s website, for instance, it says: “Through our work responding to piracy and terrorism incidents, we have developed relationships with national governments, law enforcement, the military, private military companies, crisis management companies, financial institutions and intelligence agencies. Input from all these sectors is often required to successfully and promptly respond to an incident.”
These are murky waters. Legally, paying a ransom breaks no law: the Court of Appeal confirmed in a case in January that there was “no legislation against the payment of ransoms” and was therefore not illegal. Nor was it a bribe. Morally, some people take a different view. Neylon argues, however, that the shipowners’ options are limited: they can refuse to negotiate, which means the loss of a ship; negotiate but refuse to pay a ransom and perhaps send a priest or imam, which is “unlikely to work”; rely on military intervention, but that carries a risk of death and damage to the vessel; or pay private military companies.
Captives are now sometimes held for up to six months and can involve a crew of 20 to 25 people held in a small room in horrific conditions. “Time has no meaning,” Neylon says. “It is not uncommon for all crew and as many or more pirates guarding them to be using one lavatory.”
Captives are being treated more harshly and there is more chance of private individuals, such as the Chandlers, being caught. A Danish family including three children aged 12 to 16 are presently being held. Ransom demands are also rising: for the Danish family it is $5 million (£3.1 million) and last November a ransom of a record $9.5 million was reportedly paid for the Samho Dream, a South Korean oil tanker.
Although governments often decline to be involved with payments, private ship owners have little option: “Would you be willing to refuse to pay, if your child was held hostage?” Neylon asks.
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The lawyers will deal with the marine insurance side including legalities, from who hired the vessel, securing and paying a ransom, to the aftermath of a ship’s release; damage — from its engines to kitchens, from the accommodation to systems such as air conditioning; and, of course, cargo loss. There is also a crew’s medical needs and repatriation.
The firm has drawn up a list of precautionary steps for vessels. As for other deterrents, captured pirates can be put on trial (Kenya or the Seychelles) but there is a backlog, so their capture does not necessarily help. There are 820 Somali pirates either serving sentences or awaiting trial.
William Hague, the Foreign Secretary, recently pledged an extra £6 million to fighting piracy in the Indian Ocean. That will be welcome but it is small change compared with the yearly £7.6 billion cost of piracy to the global economy.
Neylon welcomes the recent pledge for extra funds but a “greater international effort was required” and the maritime industry would therefore be seeking to persuade other nations to increase their contributions.
But in the end, he says, the problem comes down to one of trying to prevent an industry that provides an income for hundreds of impoverished people who simply have no other means of making money to survive.