As the operator of a tourist submersible designed to dive 4,000 meters below the sea's surface, OceanGate asked its customers to sign liability waivers before stepping inside the 21-foot vessel — paperwork that outlined their risks in stark terms, including the possibility of death, emotional trauma or physical injury.
That waiver could play a critical role in whether the families of the passengers who died last week on an expedition to explore the wreckage of the Titanic have legal grounds to sue OceanGate, according to legal experts.
The company's liability waiver was highlighted by CBS News correspondent David Pogue, who traveled on the sub last year and who noted that the document alludes to the risk of death at least three times as well as to other dangers. The waiver also described the vessel itself, which highlights some of the issues with the sub that experts had warned about in the years prior to its doomed voyage.
"This operation will be conducted inside an experimental submersible vessel that has not been approved or certified by any regulatory body, and may be constructed of materials that have not been widely used in human-occupied submersibles," the waiver stated.
Passengers also waived the right to take action for "personal injury, property damage or any other loss" that they experienced on the trip, according to The Associated Press.
Such waivers are common for recreational activities that carry risks, such as scuba diving or sky diving. Generally, these legal documents shield the company's owner of liability if their customers accept the risks and dangers related to the activity and are subsequently injured.
The families and representatives of two of the passengers on the Titan — British businessman Hamish Harding and French explorer Paul-Henri Nargeolet — didn't immediately return requests for comment. OceanGate's CEO, Stockton Rush, was also on the vessel. The company declined to comment.
The family of Pakistani businessman Shahzada Dawood and his teenage son Suleman, both of whom were passengers on the Titan, responded by noting they are "profoundly grateful to those from all over the world who have stood by us during our time of need, and would especially like to thank each and everyone who was directly involved in the extraordinary rescue efforts last week."
Complicating the question of liability is that the incident occurred in international waters, noted Craig Goldenfarb, founder of law firm Goldlaw and an attorney who practices maritime and admiralty law. As a result, a section of OceanGate's waiver known as the "choice of law" provision becomes especially important, he noted.
"The choice of law provision gives jurisdiction to a country in case any litigation ensues from the contract," Goldenfarb said.
The waiver reviewed by the AP found that any disputes would be governed by the laws of the Bahamas, where OceanGate is registered. The Bahamas, whose legal system is based on English Common Law, is considered a business-friendly jurisdiction, but whether the families have grounds to sue may depend on its laws governing liability waivers.
It's important to note that waivers in general aren't ironclad, Goldenfarb noted. For instance, if the waiver is signed by someone who can't understand the waiver due to a disability or other issue, such as a language gap, and then who is injured, their families may be able to sue because the victim wasn't properly informed of the risk.
Waivers can also be rejected by judges if there is evidence of gross negligence, attorneys noted.
"You can waive liability standard for negligence but not gross negligence," said Patrick Luff, founding partner of Luff Law Firm and a former law school professor. "Gross negligence will vary, but it's generally something like, 'acting despite your knowledge of extreme risk'."
The OceanGate waiver's terms that outlined the risks of diving in the sub showed that the passengers had been informed, meaning that their families wouldn't be able to sue simply because the vessel was an "experimental submersible" or hadn't been certified by an industry group, some legal experts said.
"If that information had been hidden, then of course that would be actionable," noted John Uustal, founding partner of Kelley | Uustal Trial Attorneys, in an email to CBS MoneyWatch. "It seems to me this kind of verification of informed consent is entirely appropriate, and in general they are legally valid."
The section of the legal document that waived the passengers' right to take action for injury or loss could also "insulate the company from any responsibility for its own misconduct, even when egregious," Uustal noted.
Even so, Uustal said he would advise the passengers' families to closely review the waiver for issues that weren't covered or disclosed.
"I would suggest looking closely at the exact language of any release terms and see if there is any misconduct that was not covered," he said. "That may provide grounds for a lawsuit, if indeed there was such misconduct."
But as the investigation into the Titan's failure emerges, with a deep-sea robot searching this weekend for debris from the sub, additional legal issues could come to light as more is learned about how and why the vessel imploded, Goldenfarb said.
"If one of the component parts failed, then you would be suing the manufacturer of a component part instead of suing OceanGate," Goldenfarb said. "There may be areas of liability that nobody is aware of yet."
—With reporting by Irina Ivanova and The Associated Press.