I think if you will look with your staff at the figures of Bureau of Labor statistics of the Bureau of Labor, you will find out that the socalled gear defects or these defects of the ship itself, the accidents, they have to be-I think Jack Jones from the PMA told me they run 2, 3, to 4 percent. You look at your actual statistics as to what the cost of injury is and you will find out well over 90 percent has to be and is attributable to the actions of the men and/or the people I represent, the stevedore.

You see, when you impose this broad expanse, this humanitarian doctrine sort of liability on a ship for being unseaworthy to which it had no particular control, these people come on and do this, then when you pass it back around to the stevedore under this doctrine of indemnity, why, you kind of have gotten away from the traditional notions we all had in mind by seaworthiness which you ordinarily would have in the commissions' cases or in the limitation of liability, either type of

cases.

Now, you can ask whether or not this problem that they have all been telling you about is a real one. Well, the statistics are hard to come by. Scanlon in Philadelphia gave you some statistics. What I have tried to do here locally in my statement is to run my own personal survey to be of help to you. What I did is get in touch with each of the four firms that do stevedoring work in the Oregon area. I have done it for the last 3 fiscal years. And you will see set forth in my statement the number of compensable claims they have had, the number of ones that involve more than a thousand dollars of compensation. You will see the number of third-party actions that have resulted. Even in a relatively small port like this as compared to the big, large metropolitan ones the figures are rather amazing, so that in cases where you have more than a thousand dollars of compensation involved you will see for fiscal year 1965, seventy-nine point something resulted in third-party action. In other words, four out of five of those were lawsuits. For 1966 I think that figure drops to about fifty something, or at least one out of two. The figures from 1967 aren't in yet. The ones I gave you are through November and they are at some 40 percent now and the operators tell me that, of course, there are 2 years in this State to file a lawsuit but that will go up considerably. But it is a real live problem here.

Now, I don't think anyone yet has really talked about, and perhaps a couple of minutes would be worth your while to, I think, what we call sort of the third-party gain, what really happens in these lawsuits, and from that you can kind of see the economic wastefullness and why the stevedores feel that really what happens here is that they are just being asked to finance lawsuits against themselves and that a total layer of unnecessary expense is being put on the industry. The accident occurs. Our office does this kind of work that other attorneys that are in this room or can be brought here will verify everything I am telling you. Usually in our court the union attorneys will be down there first. They are first class, they are competent men and make a good investigation of it. At about the same time or a little bit afterward the attorneys for the vessel will be there. The ones that are there for the vessel P. and I. carrier, they will try to make the same investigation but they are somewhat limited because they won't be able to talk to the longshoremen involved or to, in effect, the working side of this thing.

About the same time, I do this type of work, my office does, for the stevedores, we go down there. We try to find out what happened. Well, I can assure you that after three sets of folks get there the tracks are rather well worn.

The stevedores' main concern, and as charged by this act, is to see to it that the man gets the best possible medical care, is looked after and put under compensation. We do that. That is started immediately and I think the unions will confirm that we have tried as best as possible to have a panel of doctors and to have hospital facilities, et cetera, that will give them first-class care. So that starts underway and the man is taken care of, and then ordinarily there is quite a time behind us during which the man is paid compensation, received medical care, and not much of anything goes on. Then about the time the man is about ready to go back to work, bang, comes the third-party lawsuit, which goes against the vessel. The vessel and the longshore attorneys at this point then engage in some discovery proceedings. The stevedore is not part of this. He tries to find out what is happening, it is sort of in his self-interest to. Sometimes he does and sometimes he doesn't. You will have to appreciate the practicality of this, and I think Senator Morse will see it in perhaps a lawyer sense.

The ship's attorney's real job, aside from worrying about trying to keep his vessel from being stuck, which in most instances he knows is going to happen, he is going to try to pass off whatever is involved. onto the stevedore, so that he has kind of always kind of got an eye toward where it is going to go. He has in mind whatever he does when he passes it off to the stevedore that his attorney's fees are also going to go along with the package. Then when the discovery is finished, then comes the tender by the ship to the stevedore company, please take over our lawsuit. All right, that tender is either accepted or rejected. If it is accepted it means the stevedore at that point steps into the shoes of the ship, and, in effect, depends and stands subject to the third-part suit, which either settles on the best terms he can or he goes ahead and tries, get the judgment, but it is his responsibility. On the other hand, if he rejects the tender, why the ship goes in and either gets a judgment against it or settles the case and thence comes the indemnity lawsuit against the stevedore, with it goes not only what was paid the man but also what the ship's defense costs were and ship's attorney fees. That is part of the package.

Now, it is for this reason that you will see the employers here feel that the Compensation Act is being used as a means of financing lawsuits against themselves. They think it is basically unfair that they are, in effect, having to support and nurture, maintain the man, which, don't misunderstand me, that is their obligation, they are doing it, but they really don't like to do it just to turn around and end up the recipient of this lawsuit.

From your point of view, gentlemen, I think the real consideration is to wonder whether or not this whole thing is worth it, or, as I try to say in my statement to you, who really wins one of these third-party lawsuits. I will try to give as much as I can on it. Certainly the members in my profession are the real winners, you can't dispute that. There is a lot of litigation here, the attorney's fees, the fellows from the complainant's, the contingent fees, they do a good job, and that is part of it. The ship's attorneys that defend the ship, they are going to charge accord

ingly. We representing the stevedore think our services are worthy of the money we charge. So there are, in fact, these three sets of attorney fees. So at least to that economic interest we are the winners. Now, to the man, on the man I tell you this is one I just really can't tell you who wins on third-party cases with respect to the man. You are going to hear lots of examples both ways. My answer to you is, it all depends. Certainly there are cases set forth in the industry white paper. You will get more examples where the man gets out less than he would have under compensation. On the other hand, I know from my own experience there are lots of cases where the man is going to net out certainly more than he would under compensation. It really depends, and it is so hard to make one of these valued judgments unless you take a particular one involved. But I would say the way I come at this thing is the total cost for the process involved is so much more than the benefit that is spread across all the men. I really wonder whether the game is worth it. That is really the position of the industry to you, that they feel that you can distribute these dollars far more effectively so that by curtailing or limiting the third-party actions you can more directly benefit the general average, the general run of longshoremen that are injured.

Now, in so doing, I absolutely recognize that a given longshoreman may not be able to get a spectacular recovery. I know this, this is certainly true, but I have asked you to temper your judgment in that respect with a notion that the stevedore firms are caught in this part of the line. They are not only paying compensation, but then they are having to pay the judgment, and really these men have kind of two bites of the apple. It is going to be up to you to think whether or not this is the system you want to keep perpetuating in this particular industry.

Now, finally we think there is a way out of it. We don't claim any magic for our legislative drafting here. The essential concept we have, and this is one that is certainly present in Oregon, is from our point of view, I really think it is a legal technicality when you call a vessel a third party insofar as a stevedore or a longshoreman is concerned. It seems to me that the very nature of the longshoreman's job, he is required to work on a vessel. The real relationship that needs to be insulated, that compensation is supposed to protect, is the work relationship between the stevedore and ship. This is what needs to be protected by compensation. Our thought is the way you come at this thing is you then make the vessel part as, in effect, a statutory employer. That limits this whole-it doesn't take away the third-party cases insofar as strangers to this relationship are concerned, but it would curtail and limit the right of the longshoremen to sue the ship.

You have, Senator Morse will tell you, the same thing in our State compensation act here. In other words, when you have two cover employers and you have a commingling of employees with what you might call joint supervision control, the employee, employer A doesn't have the right to sue employer B as a third party. Their view, in effectthe statute, in effect-prevents such lawsuits between employers who really are intertwined, and it makes pretty good sense. That is the basis for it.

One other thing that we point out to you, it is of some interest as U.S. Senators that the Supreme Court and the Government have taken quite a different attitude on these third-party actions when it comes

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down to the Government itself. They are set forth in my statement, the cases and the holdings of the U.S. Supreme Court, which have very much severely curtailed and restricted the right to bring third-party action under the Federal Employees Compensation Act, so that, for instance, Senator Yarborough, although under the law today if a private longshoreman gets hurt aboard American Mail Line's `vessel, for instance, he is able to sue his employer under the applicable decision. The Government says if you have a Government maritime worker who is hurt aboard a Government vessel he doesn't have the right to bring the similar third-party action.

Senator YARBOROUGH. Is that the Demko case?

Mr. LINDSAY. That is the Aho case.

Senator YARBOROUGH. Yes; I see it.

Mr. LINDSAY. I think that tries to pick up or put together, perhaps not too articulately, but the consensus that we would like to give you with respect to this. There is more specifics in the statement. I would be happy, if I could, to try to answer some questions or any further memorandums we would certainly like to be able to submit them to you.

Senator YARBOROUGH. Thank you for that brief summary of this brief. I agree your summary is very much better than reading. You followed it some, but yet you have covered every essential point.

Senator MORSE. I think those cases in your section on judicial condemnation which deal with the lower courts will require a great deal of consideration by this committee as to how you have developed the legal theories in variance to those lower court decision through the Supreme Court. Would you take us through once more the difference between the Supreme Court decisions in regard to this line of cases and the Supreme Court decisions in regard to the duplications you talked about where you are dealing with alleged governmental liability?

Mr. LINDSAY. I really can't explain those to you. In one statute, in your Longshore Act you have the statement in section 5 that if a man, if the employer puts up his compensation and pays his medical care, that is his exclusive liability. You have similar identical language in the Federal Employees Liability Compensation Act, that that is to be the exclusive liability. In one act they open the hole and let you go around it. In the Federal Employees Compensation Act they don't. I just can't explain it to you. I don't know the basis for it. I am sure that people that have lived in this world can do it more articulately than I can. I have to deal with results. It is an anomalous situation and I don't know how to explain it.

I am glad you mentioned that point of judicial condemnation. It is probably out of, I don't know how you say this to a Senate committee, but were the committee, an executive or other session, to perhaps send a friendly letter to two or three of these judges, for instance, Judge Brown or Judge Friendly, or others, I have reason to believe by reason of attending judicial conferences of the circuit courts and having spent time talking to these judges, and I recognize it is a separation of powers and the like, they would like nothing better than to talk to a committee of Congress to perhaps give you their views of really, kind of word games that have been devised to rationalize a very humanitarian result. Don't misunderstand me on the results. The results are all in the interest of the men, but the rationale by which it has gotten there is another

matter. You will see set forth in my statement some rather pungent comments on it that this is perhaps, what is the famous word, judicial legislation.

Senator YARBOROUGH. I noticed that quotation that you had from Judge Brown was in the dissenting opinion of the case, wasn't it?

Mr. LINDSAY. Yes; it was. They are following-you do have to appreciate the Supreme Court makes the rules and the circuit courts have to read the cases and go along. Judge Brown coined that tremendous phrase that ought to be printed in this record all through that. He typifies this whole third-party business as a three-cornered Killkenny fair in which all lash out at each other. That is the truest sort of description I have ever heard.

Senator YARBOROUGH. Do you know Justice Brown?

Mr. LINDSAY. Yes; he has been up in the Northwest.

Senator YARBOROUGH. He was an able lawyer, as you know, before he went on the bench and he has a flair for words. He has created many expressions like this. A brilliant lawyer.

Mr. LINDSAY. I might add one other thing. This seems to suggest more work for you folks, but, again, in your executive session were you to perhaps consult seriously some of the field deputy commissioners with respect to what third-party actions are doing to the Longshore Act, I think you would hear some answers, which I have heard myself, which would be very interesting to you. I don't have the slightest doubt that they will be not in agreement with what I would call the official Department of Labor line because I don't have any doubt that the Department of Labor on the top level is going to have to come out, from where I sit, in favor of third-party actions.

Senator MORSE. Mr. Chairman, I noticed in Mr. Lindsay's comments in his statement-I have only scanned it, I will study it very carefully he suggested in our preparation of the material for our consideration in the executive session we give some thought to getting information from the deputy commissioners in regard to their experiences in the work they perform, and I would like to suggest that counsel for the committee call the attention of the deputy commissioners, by written memorandum, to this part of Mr. Lindsay's testimony, quote it and say we would welcome any memorandum

Mr. LINDSAY. I think I have done an unfair thing to decent people because obviously they are not going to be in a position to take a different point of view than one that comes from the home office.

Senator MORSE. Strike that suggestion.

I suggest that counsel communicate with them as we do very frequently in gathering information for the committee. Counsel, communicate with them and then brief us on any information they can get together. It certainly wouldn't be appropriate as members of the committee to conduct what would amount to an executive hearing with them. I don't propose that; I don't think it would be proper. But here is a witness that says he thinks that there might be some information that they might give to counsel of the committee, and we can evaluate it for what we think it is worth.

Mr. LINDSAY. It is a tribute to them. It shows the stevedore employers are at the paying end of this compensation. These men have earned the full faith and credit of us and we are completely willing for them off the record to tell you whatever has come up.