Summary: GAO views were presented on a bill to amend the Panama Canal Act so that claims for vessels damaged outside the Panama Canal locks could be resolved in the same manner as those damaged inside the locks. GAO believes that the bill is legally and administratively sound and, therefore, recommends its passage. The bill would change the way in which the United States settles vessel damage claims for injuries occurring outside the locks and the method by which the United States would consent to suits against the Panama Canal Commission. The bill would amend the act so that damage claims exceeding $120,000 would be resolved in the same manner as lesser claims. The bill would not change the source of funds for paying claims, but it would give the Commission, rather than Congress, the authority to settle the damage claims. Congress has amended other legislation so as to remove itself from the job of settling claims in analogous situations. By allowing claimants to bring action in a district court the bill would put outside-the-locks claimants in the same position as persons claiming damages inside the locks and return the right to bring suit on the claims to what it was prior to the passage of the act. The cost of judgments in these claims cases would be paid with funds appropriated from toll revenues. Neither the judgment fund nor the general fund of the Treasury would be available to pay vessel damage judgments without further legislation. In addition, the bill would authorize the Commission to purchase insurance to cover excessive amounts that it might be liable to pay on claims arising from catastrophic marine accidents which would be consistent with the congressional intent for the Commission to be self-sufficient.
