EXPERTS: When should a yacht be coded for chartering?

Stephanie Pritchett looks at the rules and regulations

What is MCA Coding?

For the past five years, the scheme previously administered by Local Authorities which licensed charter yachts to operate has been phased out and is now almost entirely obsolete. Now, yacht owners wishing to charter their yacht will have to get it 'coded' by the Maritime and Coastguard Agency (MCA).

In short, MCA coding is essentially a set of rules (devised in association with the RYA) which must be adhered to and by which vessels are assessed and restricted accordingly to waters where they can safely operate. Coding is not a matter of choice for yacht owners wishing to charter their yachts; it is mandatory. Indeed, it is illegal for a yacht owner to receive payment or 'commercial gain' (as discussed in more detail below) for the use of a yacht which has not been coded.

This area is widely acknowledged as being somewhat of a 'minefield' as the rules are constantly under review and their interpretation appears to change depending upon which authority is asked to give clarification.

To whom do the coding rules apply?

The coding applies to small vessels used for charter (regardless of the amount of time spent chartering) and to all vessels over 24m in length, which are "vessels in commercial use for sport or pleasure (being pleasure vessels "engaged in trade"). By way of example, this may apply where boats are used commercially by Charter Companies and Sailing Schools, by clubs, associations, schools, universities and also where Privately owned boats are operated or managed by Charter Companies etc.). Although you should note that even if not chartering their vessel, many owners of vessels over 24m still opt for MCA compliance due to the enhanced safety standards this implies and because it significantly improves the resale value of their yacht.

The coding applies to small vessels used for charter (regardless of the amount of time spent chartering) and to all vessels over 24m in length, irrespective of whether they are to be chartered or not. The MCA maintains a database of coded vessels which is displayed on their website. Owners of coded vessels can apply to have their yacht added to the database by emailing ist@mcga.gov.uk and including the vessel name, home port, URN, code area, skipper's name, licensed number of passengers permitted, number of licensed crew, expiry date for the certificate and optional contact details.
A point to note is that there is no exemption for registered charities from having to code a vessel. The Code applies to all commercially operated vessels, and the charity must comply fully with the Code.

Coding is unnecessary where a charter is 'free' (for example, as between friends) but it is important to remember that payment for a charter may be 'in kind' rather than just for money and if so coding will still apply (see below).

What are the Codes of Practice?

There are four Codes of Practice for small vessels (up to 24m) which sail under the British flag, or in British waters. These Codes are enforced by the MCA in conjunction with the Local/ Harbour Authorities in their jurisdiction. They are as follows:

- the (Yellow) Code of Practice for Small Commercial Motor Vessels (note that full implementation of the New Code of Practice for Small Commercial Vessels is anticipated to take place later this year);
- the (Blue) Code of Practice for the Safety of Small Commercial Vessels;
- the (Brown) Code of Practice for the Safety of Small Work Boats and Pilot Boats;
- the (Red) Code of Practice for the Safety of Small Commercial Vessels in Commercial Use operating from a Nominated Departure Point (NDP).

The MCA can advise as to which code(s) may apply to your vessel and copies of these Codes may be obtained from the Stationary Office by calling 0870 600 5522.

In addition to the Codes above, there is also a Code of Practice for the Safety of Large Commercial Sailing and Motor Boats (24m and over). It is worth noting that this particular code has recently been the subject of revision and is due to appear soon in updated format on the MCA website.

The Codes of Practice will not apply to vessels carrying more than 12 passengers as they will be classed as passenger vessels and as such will have to be surveyed by the local MCA Marine Office.

Once obtained, a Code of Practice certificate is valid for five years only or otherwise where specified by the relevant Certifying Authority.

What do the different levels of Coding mean?

The MCA coding rules are divided into seven levels according to the area in which the charter vessel will be allowed to operate. Once assessed the yacht will be given a classification from 0-6 and it will be certified by the MCA.

The categories of MCA coding are as follows:
Category 0: unrestricted service;
Category 1: up to 150 miles from a Safe Haven ( a 'Safe Haven' being a point of refuge like a harbour);
Category 2: up to 60 miles from a Safe Haven;
Category 3: up to 20 miles from a Safe Haven;
Category 4: up to 20 miles from a Safe Haven in favourable weather and daylight;
Category 5: within 20 miles of a NDP in favourable weather and daylight (a 'NDP' being a specified place with embarkation facilities allowing safe access);
Category 6: within 3 miles of a NDP and never more than 3 miles from land in favourable weather and daylight.

In addition to the geographical areas, other aspects considered within the coding classifications are weather conditions, safety features and equipment required and crew qualifications. The certification that a yacht has attained a particular level demonstrates, amongst other things, that the yacht is seaworthy, commercially viable and that the skipper is appropriately qualified.

What are the practical implications for professional yacht skipper?

If undertaking a commercial charter, the code requires the skipper to have commercially endorsed qualifications (including obtaining appropriate VHF Licences, Sea Survival and First Aid/Medical qualifications, Engine Repair courses etc.).

A skipper will also have to be mindful of the limits of the yacht's coding in terms of distance and weather when planning routes and plotting courses. For example, a category 5 yacht must never go beyond 20 miles from a NDP in favourable weather (i.e. conditions which are deemed by the skipper to be safe for a small vessel to operate within the limits applied to it and which will cause no hazard to the safety of the vessel, including handling ability) and in daylight (i.e. one hour before sunrise until one hour after sunset).

What are the practical implications for individuals chartering a yacht for cruising purposes?

As outlined above, in order to be able to offer yacht charter services, a yacht will have to be coded. It is illegal for a yacht owner to offer a yacht for charter to paying passengers if it has not been coded according to MCA requirements. The MCA warns passengers not to charter until this process has been satisfactorily completed. Otherwise the charterer may be taking unnecessary risks as there has been no objective assessment of its safety, suitability or the qualifications of the skipper. It is possible that the yacht may also be uninsured if it is carrying out such services without appropriate coding in place. A prudent charterer will only use yachts which are already certified and would ask to see a yacht's MCA certificate in order to prove that it is authorised to commercially operate and to check the certificate to see what the category of certification is (from 6- 0) and to check what (if any) caveats have been endorsed upon the classification.

Lee Gallagher of the Challenge Sailing Team wrote to us at the Daily Sail Experts Panel and asked whether complete documentation needs to be in place before a yacht owner begins to promote his yacht for charter.

In short, there does not appear to be any measure in place which would prevent a yacht owner promoting his yacht for charter before he had obtained the correct certification, however, the MCA points out that any potential charterer would be unwise to accept this arrangement should there be any problems with the yacht or delay in obtaining the requisite documentation prior to the date of the charter.

For yacht owners who wish to charter, but are unsure of how to proceed with the process of coding, there are several commercial companies who can arrange coding on the owner's behalf. Details of the various companies can be found on the internet.

Are the rules different for chartering racing yachts?

The MCA is due to introduce a new code tightening up procedures in the 'charter for racing' sector of the yacht charter business. The RYA Technical Department will be responsible for certification of such yachts for a small fee.

In the past, the position has been that a chartered racing yacht, if in full compliance with the safety regulations of the race organiser (for example, the ISAF Regulations) then the yacht would be exempt from MCA certification. However, it was found that there were occasions when yachts had been chartered claiming the racing exemption, when the 'race' was being used merely as a device to escape coding.

The Code is an evolving instrument and as such, has been subject to recent revision. Once the new code is implemented in the UK, any yacht chartered for seagoing racing which is not currently certified will have to be registered for such chartering by the RYA, in addition to complying with all safety requirements stipulated by the race organiser. These measures will be timed to coincide with full implementation of the new code, and therefore compliance with the new arrangement under it, as confirmed by the MCA, will not have to take place before the end of the year.

Compliance with the new arrangements is not anticipated to add to the extent of a race organiser's safety requirements, however, the RYA has indicated that due to the increased administrative burden that this will create, registration fees will have to be imposed. This will most likely be approximately £30 per yacht for the first event in the season, with a fee of an estimated £15 for any subsequent event.

For more information, you could contact the RYA Technical Unit by email at technical@rya.org.uk.

Does my yacht have to be coded when offered for charter as part of a sponsorship or corporate hospitality arrangement?

Naturally a yacht owner can offer the yacht for use by whoever he pleases as long as no payment is received. However, where the yacht owner will receive remuneration for this service then the yacht must be coded before money can change hands. Yachts which are not coded and yet still operate commercially are running unnecessary risks in terms of fault implication in the event of an accident.

If the yacht is to be used for corporate hospitality and there is no money changing hands, but there will be a payment 'in kind' - for example in return for equipment, goods or services - then the MCA have confirmed that this will still be deemed to be a commercial enterprise and the yacht needs to be coded. Similarly if the yacht was to be 'lent' to a third party on the expectation that there may be a sponsorship arrangement arising as a result then, likewise, this would be deemed to be a commercial enterprise. There may be evident difficulties in asserting that a yacht had been chartered for commercial gain in the absence of direct remuneration - either in cash, good or services.

What rules apply to club owned yachts?

To coincide with the launch of the new MCA Harmonised Code for small vessels, the MCA has asked the RYA to introduce a voluntary scheme of safety assessment for RYA Affiliated Club's club- owned yachts. Once the new code is fully operational, the MCA intends to launch such a scheme, which is currently planned for the beginning of 2005. This scheme will assist self-certification of club-owned yachts.

An information note containing relevant information is expected to be circulated to all RYA affiliated clubs by the end of the year. The note will explain the list of safety standards, from which a club may choose the set most appropriate to their needs. It will also recommend the appointment of a club boat safety captain in addition to an annual assessment of club-owned boats against parts standards.

This article sets out in brief how the MCA Coding system works in relation to charter yachts but is of general application and should not be read as a substitute for specific legal advice in your particular circumstances. Burges Salmon are very keen to advise any sailors who are either entering into or are established within the world of professional or amateur sailing.

Any enquires should be directed to Stephanie or Jonathan at 0117 939 2000 or via email at stephanie.calvin@burges-salmon.com or jonathan.oddy@burges-salmon.com. To find out more about Burges Salmon - click here.

If you have any experience of this you wish to share - please let us know