Injured sailors and their family members have a right to file claims against the vessel’s owner for personal injuries, deaths, and other losses due to a disaster at sea. However, the value of these claims can be greatly diminished due to a law called the Limitation of Liability Act, which allows companies to pay far less in successful claims to injured crewmen, passengers, and guests.
Exceptions to the Limitation of Liability Act of 1851
The Limitation of Liability Act of 1851, commonly called the Limitation Act, was created to prevent American shipowners from going bankrupt after large losses. After a major maritime incident, a vessel owner can file a proactive claim under the Limitation Act before any injury lawsuits can be filed. This action has two main functions: to coordinate alllawsuits for the incident into a single federal action and to limit the amount available to plaintiffs to the post-loss value of the vessel and its cargo. If the vessel and cargo were lost completely, the value of the vessel cannot be calculated in the owner’s assets, making much less available to injury victims.
However, not all injury claims are subject to the limitation of liability actions. No matter what the circ*mstances of the disaster, shipowners will remain liable for:
- Current and past-due wages owed to seamen
- Maintenance and cure benefits for any injured seamen
- Cargo damage that was caused by a change or deviation from the agreed-upon methods of delivery in the contract of carriage
- Return of unearned freight
- Payment used under personal contracts of the shipowner (such as salvage, towage, vessel repair, supplies, and services contracts)
- Ship and vessel mortgages
- Environmental claims under the Clean Water Act and Oil Pollution Act of 1990
If a company is successful in its limitation action, the victims’ damages may be far less than the amount of their medical bills, disability costs, and pain and suffering. For this reason, it is vital that injured workers seek the advice of an attorney who is familiar with the requirements of the Limitation of Liability Act, as well as at the legal methods to defeat the vessel owner's claim. Contact us online or call us today at 1-800-362-9329to schedule your free initial consultation. You have the opportunity to speak with one of Hofmann & Schweitzer's experiencedmaritime injury lawyer who will help explain your rights.
FAQs
BASIS FOR ADMIRALTY JURISDICTION
What is the 1851 maritime law limiting liability? ›
To mitigate the high risks shippers and ship owners faced on every voyage, the Limitation of Liability Act was created. Under the Limitation of Liability Act, a shipowner would be able to limit their total financial liability to the value of their ship.
What is the limitation of liability clause of 1851? ›
Section 3 of the 1851 Act states "the liability of the owner or owners of any ship or vessel ... shall in no case exceed the amount or value of the interest of such owner or owners respectively, in such ship or vessel, and her freight then pending". The 1851 Act was later codified as Rev. Stat.
What is the limitation of liability clause maritime? ›
Limitation of liability. A distinctive feature of maritime law is the privilege accorded to a shipowner and certain other persons (such as charterers in some instances) to limit the amount of their liability, under certain circ*mstances, in respect of tort and some contract claims.
What are the limitations of the liability Act admiralty? ›
The Limitations of Liability Act allows vessel owners to limit their liability after a maritime incident or casualty to the post-casualty value of the vessel and its cargo. The incident must happen in United States waters for the law to be used.
What is the 1851 law on ships? ›
The Limitation of Liability Act of 1851, also known as the Limitation Act, or the Shipowner's Limitation of Liability Act of 1851, is a statute that allows the owner of a vessel to have any damage claims arising from a maritime casualty to be limited to only the value of the vessel and the freight earned at the end of ...
What is the limit of liability in marine insurance? ›
"Limit of Liability” is one of the agreed conditions under “Marine Open Cover” whereby the insured agrees that it is the maximum sum insured of the total value of the insured shipment(s) (usually applied to any one conveyance or any one location).
What does limitation of liability agreement mean? ›
What does Limitation of Liability mean? Limitation of liability means a contractual provision to reduce or exclude the types and amounts of liabilities one party may recover from another party relating to default or non-performance in connection with a contract.
What is the maritime law of liability? ›
A vessel owner, pursuant to the Limitation Act, is entitled to limit its liability after a maritime incident or casualty to the post casualty value of the vessel and the pending freight, except when the loss occurred due to its “privity or knowledge.” 46 U.S.C.
What is strict liability in maritime law? ›
“Strict liability” means that victims of oil pollution damage do not have to prove fault on the part of the shipowner in order to obtain compensation.
Examples of exclusions from limitations of liability include losses resulting from a breach of confidentiality, refusal to provide services, death, bodily injury, damage to tangible property, violation of applicable law, gross negligence or willful misconduct.
What is the limitation of liability for maritime claims 1996 protocol? ›
Under the amendments to the 1996 Protocol, the limits are raised as follows: The limit of liability for claims for loss of life or personal injury on ships not exceeding 2,000 gross tonnage is 3.02 million SDR (up from 2 million SDR). For each ton in excess of 70,000, 604 SDR (up from 400 SDR).
What is the statute of limitations for admiralty law? ›
The Uniform Statute provides a general three year statute of limitation barring claims arising from injury or death occurring on navigable waters during a traditional maritime activity three years after the cause of action accrues.
What is limiting liability law? ›
Limitation of Liability Provisions
In addition, these agreements typically place a cap on the total amount of damages for which either party can be liable in connection with the agreement. The result is to disallow a party from recovering the full damages caused by the actions of the other party.
What is the limitation of ship owner's liability? ›
The maximum liability of a shipowner is usually calculated based on the size of the ship involved in the incident and has no relationship to the amount of damage caused by the incident. The rationale for allowing shipowners to limit their liability in respect of ship-sourced damage is to encourage shipping and trade.
