Claims against vessel owners arising from recent maritime tragedies have focused greater attention upon the defense
raised under the Shipowners’ Limitation of Liability Act (46 U.S.C. §30501 –
30512). Such claims are asserted not only
against the owners of large seagoing vessels, but also against owners of smaller
craft such as yachts, duck boats and water shuttles.
Recent tragedies in which Limitation
of Liability was invoked by owners include the 2018 duck boat accident near
Branson, Missouri ( 17 deaths); the 2010
duck boat accident in Philadelphia ( 2
deaths); and the 2007 water shuttle accident in Baltimore ( 5 deaths). Limitation
of liability actions have also been filed by
the vessel owners in such famous tragedies as the sinking of the Titanic and following the Deepwater Horizon disaster.
The intent of the law was to allow ves-
sel operators, which accept great risks in
transporting goods and persons on wa-
ter, to escape unlimited liability, which
can put them out of business or stifle fur-
ther investment in maritime commerce
and shipbuilding. In 1734, the English
Parliament passed the forerunner of
modern statutes limiting shipowners’ li-
ability. The United States passed its own
version of the law in 1851 following the
fire and sinking of the Lexington in Long
The Limitation of Liability Act provides that whenever an accident occurs
on navigable waters resulting in personal
injury, loss of life or damage to property,
the shipowner may limit its liability to the
value of the vessel and its freights immediately following the accident. However,
the shipowner must prove that it does not
possess “privity or knowledge” of the negligent acts or unseaworthy conditions that
caused or contributed to the accident.
In the event that the shipowner or its
supervisory personnel knew, or by reasonable effort should have discovered the
unsafe or unseaworthy conditions that
gave rise to the accident, the shipowner
is deemed to have privity and knowledge
and will not be entitled to limit his liability.
Generally speaking, the most common
situations in which a shipowner will be
entitled to limit its liability include accidents caused by operational negligence
(e.g., navigational errors) of the Master
and crew, made at times when the ship
is beyond the control of the shipowner.
Accidents caused by unseaworthy conditions aboard the vessel that arise during the course of a voyage, when the
ship is beyond the shipowner’s ability to
discover them would also fall into this
category. If the shipowner can prove that
no act of negligence or unseaworthy condition caused or contributed to the accident, then the shipowner may exonerate
itself completely from any liability.
The ability to limit liability is not reserved to owners of the largest vessels
(the Act refers to these as “seagoing vessels”). Owners of smaller craft including
towboats, pleasure yachts, tugs, fishing
vessels, barges and other small craft are
also entitled to limit their liability.
The primary difference in applying the
Act between owners of smaller vessels
and owners of larger “seagoing vessels” is
that the knowledge possessed by the Master, superintendent or managing agent
of a “seagoing vessel” at the commencement of the voyage is also deemed to be
the knowledge of the owner. Therefore,
the owner of a “seagoing vessel” cannot
claim lack of privity or knowledge of unsafe or unseaworthy conditions known by
its Master, superintendent or managing
agent at the outset of the voyage.