Maritime Law: Limitation of Liability – A Basic Understanding

Maritime Law can present difficult obstacles for individuals who are injured out at sea or on navigable waters. Our firm diligently represents maritime workers that are injured during the course of their employment, and individuals who are injured while on the water for recreational or other purposes. When filing a lawsuit for personal injury or wrongful death resulting from activities on the water, it is important to understand what rights a Defendant may attempt to assert to diminish the value of your claim.

If you file suit against the owner of a ship/vessel, the vessel owner may – under certain circumstances – file a claim for Limitation of Liability, or a “limitation suit.” When vessel owners file limitation suits, your case against them will become significantly more complicated. It is vitally important when filing a suit under the Jones Act or under general maritime laws that your lawyer be able to navigate the Limitation of Liability Act. The trial attorneys at Morrow & Sheppard LLP are well versed in this area of law and understand how to defend against limitation suits in order to maximize the value of your personal injury or wrongful death lawsuit.

What exactly does this mean, and why does it exist?

When you file a maritime personal injury or wrongful death lawsuit against a vessel owner, the owner can respond by attempting to limit the amount owed for your injuries to the value of the vessel, or attempt to avoid liability altogether. This means that if you were awarded a large sum of money by a jury for the injuries you sustained while on someone’s vessel, and the owner of that vessel proved that the value of the vessel is worth significantly less money than you were awarded, you would not be able to collect the difference. Simply put, you would only be able to collect the money equal to the value of the vessel, regardless of whether you were entitled to more. This is why it is important to vigorously fight the vessel owner’s limitation suit during the course of your personal injury or wrongful death suit – so that you can be compensated for the full value of your claims.

The Limitation of Liability Act was enacted in 1851. It was meant to protect maritime commerce. As recognized by the United States Supreme Court in later construing the laws, shipping and travel on the water was highly dangerous, and accidents were common. Due to limited technology, it was also highly difficult to make determinations in maritime cases about parties responsible and the factors that brought about injuries or harms. Congress wanted to encourage ship/vessel owners to participate in trade despite the dangerous risks involved, and thus enacted the laws under the Limitation of Liability Act to protect companies/owners against lawsuits for maritime casualties. In recognizing these dangers, maritime laws are also designed to protect maritime workers. For this reason, when maritime workers are injured, they can exercise their rights to compensation under the Jones Act (see our blogs on the Jones Act to understand your rights as a seaman).

How does it work, and what will I need to prove to fight against a limitation suit?

For a detailed description of the Limitation of Liability Act and its implications, see our blog on the Nuts & Bolts of the Limitation of Liability Act. Generally speaking, a vessel owner has 6 months from the notice of a claim against it to file a limitation suit. This timeline can start with a demand letter following your injury, or, as we typically see, it will start after you file your personal injury or wrongful death lawsuit.

Once the limitation suit is filed, your ongoing case will be paused until the limitation issues are resolved. You can avoid pausing your injury/death case while resolving the limitation suit under certain circumstances (see our blog on Battling Limitation of Liability Claims Against Maritime Injuries).

When in the limitation suit, you will undergo discovery processes and exchanging of information, the parties involved will argue and attempt to demonstrate that:

• As the injured party – your personal injuries or wrongful death was caused by the negligence vessel (and/or its employees), or that the vessel was unseaworthy.
• Once you have proved liability, then, in order to limit your compensation to the amount of the value of the vessel – the vessel owner must prove that it lacked “privity or knowledge.” This means that if the vessel owner can prove that your injuries occurred by an accident that it could not have discovered by a reasonable inspection, or could not have known was possible, they will be able to limit your damages.

Remember, if the vessel owner is able to limit your damages, this does not mean you have lost the case. It simply means that you cannot seek money outside of the value of the ship/vessel you were injured on.

Call or inquire online to speak with an experienced maritime injury attorney at Morrow & Sheppard LLP about your maritime injuries for a free, confidential consultation.