Can the Limitations of Liability Act affect my maritime injury claim?

The Limitations of Shipowner’s Liability Act of 1851 is a federal law that was created to help U.S. ship owners to compete against foreign ship owners while still providing protection for offshore workers and their families. When a ship or other vessel is involved in an accident, the Limitation of Liability Act limits a vessel owner’s liability to the post-accident value of the vessel and cargo.

In 1851, this law made sense. Ships crossing the oceans were far from help. Sailors and ships were at the mercy of pirates, bad weather, fires and other unforeseeable disasters. It allowed families to sue for compensation if their loved ones were lost at sea, but protected ship owners from unlimited liability when lives were lost in a catastrophic accident that could not be prevented. Most importantly, the Act did not limit liability if unseaworthiness or the owner’s own negligence contributed to the loss.

The Limited Liability Act offers many protections to ship owners:

• The company’s liability is limited to the value of its interest in the vessel at the end of the voyage.
• The vessel owner must petition in federal court for protection under the Limitations of Liability Act.
• The owner must transfer his remaining interest in the vessel to a court-appointed trustee or he must post bond equal to the post-accident value of the vessel.
• The Limitation Action may be filed in any district in which the vessel has been attached or arrested.  Otherwise, it may be filed in any district in which the owner has been sued.
• The court can then require that all lawsuits connected with the accident be filed in that venue.
• There may be a 6-month limitation to the filing of new lawsuits.

Transocean Ltd. filed a petition to limit the company’s liability for the Deepwater Horizon oil rig explosion. If granted, it will limit Transocean’s liability to $27 million. Since the explosion, Transocean has been named in more than 100 class-action, personal injury and wrongful death lawsuits.

If you are concerned about how the Limitations of Shipowner’s Liability Act may affect your maritime injury or Jones Act case, contact the maritime law attorneys at The Young Firm. We are always happy to answer your questions.