Limitation of Liability Act
Maritime law is hugely complex, with some laws going back centuries. One such law is the Limitation of Liability Act, a federal law originally enacted in 1851 to protect American shipowners.
In modern times, however, maritime workers who file an injury claim against their employer are surprised and alarmed to learn that, in response to their claim, their employer has filed a lawsuit under the Limitation of Liability Act. These lawsuits can be devastating for injured workers as it means shipowners can limit their responsibility and the compensation they may have to pay you.
Historically, the statute has been invoked to limit the liability of certain parties in the sinking of the Titanic and the Deepwater Horizon oil spill.
If you’ve been injured in a work-related maritime accident, it’s crucial that you work with an experienced attorney who understands the Limitation of Liability Act, can guide your case through the limitation action, and make sure your right to full compensation is protected.
What is the Limitation of Liability Act?
In cases involving maritime personal injury or wrongful death claims, the Limitation of Liability Act allows shipowners to file a petition for Limitation of Liability with the court to restrict the liability owed to you to the post-accident value of the vessel.
Put simply, it means that no matter how horrific your injuries, or whether a loved one died as a result of an accident, or even if the shipowner has insurance money to cover the damages and was responsible for the accident, they will only have to pay you the value of the vessel.
Worse still, if the vessel sank or has been severely damaged and is now worthless, you could get no compensation at all.
The Limitation of Liability Act applies to all seagoing and non-seagoing vessels used to navigate United States water, including the ocean, lakes, and rivers. Vessels may include barges, canal boats and lighters, as well as larger cargo ships and other types of ships used at sea.
It’s important to note that there is an exception to when a shipowner can escape liability through the use of the Act — they cannot avoid responsibility when the injury occurred due to the owner’s privity of knowledge. In other words, if the shipowner knew, or should have known, about the acts of negligence or unseaworthiness that caused the injury.
History of the Limitation of Liability Act
The Limitation of Liability Act, commonly called the Limitation Act, was originally created to protect the American shipping industry and to prevent shipowners from going bankrupt after large losses. At the time, maritime injury claims often exceeded the value of a vessel after an accident.
Back in the 1800s, investigating a maritime incident was very different from today. Communication wasn’t as advanced as it is now so it was difficult to determine exactly how, when, and why an accident occurred, and who was partly or wholly responsible.
Moreover, back then, shipowners didn’t have access to comprehensive insurance protection, corporate structuring that encouraged investment without fear of liability, or even liability-limiting statutes such as what we have in place today.
Those concerns no longer exist in today’s technologically advanced and legally evolved world, which is why the Limitation of Liability Act has largely been criticized as being antiquated and no longer necessary under modern maritime law.
Still, the Limitation of Liability Act plays an important role in deciding the availability and amount of damages for injured maritime workers who file a claim against a shipowner.
How Shipowners Can Use the Limitation of Liability Act
Shipowners can assert their right to limit their liability in one of two ways:
- They can file a petition for Limitation of Liability in the federal court to find out whether the Act applies. As part of this lawsuit, the owner sues the victim of the accident. The owner can consolidate the claims of multiple injury victims into one lawsuit, and this is one of the benefits of filing a suit in federal court for owners.
- They can raise the Limitation of Liability Act as a defense if they are sued by the victim of an accident.
When a shipowner raises the Limitation of Liability Act, it can be crushing for maritime victims who may find themselves unable to recover full compensation for their injuries due to the owner’s limited liability. However, it’s important to know that this doesn’t mean that you can’t defend against the Act’s applicability to your case.
How an Experienced Maritime Attorney Can Protect Your Rights to Compensation
Cases involving Limitation of Liability are difficult and procedurally challenging. Defending against a petition for limited liability must be done right or you lose any chance of recovering the full damages you are entitled to for your injuries.
That’s why it’s important to hire a maritime attorney who has a thorough understanding of the Limitation of Liability Act, and experience working on cases involving the Act. At Montagna Maritime Law, we know shipowners may attempt to limit their legal accountability after you’ve been involved in an accident while working aboard their vessel. Our attorneys will work with you to determine how the Act applies to your specific case, and how to defend against its applicability.
Free and Confidential Evaluation of Your Case
If you would like to find out more about your legal rights after suffering an injury at work, take advantage of our free consultation. You can learn more about what benefits you may be entitled to and how our experienced maritime attorneys can help. We handle all our cases on a no win, no fee basis, which means you will pay attorney fees only if we are successful in getting you compensation.