Limitation of Liability Law: 19th Century Maritime Law Could Affect Payout for Baltimore Bridge Disaster, Expert Says

SAN FRANCISCO — Attorney John Hillsman has spent his entire legal life learning about boats, vessels, and just about anything that floats. And he’s seen his share of disasters, including representing a Bay Area fisherman in the 2007 Cosco Busan oil spill in San Francisco Bay. But he says charting a legal course often begins with unraveling obscure maritime law that dates back more than a century.

“The Shipowner’s Limited Liability Act literally dates back to middle medieval Gothic concepts, but was enacted in the United States in 1851, the same month Moby Dick was first published,” Hillsman said.

That’s right, that Moby Dick. And like the famous novel, it is a twisted story.

Hillsman says the law was originally intended to encourage investment in American Clipper ships, protecting owners from maritime disasters. In most cases, it limits liability to the value of the vessel and its freight. For payment, owners can group all claims against them into a single case and send it to a special maritime court where it is heard by a judge, but not a jury.

“They will file that bond in federal court and say, here is the value of the vessel, please issue an injunction stopping all litigation against us and then establish what is known as ‘ammunition,’ where the court says ‘you, the plaintiffs, you have until…’ will choose a date: ‘July 1, 2024 to file any claims you may have against the owners of the Dali. This ship in my courtroom. If you don’t file it, if you don’t file it Yes If you don’t meet that deadline, you can potentially lose your claim forever,'” Hillsman said.

In the famous sinking of the Titanic the only thing that remained were the lifeboats. And even after negotiations, the reported settlement averaged only $430 for each of the estimated 1,500 victims. And while recent disasters, such as the deadly Conception dive boat fire off Santa Barbara, have sparked calls to rework the law, it still influences many maritime cases today. But Hillsman says other strategies remain in incidents like the Baltimore disaster.

And as in the case of the massive Exxon Valdez oil spill, lawyers could try to show that the owners knew in advance about problems with their ship or its crew. But with deaths involved, Hillsman believes many companies and their insurers want to avoid the lasting stigma of a court fight and will instead choose to negotiate with victims’ families.

“This is going to create such an uproar that the owners are going to be very aware of the optics of the situation once they take everyone to federal court asking for a limitation. Then, I think, very quickly there will be negotiations with the families to get them out of the picture as quickly as possible,” Hillsman said.

Critics also point out a final irony. While the Limitation of Liability Act was intended to boost American shipping, only a small percentage of modern commercial vessels are owned by the United States, meaning the protections often benefit foreign companies.

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