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Limitation of liability statutes in maritime law allow a vessel owner to set limits on the extent of his liability after a maritime accident.
These statutes are contained in the Shipowner's Limitation of Liability Act of 1851. These laws allow a ship owner to limit the extent of his liability to the actual value of the vessel after the accident.
In order to understand why these privileges were accorded to shipowners, it's important to understand the context in which these laws were passed. Back in the 19th century, American shipping companies faced stiff competition from their European counterparts. European shipping companies were allowed significant immunity from liability after certain maritime accidents. At the time, it was believed that American vessel owners should also be given this kind of protection from liability, in order to make them more competitive.
It's important to understand that when these laws were passed, there was no insurance system to cushion vessel owners against damages claims. These laws are best used when they are applied to protect those vessel owners whose ships are involved in accidents, when not under the care or supervision of the vessel owner. For instance, if a vessel owner entrusted the vessel to a captain and crew, and the vessel was involved in a maritime accident, like a fire, the vessel owner could move to limit the extent of his liability in that accident.
In modern times, limitation of liability statutes have become controversial. They're seen as affording too many privileges to vessel owners. These laws can allow a ship owner to limit liability to the actual value of a vessel. In case of a vessel that has sunk or has been damaged beyond hope of salvage, the value of the vessel may be actually nil. This dramatically impacts the ability of the maritime worker to recover his claim.
The maritime attorneys at Schechter McElwee Shaffer & Harris have years of expertise and experience in maritime cases that involve the application of limitation of liability statutes. Such cases can become extremely complicated, and it requires a maritime lawyer with serious experience in handling limitations of liability laws and their applications, to make a successful claim.
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