Article by Jaime W. Betbeze
Shipowners enjoy a singularly unique benefit in their ability to limit their liability for property damage, personal injury, and even loss of life under both U.S. maritime law and various international conventions. This benefit is not without its detractors, for who else can put a cap on their liability for damage to third parties, thereby protecting their own assets regardless of the magnitude of the injuries to others? Nevertheless, the policy considerations for limiting shipowner liability date back hundreds of years in recognition of the inherently dangerous nature of seagoing operations and the desire of nations to promote a vibrant shipping industry in support of international trade for the benefit of their citizens and economies.
Despite its widespread appeal and continuing efforts to unify maritime law on a global scale, there is no single scheme of shipowners' limitation of liability that is uniformly accepted by all seafaring states. The most widely accepted scheme is the 1976 Convention on Limitation of Liability for Maritime Claims, which was amended by the 1996 Protocol and again updated in 2012. However, this convention has not been adopted by all maritime nations (most notably, the United States and China), and not all states parties to the convention have uniformly adopted the more recent updates. Consequently, shipowners faced with significant competing damage claims as a result of a maritime casualty may be tempted to shop around for the most favorable forum in an effort to limit their liability to the greatest extent possible.
This Article provides a basic overview of the limitation of liability schemes under the U.S. Limitation of Shipowners' Liability Act, the 1976 Convention on Limitation of Liability for Maritime Claims, and the 1996 Protocol thereto as background on the factors that a shipowner may consider in selecting a forum for a limitation of liability action in the face of multiple claims arising from a single maritime casualty.
About the Author
James Betbeze is a shareholder in the Mobile, Alabama, office of Maynard, Cooper & Gale, P.C. specializing in admiralty and maritime law. He is a member of the Maritime Law Association of the United States (MLA) and a member of the Southeastern Admiralty Law Institute (SEALI), where he serves on the Long Range Planning Committee.
Citation
92 Tul. L. Rev. 1093 (2018)