Limitation of Liability-Ch. 14

Question 1

Purpose of 46 U.S.C. 30505

Answer 1

Allows owner of vessel to limit liability for any claim, debt, or liability, arising out of an incident occasioned, or incurred, without the privity or knowledge of the owner, to the value of the vessel after the accident and pending freight.

Question 2

Difference for Seafaring Vessels

Answer 2

Different rule for seagoing vessels (subject to some exceptions) whereby limitation fund is $420 per ton of vessel for personal injury and wrongful death claims if ordinary fund is insufficient to pay for all claims. 46 U.S.C. 30506

Question 3

Procedural Aspect

Answer 3

Brings all claims into common proceeding by enjoining suits in other courts. Claims paid in proportion to loss except personal injury and wrongful death claims of seagoing vessels paid additional amount based on $420/ton fund.

Question 4

Who can limit?

Answer 4

The owner of the vessel.

Owner “includes a charterer that mans, supplies, and navigates a vessel at the charterer’s own expense or by the charterer’s own procurement.” 46 U.S.C. 30501

Question 5

Determining whether Owner Had Privity of Knowledge

Answer 5

1What Caused Loss?
a. Claimant has burden

2. Did Owner have privity or knowledge of that cause?
   a. Limitation has burden of showing absence of privity or knowledge

Question 6

What is Privity of Knowledge

Answer 6

1. Involves some participation of owner (or its managerial personnel of a corporation) in fault causing loss
2. What owner knew or should have known
   a. In this case, the vessel owner has the burden of proving that he did not have privity or knowledge of the employee’s negligent actions.
3. Not mistake of competent pilot but can be failure to train crew or to detect defects he should have known of

Question 7

Limitation Fund

Answer 7

A. Value of vessel after voyage (i.e. after incident)
B. Freight pending is earnings of vessel for voyage
C. For seagoing vessel, $420/ton for personal injury and wrongful death
D. Pollution statutes and International Conventions typically use funds based on dollar amount/tonnage

Question 8

Limitable Claims

Answer 8

A. Claims arising from collision, allusion, personal injury, wrongful death, and cargo loss are limitable

• Wages aren’t subject to limitation 46 U.S.C. 30505(c).
• Maintenance and Cure not subject to limitation
• Owner’s personal contracts aren’t limitable