Limited Liability

[ombugge]

Here is an article from CNA re: Owner and Manager attempting to limit their liability for the M/V Dali incident:

Ship's owner, manager try to limit liability in Baltimore accident

Their joint filing seeks to cap the companies’ liability at roughly $43.6 million. It estimates that the vessel itself is valued at up to $90 million and was carrying freight worth over $1.1 million in income for the companies. The estimate also deducts two major expenses: at least $28 million in repair costs and at least $19.5 million in salvage costs.

[Tugboater203]

We all knew that was coming. I’m sure the general public will be outraged at the “low” cap due to the expected costs. That number isn’t even really enough for the wrongful death suits that should be coming soon.

[spowiednick]

This Gard material shows how Liability limitation worked in case of MSC Flamina .Owner v/s Charterer

Limitation of liability lessons from the msc flaminia - Gard

[tugsailor]

Limitation of liability is usually denied, especially if shoreside managers were consulted and they advised or pressured the Master to depart with defects.

A bit off the Limited Liability Act topic, but

Watch for the P&I Club to try to deny coverage if the Master and Engineer are charged with criminal acts.

Insurance generally covers negligence.

Insurance generally does not cover intentional or criminal acts (taking the decision to sail with serious unreported defects).

Insurance generally may not cover “gross negligence “ or “recklessness.”

[spowiednick]

Interesting comment from Splash247 " Baltimore takes Dali owner and manager to court"

[Hogsnort]

As for much of these things there will be some unintended consequences. The loss of limitations of liability will in tern result in a sharp rise in Insurance and P&I club dues for voyages to US ports leading to an escalation in freight charges. If you have your eyes on a Beemer or Merc I would get in quick.

[tugsailor]

Not at all.

Limitation of Liability is usually denied. It has been for a long time. It’s a relict of the past from a beyond era before instant 24/7 comms and dozens of emails from the office everyday.

[Kennebec_Captain]

Don’t know what charter rates are for a 6500 CEU car carrier, assuming $100,000 / day which may be high, divided by 4000 cars comes out to $25 / day per car. Under $1000 per car, not much on a high-end car.

[spowiednick]

Ok. Looks like everybody has a point here .

Mr. Gordon comment is still opened for rebuttal and/or discussion under the source article . May be the arguments presented here should be adressed there. I am not competent to do it.

But there is someting that boders me a lot.

This liability, that applies to all sorts of damages to property, pollution , death is denied sort of automatically because of this 24/7 access to the ship and most legal minds sitting on the cases know or suspect , that masters of today are not the same masters of say 50 years ago and present day masters/Chengs are heavily influenced/pressured by office/shore side people who have means of monitoring all aspects of ships activity via remote means and increased reporting requirements.

From my observation (25+ years of command) most of this office blokes have no maritime licences and yet they sort of command remotely and instruct those on board .

ALL on board , including ratings have their valid STCW cerificates/licences or other(USCG) and some of them have licences, that entitle them not only to command but also manage the vessel. I read here and there ,that nowadays after the CMA CGM Libra precedence some managements require masters to send their voyage plans for OFFICE APPROVAL!!! .

In my subjective opinion this is a complete nonsense.

And yet and despite all what I have written above , the situation regarding CARGO claims is still according to the old and ancient rules . The majority of B/Ls have a fine print on their back side containing what !!!.

Containg Haugue Visby rules , which so far are doing very well, despite introduction of Hamburg rules and Rotterdam rules ( one of them is still not ratified AFAIK) .

And HV rules contain the following :

Article IV

1. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped and supplied, and to make the holds, refrigerating and cool chambers and all other parts of the ship in which goods are carried fit and safe for their reception, carriage and preservation in accordance with the provisions of paragraph 1 of Article III. Whenever loss or damage has resulted from unseaworthiness the burden of proving the exercise of due diligence shall
   be on the carrier or other person claiming exemption under this article.

2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:

(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship.

And in contrast with this Limitation of liability thing , cargo claims are succesfully defended and all that is possible is done to prove masters/crew fault to rely on
Art IV rule 2 a) of mentioned HV rules.

It beats me really.

Addendum from P&I on HV r.
2767683-contracts-of-carriage-and-bills-of-lading-the-hague-visby-rules.pdf (standard-club.com)

[ombugge]

Lobbyists to the rescue?:

Dali owner hires lobbyists in Washington to quash changes to America’s...

Citing federal lobbying records, the Baltimore Sun is reporting that Grace Ocean, the Singapore-based owners of the Dali containership, have hired Blank Rome Government Relations to lobby to make sure there are no changes to the Limitation on Liability Act of 1851.

Blank Rome Government Relations Lobbying Profile

Is this something that could break the deadlock on Capitol hill?

[Hogsnort]

I expect to see a new church St Ives (the patron saint of lawyers) built some where in Baltimore.

[ombugge]

New Bill Seeks to Hold Foreign Shipowners Accountable for Maritime Accidents

The legislation comes in response to the March 2024 collapse of the Francis Scott Key Bridge in Baltimore after it was struck by the M/V Dali containership. The incident resulted in the deaths of six workers who were on the bridge at the time and closed access to the Port of Baltimore for months.

“If the foreign owners of the cargo vessel that took down the Francis Scott Key Bridge in Baltimore think they can leave American taxpayers holding the bag, I have a message for them: you broke it, you bought it,” said Garamendi. “Access to America’s ports and our consumers is a privilege, not a right. If the foreign owners of the Dali want to keep that privilege, they can break out their checkbooks, call their insurance company, and pay their fair share of the bridge replacement costs and compensation to the families of the six workers who died tragically that day.”

Has culpability for this accident been proven and liability assigned in a court of law yet?

If US ban foreign ships from access to their ports, how will US import and export be faring?

The “Justice for Victims of Foreign Vessel Accidents Act” proposes to increase liability for foreign-flagged vessels to up to 10 times the vessel and cargo’s value, maintain current liability for U.S.-flagged vessels, and apply the new liability retroactively to March 25, 2024.

What happen to “equality before the law”?

[spowiednick]

So You do not believe in American exceptionality?

Start believing and You may have less headaches . Let them have it and let’s roll the laws all the way back to Civil War.
Why not?

Cheers

[Hogsnort]

Retrospective legislation has been dammed since Aristotle. The bill will disappear without trace and American owners of ships registered under Liberia or Marshal Island flags will see to it.

[powerabout]

Maybe they will have a go at beneficial ownership?

[Steamer]

It’s an election year, they can’t let a minimally controversial source of campaign contributions go untapped. The cry to “make them pay” is somewhere between motherhood and apple pie to most folks.

The Congressional motto is “never let a good crisis go to waste.”

[float]

@Hogsnort

Retrospective legislation has been dammed since Aristotle.

And for good reasons, ranging (among others) from the ethical, logical, jurisprudential, sociological, to common sense.

If you want to have reasonable “law and order”, you’ll have to make decent laws first…

[Kennebec_Captain]

Companies focus on the bottom line. If the cost of an incident is higher that changes the incentives towards running a safer operation.

That approach, more market based, might be more practical then simply piling on more regulation.

[Hogsnort]

One of those companies being insurance and the re-insurance market. A sharp adjustment in the cost of cover for trade to the US will be passed on In freight rates. It may make US flag vessels more competitive in the short term but there is a lot of US money in the re-insurance market.

[Kennebec_Captain]

The increased liability limits should apply to all vessels, not just foreign.

It would be expected that insurance rates would rise if shipping companies had to cover more of the risk of an incident. The current situation is that shipping companies are getting the equivalent of a indirect, hidden taxpayer subsidy.

For example liability limits provided a taxpayer funded, indirect subsidy to the owners of the dive boat Conception.