Areas of Practice
Limitation of Liability
The maritime lawyers at Lipcon, Margulies, Alsina & Winkleman have significant experience in handling limitation of liability proceedings.
Limitation of liability is a statutory remedy in admiralty law that allows a vessel owner to limit their liability to the value of the vessel after an incident or accident occurs. A limitation action halts all other proceedings and requires that all claimants file their claims in the one limitation of liability action.
For example, if one recreational boat (BOAT A) collides with another boat (BOAT B), causing severe injury to several of the passengers aboard BOAT B, the owner of BOAT A, which caused the collision, may institute an action in Federal Court seeking to limit his liability to all the potential claimants to a total amount equal to the (post-collision) value of his boat involved in the collision. This is known as a limitation action and it requires the claimants to respond to the action initiated by the boat owner.
If the owner of the vessel can prove that they were not negligent, they can be exonerated from any liability to pay the injured claimants. If the owner can prove that they did not have privity or knowledge about the events that caused the incident or accident then they can limit their liability to the value of the vessel. This can be a harsh remedy if the vessel has little or no value such as a jet ski or a vessel that has sunk. Imagine, in the example above, that the post-collision value of BOAT A is $10,000 while several of the passengers aboard BOAT B have suffered catastrophic personal injuries such as paralysis, coma, and death. If the limitation of liability of BOAT A is upheld, the catastrophically injured passengers in BOAT B will never collect any money for their injuries.
In the absence of any value for the vessel, there is a statutory minimum based on the tonnage for the vessel; however, since a jet ski is not very big, the statutory minimum does not amount to anything significant.
Most attorneys will never handle a limitation of liability proceeding and probably have never even heard about it. Only legal professionals who are actively involved in boat or vessel litigation will come into contact with it and, even then, only very rarely.
Our law firm has a very active admiralty and maritime practice involving cruise ships, cargo ships, tankers, drill ships, jet ski’s, power boats, sailing vessels or any other manner of vessel. As such we have and are handling many limitation of liability matters. If you have any questions about limitation of liability matters and would like to speak with one of our attorneys, please contact us.