The Limitation of Liability Act of 1854

One option at the hands of shipowners to minimize its post-incident liability, is to assert the Limitation of Liability Act preemptively or directly after litigation is filed. Most plaintiff’s attorneys will disfavor such a principle in maritime law, but given the ancient doctrines which still apply in maritime law to this day, the Act stands to ensure that shipowners are protected in order to prevent a “runaway jury” and to minimize any effects of seaman claims which would slow or halt international trade. The Act, which was passed by Congress in 1851, sought to protect the shipping industry to ensure that the American shipowners were not subject to disadvantages in the international community by designing the Act to limit shipowner’s liability to the post-incident value of the vessel. Because, at the time, Congress recognized the risks associated with the shipping industry, such as weather events, piracy, and all matters in between that negatively affect shipowners, thus this Act operated to insulate the shipowners from further harm which might do the shipping industry no good. Notably, shipowners still face such threats to its industry and the benefits of international trade that we all take advantage of are greatly outweigh by the effects which some of the effects of the Act which are unfavorable to some.

HBN attorneys are well-versed in the Act and do not shy away from using it because of public scrutiny surrounding it.