January 8, 2016

In the January 2016 issue of
WorkBoat magazine, Tim covers
developments in the sinking of the container ship El Faro. The
31,000 ton ship was lost at sea in the vicinity of the Bahamas
when it ran into Hurricane Joaquin on October 1, 2015. Tragically,
33 people were lost in the sinking.

The U.S. Navy and the National Transportation Safety Board had
jointly worked on the investigation and site survey, which was
very challenging due to the fact that the ship rested on the sea
bottom in 15,000 feet of water. It was hoped that the voyage data
recorder could help answer some of the questions surrounding
the incident. Unfortunately, it was never found on the ship itself or
in the debris field.

A legal development in the matter was the filing for exoneration
from or
limitation of liability by the vessel interests. In the article
below, Tim covers the operation of this arcane aspect of U.S.
maritime law. It is a controversial piece of legislation that
appears not only in large commercial vessel casualties of this
nature, but also with boating accidents, jet ski accidents, cruise
ship accidents and other incidents on the water involving
wrongful death on the high seas, personal injury, or property and
cargo losses.

Limitation of Liability in the El Faro Sinking

On Oct. 30, vessel interests filed for exoneration from or
limitation of liability. This means that they seek to put a cap on
payments made to claimants suing them in the aftermath of the
loss. This cap is computed from the post-accident value of the
vessel and freights pending.

A complaint was filed in U.S. District Court in Florida to establish
a figure of $15.3 million as a monetary cap on these lawsuits. The
Limitation of Shipowners’ Liability Act of 1851 covers limitation
actions under U.S. maritime law. This 19th century law originated
at a time when the nation’s mercantile fleet was in its infancy and
needed protection to encourage the growth of commerce. The
intent was to give a break to shipping companies that didn’t have
a great deal of control over the operation of their square-rigged
cargo ships located 10,000 miles away on the other side of the
globe.

If ship owners could demonstrate that they didn’t have
knowledge and participation in the factors that caused a
collision, sinking, grounding, or other type of maritime loss, they
could limit their liability to the post-accident value of a vessel plus
freights pending.

Since its enactment, the law has been applied in a number of
high-profile cases. It was invoked after the Titanic sank in 1912,
where the liner’s owner succeeded in limiting liability to about
$92,000, the value of a string of lifeboats that survived the
disaster.

More recently, the City of New York attempted to limit its liability
to about $14.4 million after the 2003 Staten Island Ferry accident
where 11 people died and over 60 were injured. That figure
represented the post-casualty value of the ferry Andrew J.
Barberi. However, the city was hurt by the National
Transportation Safety Board’s determination that the accident
resulted from poor oversight and failure to utilize effective safety
measures.

Establishing whether an owner had control over the events
surrounding a vessel’s loss can require thorough examination of
physical evidence, company practices, voyage logs, employee
testimony, and other relevant information.





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