Titanic law helps ship owner limit accident liability

A 1851 law could lower the exposure to tens of millions of dollars by capping the ship owner’s liability at how much the vessel is worth after the crash, plus any earnings it collected from carrying the freight on board, said Martin Davies.

The owner of the ship that rammed into a Baltimore bridge could face hundreds of millions of dollars in damage claims after the accident sent vehicles plunging into the water and threw the eastern US transportation network into chaos.

But an 1851 law could lower the exposure to tens of millions of dollars by capping the ship owner’s liability at how much the vessel is worth after the crash, plus any earnings it collected from carrying the freight on board, said Martin Davies, the director of Tulane University’s Maritime Law Center.

Lawrence B. Brennan, an adjunct professor of law at Fordham University School of Law in New York and an expert on admiralty and maritime law, said he assumes the Dali’s operator will shortly begin a proceeding in the US under the 1851 law, which was cited by the Titanic’s owner in a Supreme Court case more than a century ago.

Bloomberg Intelligence also said Maersk may not be liable as the Danish company had no crew on board and the ship was operated by a charter company. ADVERTISEMENT CONTINUE READING BELOW “Maritime insurance will likely cover some of the costs, yet uncertainty around the total liabilities and who will pay for them will likely weigh on Maersk’s spreads in the near term,” said Stephane Kovatchev, a credit analyst with Bloomberg Intelligence.

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