How a Petition for Limitation of Liability Can Affect Recovery After a Boat Accident

As we approach the warmer weather and recreational boating begins, it is important to know about aspects of the maritime law that affect liability on the water.  The Limitation of Liability Act is an arcane law that can limit the amount an injured person or estate recovers when there is a collision or other incident causing injury, death or property damage on any navigable waters like an ocean, river, harbor or lake.

When this law has been invoked in a case, you need to take the right actions to defeat the limitation, or you may lose most of your ability to recover compensation after an injury or death on the water.

Operation of a Petition for Limitation of Liability

The filing of a Petition for Limitation of Liability means that even though the owner of a vessel may have millions of dollars of insurance coverage, the owner is trying to rely on the Limitation of Liability Act to limit the amount that is paid in damages to the value of the Limitation Fund or to eliminate any amount from being paid out.   Regardless of the insurance coverage, the Limitation Fund is based on the value of the vessel after the incident. This value is often determined by an appraiser hired by the vessel owner.

If, for example, there is an allision from the vessel crashing into the rocks of a jetty and the appraiser determines the value of the vessel after the crash to be $25,000.00, then the Limitation Fund will be set at $25,000.00.  That means even though there is $2 million in insurance coverage, liability for the vessel owner can be limited to $25,000.00 and that $25,0000 must be divided between all the people, estates, and entities who have claims in the action.

In order to defeat this limitation and access the full amount of the insurance policy available, the claimants (in other words, the injured passengers or estate of deceased passengers) must prove that the owner of the vessel knew of the negligent condition of the vessel at the time the vessel left port.  The Limitation of Liability Act places a greater burden on the injured party or estate than they would have to satisfy to prove negligence in a standard personal injury or wrongful death action.  A Petition for Limitation of Liability provides an additional defense for the owners to escape liability and avoid paying the injured person or family of a deceased passenger.

What Happens After a Petition is Filed

It is important to know that after the vessel owner files a Petition for Limitation of Liability:

  • An injunction will be issued restraining any further lawsuits from being commenced against the owner of the vessel. This will freeze or stay any lawsuits that have been filed against the owner.
  • The judge handling the Petition for Limitation will issue a deadline for all parties who have claims from the incident to file an answer to the Petition for Limitation along with their claim.
  • All potential known claimants (passengers on the boat or family of deceased passengers) will receive a certified letter which contains a copy of the Petition for Limitation of Liability. Notice of the deadline will also be published in the local newspapers.

If you do not file an answer and claim to the Petition for Limitation by the court deadline, you will be forever barred from bringing any claims against the owner of the vessel. All people, estates, or entities who file a claim become defendants and are part of one lawsuit.

The Judge will decide whether the owner of the vessel had sufficient knowledge of the negligence alleged.  In boat accident cases, this determination usually hinges on issues such as:

  • Was there equipment failure or malfunction?
  • Did the operator have sufficient experience and training?
  • Was the operator under the influence of drugs or alcohol?
  • What was the operator’s prior history of driving (including instances of driving while intoxicated)

Latti & Anderson LLP Fights to Protect Your Interests After a Boat Accident

Due to the complex nature of cases involving a Petition for Limitation of Liability, it is important to work with an experienced maritime attorney to discuss the legal implications and protect your rights. Latti & Anderson LLP has been successfully defeating Petitions for Limitation of Liability for over 60 years to ensure a better recovery for those injured in accidents at sea.  If you have received notice of a Petition for Limitation of Liability and you’d like to discuss your options, contact us for a free confidential case evaluation.