Good morning to Captain and Crew alike, and welcome to the Admiralty Docket. Today our topic is a situation that occurs in many commercial casualty scenarios, but also with some frequency when little (or inexpensive) vessels get into big trouble – the Limitation Action.
The scenario usually goes something like this: you and your family are on a boat ride with a friend or on a charter boat or rent jet skis for the day. An accident – sometimes a collision between boats or jet-skis, a grounding, a sinking, or any other number of potential casualties – occurs and you are seriously injured or multiple people are injured and you have to receive extensive medical treatment. You ask the owner of the boat, or the at-fault party to pay for your medical bills. Several months later, while you are still recovering from the accident, you receive legal documents from a process server or though certified mail or another delivery service which serve as a Notice to Claimants and set out the vessel owner’s claim for Limitation of or Exoneration from Liability.
Needless to say, this can be somewhat shocking to the injured party, and prospective clients come to us asking, “Why am I getting sued? I am the one that got hurt!’
This is why: recreational boating accidents which occur on the navigable waters of the United States are generally within the jurisdiction of the Admiralty courts. Within admiralty, the Limitation of Vessel Owner’s Liability Act, 46 U.S.C. 30501, et. seq., allows a vessel owner or owner pro hac vice (usually bareboat or demise charterer) to file a petition with the United States District Court asking that its liability to the persons and/or property injured in the casualty be limited to the fair market value of the owner’s vessel immediately after the casualty.
The vessel owner can properly limit its exposure pursuant to the Limitation Act when it has no “privity or knowledge” regarding the circumstances surrounding the cause of the casualty. This is a federal court action with no right to a jury.
So…..what now? When someone receives a Notice to Claimants, it is important to take action quickly to protect your rights. Once this Notice is issued by the Limitation Court, potential claimants have a very limited time to file claims or otherwise appear in the action to protect their rights. An investigation needs to be made into the facts surrounding the accident, and important decisions need to be made regarding the preferred jurisdiction for the injured person’s claims. Sometimes the Limitation Court is a good venue for the injured individual(s) to bring his or her claims to be heard in conjunction with the Petition for Limitation.
If not, however, further investigation should be had as to: i) whether the vessel owner has met the strict six-month time limit for filing the Limitation Action (this usually runs from the time that the owner or his representative has been given written notice of a claim); ii) whether the one or more claimants qualify for an exception to the exclusive jurisdiction of the Limitation Court to try liability and damages in the underlying injury claim as well and have liability and damages tried to a jury; iii) and what the facts are surrounding the owner’s “privity and knowledge” and whether the Limitation Action cannot be maintained as a matter of law.
More next week on the Admiralty Docket. Until then, remember that your rights and responsibilities may change as you approach the shore, and may God Almighty grant you pleasant sailing.