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Three maritime legal experts told Business Insider that the owner of the Singapore-flagged vessel called the Dali will almost certainly invoke a 19th-century federal law — that was successfully used by the owner of the Titanic — to try to limit its liability in the bevy of lawsuits that are expected to arise.
“If they’re fully successful, it will cap how much they have to pay in damages,” Michael Sturley, an expert in maritime law and professor at the University of Texas at Austin’s School of Law, told BI.
Grace Ocean Private Ltd, the owner of the 95,000-ton Dali ship that was bound for Sri Lanka before smashing into one of the bridge’s support pillars, has about six months to file a petition in federal court under the 1851 Limitation of Liability Act.
Grace Ocean Private Ltd did not immediately respond to a request for comment from Business Insider on Thursday.
“The chances of their filing a limitation action are somewhere north of 99.99%,” Sturley said.
Vessel owners could get damage claims capped at the ship’s value after an incident
The statute allows vessel owners to cap any damage claims stemming from a maritime catastrophe at the post-incident value of the ship, as well as the money owed from the freight the ship was hauling, the experts said.
“In essence, it’s treated as though the ship itself is its own one-ship corporation,” said Sturley. “So you’re, in essence, saying, take all the assets of this one ship corporation and use those to pay the claims.”
“It could save them a billion dollars,” Sturley guessed.
In order for limitation to be granted by a judge under the law, the vessel owner would have to establish that it was not at fault for the maritime incident and that it had no “privity or knowledge” of any negligence or conditions that led to the incident.
Whether the owner of the ship will succeed if it files a petition to limit liability depends on what the investigation into the disaster turns up, according to the maritime legal experts.
The Dali’s crew had reported that the ship lost power just before the vessel slammed into the bridge and sent a group of construction workers and vehicles plunging into the Patapsco River.
Two people were rescued from the water after the bridge collapsed. On Wednesday, officials said that the bodies of two victims were recovered from a submerged pickup truck. Four others are presumed dead.
Part of the probe into the tragedy will examine whether “dirty fuel” had something to do with the ship’s initial loss of power, sources familiar with the matter told The Wall Street Journal.
The owner of the Titanic invoked the 1851 law after the 1912 sinking
Sturley said that the limitation act “is regularly invoked, but much less often successful.”
Martin Davies, the director of the Maritime Law Center at Tulane University School of Law, told BI that statistics show that the “majority of limitation petitions fail, whatever the circumstances, because it is relatively easy for the liability claimants to establish ‘fault or privity’ on the part of the shipowner.”
Still, filing a petition for limitation allows a ship owner to channel any litigation into one court, which Davies called a “significant advantage in itself.”
In the case of the Titanic, the petition for limitation was a success.
Following the 1912 sinking of the famed ocean liner that left more than 1,500 people dead, the White Star Line sought to limit its liability in United States lawsuits to $92,000, the value of the recovered lifeboats, according to Reuters.
The case went to the US Supreme Court, and the court ultimately sided with the White Star Line. Millions in legal claims had been filed against the White Star Line, which ultimately settled all cases for a total of $664,000.
“The Titanic was a brand-new ship,” Davies said. “The cause of the casualty was a pure sailing error — going too fast in iceberg-heavy waters. There was no ‘fault or privity’ on the part of the shipowner there.”
Meanwhile, Oregon-based maritime lawyer Gordon Carey — who in 2019 filed a personal injury lawsuit against Grace Ocean Private Ltd on behalf of a man who was injured on another ship — told BI he does not foresee Dali’s owner having success with a limitation proceeding.
“If you’re talking about a situation where there is no power, where the vessel essentially is disabled because of the lack of power, then I can’t think of any reason why the owner would not know or should not know that it wasn’t being properly maintained,” Carey said.
Davies added, “It’s too early to say whether the petition would be likely to be successful, as much will depend on what are found to be the causes of the casualty. However, I must say that the way things look at present, it seems unlikely that a limitation petition will be successful.”
The 2019 lawsuit Carey filed involved an Oregon man who was injured when he fell 25 feet when a rope ladder he was using on a ship owned by Grace Ocean Private Ltd broke. The suit was eventually settled.
Carey said he was reluctant to make any assumptions about Grace Ocean Private Ltd based on this incident.
Over the past decade, the owner of the Dali and the operator, Synergy Marine Group, have been sued a handful of times for worker injuries in US federal court. Most of the cases were settled, while one was dismissed.
When reached for comment, a Synergy Marine Group spokesperson referred BI to its latest press release, issued Thursday.
“We deeply regret this incident and the problems it has caused for the people of Baltimore and the region’s economy that relies on this vitally important port,” the statement said, in part.
