The Source for Maritime Legal Information

Can I Put in a Contract that I have a Maritime Lien for Attorney Fees if the Owner Does Not Pay?

We are often asked by our clients who refurbish yachts whether they can include a clause in their contracts which gives them a maritime lien for attorney fees paid in association with bringing a lawsuit to collect unpaid invoices. Unfortunately, the answer is no. However, maritime law does provide a remedy.

Contract.jpgMaritime liens are statutory. This means the Maritime Lien Act gives people who provide goods and services to yachts, ships and other vessels certain protections. This includes the ability to arrest the ship in order to secure payment on outstanding invoices. However, nowhere in the Maritime Lien Act does Congress give a maritime lien for attorney fees. As such, courts hold that a person cannot have a lien against the vessel for attorney fees even if the owner agreed to such a lien in a contract. However, this does not preclude a contractor from putting a clause in the contract whereby the owner agrees to be personally liable for attorney fees should a lawyer need to be hired to collect the debt.

Often times a maritime collection lawsuit has two defendants: (1) the yacht; and, (2) the yacht owner. The claim against the yacht is for the foreclosure of a maritime lien. This claim is for the amount of the unpaid invoices plus certain court costs allowed by law and prejudgment interest. The claim against the owner is for breach of contract. This claim is also for the amount of unpaid invoices, certain taxable costs provided by law, prejudgment interest plus anything else the contract may provide. If the contract is written properly, these additional damages can include costs (normally not allowed by pure operation of law) as well as attorney fees paid in the course of pursuing the collection lawsuit. As such, though the contractor cannot create a maritime lien for attorney fees he still can recoup his attorney fees against the yacht owner.

If you have a company that provides goods and services to yachts, ships or other vessels and have not been paid or would like us to draft a contract whereby you can pursue attorney fees against the vessel owner, don’t hesitate to contact our Florida Board Certified maritime attorneys.