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El Faro Lawsuits and the Limitation Act

Fatal Course of the El Faro.pngOur maritime lawyers have recently been contacted by the media to provide legal insight on how the Shipowner’s Limitation of Liability Act may impact the lawsuits filed in the El Faro disaster. It is important from the outset to note that the Limitation Act is an over 150-year-old statute designed to encourage United States shipping enacted in a time when insurance was rarely extended to American shipowners. The reasoning behind the Limitation Act was to provide shipowners with a safety net to lessen their financial exposure should a maritime disaster strike. Congress hoped this, in turn, would encourage businesses to invest in shipping and operate vessels within the United States. In modern times, however, every shipping firm has marine insurance to protect them financially from a catastrophic loss such as a ship sinking. Given the common use of insurance, many courts have commented that the Limitation Act is outdated and no longer serves its intended purpose. Congress, however, has not removed the law from the books and a judge must apply the Limitation Act if invoked. The purpose of this post is to discuss how the Limitation Act may be used in the El Faro lawsuits.

The Limitation Act Will Not Likely Apply to All Defendants

Not every company named as a defendant in the El Faro lawsuits will be able to invoke the protection of the Limitation Act. As discussed above, the Act was designed to promote United States shipping. As such, only the ship’s owner (and perhaps a charterer) may invoke the Limitation Act. The Coast Guard lists Sea Star Line as the El Faro’s owner. The Limitation Act clearly allows Sea Star Line to invoke its protection. However, the ill-fated cargo ship appears to be operated by TOTE Maritime. In fact, TOTE Maritime’s President Tim Nolan told reporters that his company had the authority to veto the Captain’s decision to leave in advance of the storm. TOTE, not being the owner, has no right to seek Limitation Act protections unless it occupies the status of the vessel’s bareboat charterer. Nothing has come to light in the thousands of reports on the El Faro that TOTE was the ship’s bareboat charterer. As such it does not appear that TOTE will be able to seek limitation protections. Also, there were five Polish nationals who were a part of was what is known as the riding crew. Their employer will likewise not be able to take advantage of the Limitation Act.

It Will Be Very Difficult to Establish Limitation

The fact a company may have the right to invoke the Limitation Act does not mean it automatically can limit its liability. To obtain the benefits of the Limitation Act, the shipowner must establish by the greater weight of the evidence that it was unaware, or could not have become aware, of any negligent act or unseaworthy condition which caused the ship to sink. Given the reports that the vessel was aging, and its boilers were recommended to be overhauled, it appears that it will be very hard for the El Faro’s owner to be able to limit its liability. To read more about the Limitation Act, feel free to read a paper on the topic our attorneys’ wrote and presented at the Southeastern Admiralty Lawyers Institute’s annual symposium by clicking here.

Request for Help

Our law firm has been contacted to represent multiple families of the El Faro’s victims. To better serve these families, we are working with a well-known maritime safety expert to consult us on the mechanical and navigational aspects of the case. To assist us further, we ask that anyone who sailed aboard the El Faro or once worked for TOTE Maritime to contact us. We need to learn more about the El Faro’s condition, history of repairs and maintenance as well as TOTE Maritime’s policies and procedures. You may contact us toll free in the United States at (888) 499-0551or outside the United States at (305) 416-2901.