Imagine a situation where you are hurt in a boating accident. After spending time in the hospital, you receive a letter enclosing a “Petition for Exoneration or Limitation of Liability” from a lawyer representing the owner of the boat that caused the accident. The letter states that you are required to file a claim in Federal Admiralty Court within a certain time or your claim will be abandoned. This happens to many injured boaters each year.
Signed into law in before the Civil War, the Limitation of Liability Act allows boat owners responsible for injuries to, if certain things are proved, limit their liability to the post loss value of the vessel. This Act was created to promote United States shipping for a developing nation and before boat owners could easily obtain insurance. Unfortunately, since the Limitation of Liability Act is worded to apply to “vessels” and “vessel” having been defined to include “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water”, courts interpret the Act to apply to recreational boats, houseboats and even jet skies. This is an obvious unintended consequence of the Act which was meant to apply to commercial shipping.
Right to a Jury Trial
Perhaps the biggest right an injured boater looses if the owner files a limitation of liability lawsuit, is the right to a jury trial. A Petition for Exoneration or Limitation of Liability must be filed in federal court under admiralty jurisdiction. A court hearing a case under admiralty jurisdiction must do so without a jury. Consequently, an injured boater appearing in a limitation proceeding must have his case decided by the Judge rather than a jury of his/her peers.
Right to Select the Court
Usually the injured party gets to select whether the claim will be decided in a state court or federal court and also the state and city of the court’s location. In Limitation proceedings, the claim must be decided in federal court. Even if the injured boater sues in state court, that action will be stayed and brought into federal court. Furthermore, if the boat owner files the limitation of liability action before the injured boater files a lawsuit against the owner, the boat owner gets to select the state and city where the case will be decided (usually where the subject vessel is located)
Generous Statute of Limitations
Under maritime law, an injured boater has up to three (3) years following the accident to bring a lawsuit against the offending boat owner. However, if the boat owner files a limitation of liability action, the three (3) year statute of limitation is shorten to usually a few months after the accident. This forces the injured boater to litigate a claim perhaps without even knowing the full extent of his/her injuries. Should the injured boater ignore the shortened deadline (also known as a “monition period”) he/she will lose the right to bring a claim against the boat owner at a later date.
As seen above, the Limitation of Liability Act restricts many rights afforded to injured boaters. The Act also has many pitfalls which will trap injured boaters and their attorneys who are unfamiliar with this area of law.
If you want to learn more about the Limitation of Liability Act, please read the following article authored and presented by the attorneys of Brais & Brais at the Southeastern Admiralty Law Institute: