As predicted by our Florida Board Certified Maritime Attorneys, TOTE Maritime and Sea Star Lines have filed a Petition for Exoneration from or Limitation of Liability for any damages associated with the death of the 33 sailors aboard the El Faro. The lawsuit is pending in the Federal District Court for the Middle District of Florida. The aim of the offensive suit is to exonerate, or if that fails, cap the amount payable to the families of the merchant mariners who lost their lives in the service of the ill-fated cargo ship. The question for those following this catastrophe is why TOTE who publicly stated “Our focus has been on supporting and caring for the family members, loved ones, and friends of those aboard the El Faro“ is now seeking a Federal Court to exonerate it from any responsibility or limit the amount it must pay the families? The answer is simple. TOTE and Sea Star Lines’ marine insurer has taken control of the defense of the case and the shipping companies are required under contract to cooperate in this legal maneuver so that the insurance company could lessen the amount of money it has to pay the victims’ families.
Typically, a shipping company obtains liability insurance in the case of an injury or death occurring aboard its ship. The shipping company self-retains a portion of the exposure. This self-retention amount could range between one thousand to one million dollars. After that money is exhausted (either by paying defense attorneys or paying claims), the insurance company is responsible to pay the balance of the damage up to the policy limits (if there is a policy limit). As such, TOTE and Sea Star Lines’ exposure is already capped at their self-retention. Consequently, the Limitation of Liability lawsuit filed on their behalf really only benefits the insurance company.
This is the very reason why courts within the last thirty years have criticized the Limitation Act as being outdated. The original intent of the Limitation Act was to promote United States shipping investment by providing an incentive for businesses by allowing them to limit their financial exposure should a maritime disaster occur. With the common use of insurance in modern times, shipping companies already have limited exposure and the only ones benefiting from the Limitation Act are the big insurance companies.
As we have written in the past, the mere filing of a Petition for Exoneration from or Limitation of Liability does not automatically entitle TOTE and Sea Star Lines’ insurance company to limit its financial exposure. It must be proven by the greater weight of the evidence that the unseaworthy condition or negligent act that caused the El Faro to sink was unknown or could not be known by Sea Star Lines or TOTE. This is very hard to prove given the advanced age of the ship, the reported leaking and boiler issues and the fact that TOTE could have overridden the captain’s decision to try to out run Hurricane Joaquin.
Our Florida Board Certified Maritime Attorneys have vast experience in litigating limitation cases including ligating such cases in the Middle District of Florida and are available to provide assistance for those trying to navigate the pitfalls found within the Act.