Limitation Of Liability For Maritime Claims

Legal news
Published 06.07.2004

Bjorn Flåm, Skuld Bergen, reviews changes to the limitation regime which came into force in May

As members will know, shipowners have a right to limit liability for the overall claims arising out of a single incident. This concept is commonly referred to as Global Limitation, and most maritime nations have adopted either the rules laid down by the 1957 or 1976 Conventions regarding such limitation.

In 1996 a Protocol to the 1976 Convention was agreed upon, and this came into force on 13 May 2004. The aim of the 1996 Protocol is to increase the amount owners may limit, as the value of the limits agreed in the 1976 Convention have decreased by approximately 59%.

10 nations have adopted the 1996 Protocol:

Australia, Denmark, Finland, Germany, Malta, Norway, Russian Federation, Sierra Leone, Tonga and United Kingdom.

The countries which have adopted the Protocol have implemented it in different ways, and Norway will for a certain period of time maintain a parallel system. In these countries the 1976 limits will continue to apply, but only for parties from states which have adopted the 1976 convention, but which have not adopted the 1996 Protocol.

The new limits, compared to the 1976 regime, are as follows:

1. Loss of life and personal injury claims.

1996 Protocol (as from 13 May 2004):

a) Passengers onboard the ship seeking to limit liability:

SDR 175.000 multiplied by the no. of passengers which the ship is certified to carry.

b) Other personal injury (crew, stevedores etc.)

For ships not exceeding 2000 gross tons – 2 million SDR

For each ton from 2,001 to 30,000 gross tons – 800 SDR

For each ton from 30,001 to 70,000 gross tons – 600 SDR

For each ton in excess of 70,000 gross tons – 400 SDR

 

 1976 Convention:


a) Passengers onboard the ship seeking to limit liability:

SDR 46.666 multiplied by the no. of passengers which the ship is certified to carry, with a cap of SDR 25.000.000.

b) Other personal injury (crew, stevedores etc.)

For ships not exceeding 500 gross tons – 330,000 SDR

For each ton from 501 to 3000 gross tons – 500 SDR

For each ton from 3,001 to 30,000 gross tons – 333 SDR

For each ton from 30,001 to 70,000 gross tons – 250 SDR

For each ton in excess of 70,000 gross tons – 167 SDR

 

2. Any other claim.

1996 Protocol (as from 13 May 2004):

For ships not exceeding 2,000 gross tons – 1 million SDR

For each ton from 2,001 to 30,000 gross tons – 400 SDR

For each ton from 30,001 to 70,000 gross tons – 300 SDR

For each ton in excess of 70,000 gross tons – 200 SDR

 

1976 Convention:


For ships not exceeding 500 gross tons – 167,000 SDR

For each ton from 501 – 30,000 gross tons – 167 SDR

For each ton from 30,001 to 70,000 gross tons – 125 SDR

For each ton in excess of 70,000 gross tons – 83 SDR

 

The 1996 Protocol also changes the procedure for amending the amount shipowners are entitled to limit. In the future, and in order to facilitate a swifter amendment to the limits, a procedure by which contracting states will have to lodge an objection to changes, rather than providing formal accessions, has been implemented. Any new protocol will then come into force 18 months after it has been agreed upon, unless a certain percentage of contracting states explicitly rejects the new protocol.

It is however important to note that defendants can still rely on other limitation regimes such as the Hague/Visby and Athens Conventions to achieve lower limits. However, members should note that as regards the Athens Convention, the 2002 Protocol to the Athens Convention will eventually introduce much higher limits (up to SDR 400.000 per passenger).

Bjorn Flåm
Senior Vice President, Head of Syndicate
Skuld Bergen

 

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