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- In 1851, the U.S. government passed the Limitation of Liability Act, which was prudent at the time but complicates modern shipping accident cases.
- The 19th-century Limitation of Liability Act is commonly misused by modern corporations.
- Under this law, shipowners can limit their total financial liability to their ship’s value.
- Defeating these cases is complex and difficult, but an experienced maritime attorney can help establish a strong case and protect your right to compensation.

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Maritime law is hugely complex, with some laws going back centuries. One such law is the Limitation of Liability Act, a federal law originally designed to protect American shipowners.
In modern times, however, maritime workers who file an injury claim against their employer are surprised and alarmed to learn that, in response to their claim, their employer has filed a lawsuit under the Limitation of Liability Act. These lawsuits can be devastating for injured workers as they mean shipowners can limit their responsibility and the compensation they may have to pay.
Historically, the statute has been invoked to limit the liability of certain parties in the sinking of the Titanic and the Deepwater Horizon oil spill.
If you’ve been injured in a work-related maritime accident, it’s crucial that you work with an experienced attorney who understands the Limitation of Liability Act, can guide your case through the limitation action, and protect your right to full compensation.
What is the Limitation of Liability Act?
In cases involving maritime personal injury or wrongful death claims, the Limitation of Liability Act allows shipowners to file a petition for Limitation of Liability with the court to restrict the liability owed to you to the post-accident value of the vessel.
Worse still, if the vessel sank or was severely damaged and is now worthless, you could receive no compensation at all from a responsible party operating in the maritime industry.
The Limitation of Liability Act applies to all seagoing and non-seagoing vessels used to navigate United States water, including the ocean, lakes, and rivers. Vessels may include barges, canal boats, and lighters, as well as larger cargo ships and other types of ships used at sea.
It’s important to note that there is an exception to when an owner of the vessel can escape liability through the use of the Act — they cannot avoid responsibility when the injury occurs due to the owner’s privity of knowledge. This refers to whether the shipowner knew, or should have known, about the acts of negligence or unseaworthiness that caused the injury.
History of the Limitation of Liability Act
The Limitation of Liability Act of 1851 (commonly called the Limitation Act) was originally created to:
- Protect the American shipping industry
- Prevent shipowners from going bankrupt after large losses
At the time, maritime injury claims often exceeded the value of a vessel after an accident, and in the 19th century, investigation of maritime incidents was challenging for several reasons.
- Poor communication options (e.g., vessel owners often had no idea what was going on while a ship was at sea)
- Difficult to determine how, when, and why accidents occurred
- Hard to identify partial or wholly responsible party
- Shipowners lacked comprehensive insurance protection
- No liability-limiting statutes
These concerns no longer exist today. As a result, many criticize the Limitation of Liability Act, suggesting it’s antiquated and no longer necessary under modern maritime law.
How Shipowners Can Use the Limitation of Liability Act
Shipowners can assert their right to limit their liability in one of two ways:
- They can file a petition for Limitation of Liability in the federal court to find out whether the Act applies. As part of this lawsuit, the owner sues the victim of the accident. The owner can consolidate the claims of multiple injury victims into one lawsuit, and this is one of the benefits of filing a suit in federal court for owners.
- They can raise the Limitation of Liability Act as a defense if they are sued by the victim of an accident.
When a shipowner raises the Limitation of Liability Act, it can be crushing for maritime victims who may find themselves unable to recover full compensation for their injuries due to the owner’s limited liability. However, it’s important to know this doesn’t mean you can’t defend against the Act’s applicability to your case.
Defeating Limitation of Liability Act Cases
Vessel and shipowners typically try to use this act to limit liabilities owed to injured parties. It’s a difficult law to defeat; many will often opt to settle. Ways to defeat a shipowner trying to use the Limitation of Liability Act is by:
- Proving the vessel’s owner had prior knowledge of an unseaworthy condition
- Demonstrating the owner took part in a negligent act, leading to injury
- Showing the shipowner knew or should have known of any acts or omissions causing the injury
- Proving violations of safety regulations or construction standards occurred
To succeed in defeating this type of case, injury victims will want to work with an experienced Maritime attorney because this legal area is complex.
Case Studies
Even in the 20th and 21st centuries, companies have still been leveraging the Limitation of Liability Act to avoid paying compensation.
Titanic (1912)
The Titanic sinking in 1912 is one of the most famous maritime disasters in history. After the massive ship sank, killing more than 1,500 crew and passengers, the vessel’s owner, White Star Lines, successfully leveraged the Limitation of Liability Act to limit its liability.
Deepwater Horizon (2010)
Transocean, the owner of the Deepwater Horizon drilling rig that exploded in 2010, killing 11 workers, causing a massive oil spill, and sunk in the Gulf of Mexico, attempted to use the Limitation of Liability Act to limit its financial responsibility. In this case, Transocean was not successful, resulting in the company pleading guilty to violating environmental laws.
El Faro (2015)
In this case, the El Faro, owned by TOTE Maritime, sailed straight into Hurricane Maria, sinking and losing the entire crew (33 members). TOTE Maritime rapidly filed a lawsuit to protect itself against wrongful death cases by using the Limitation of Liability Act. Ultimately, like many other cases, TOTE Maritime would settle out of court with all 33 families.
Truth Aquatics (2019)
In 2019 tragedy hit in California when The Conception, a dive boat, ventured on a tour with passengers and caught fire. The 34 people sleeping below deck perished. What transpired next is an outrageous abuse of the Limitation of Liability Act. Not to mention, The Conception’s owner, Truth Aquatics, filed the limited liability claim four days after the accident.
Dali (2024)
In March 2024, the cargo ship Dali crashed into the Francis Scott Key Bridge in Baltimore, bringing down the entire bridge and killing six construction workers as the bridge immediately sank into the water.
Dali’s owner, Grace Ocean Ptd. Ltd., and the crew employer, Synergy Group, immediately preemptively filed under the Limitation of Liability Act to protect themselves from liability amounting to potentially billions of dollars. If successful, they’ll be responsible for a fraction of the damages suffered by claimants. Many will be watching this case.
Related reading: What Happens When You Have an Accident on International Waters?
Exceptions to the Limitation of Liability Act
It is common for an owner of a vessel to attempt to proactively invoke the Limitation of Liability Act before injury claims are filed, but a few exceptions exist where shipowners’ liability is not allowed under the act.
- Current and past-due wages the company owes seamen
- Ship and vessel mortgages
- Maintenance and cure benefits owed to injured seamen
- Environmental claims
Shipowners also cannot avoid liabilities associated with cargo damage, unearned freight, and certain other liabilities relating to salvage, towage, repairs, supplies, etc.
How an Experienced Maritime Attorney Can Protect Your Rights to Compensation
Cases involving Limitation of Liability are difficult and procedurally challenging. Defending against a petition for limited liability must be done correctly, or you lose any chance of recovering the full damages you are entitled to for your injuries.
That’s why it’s important to hire a maritime attorney who has a thorough understanding of the Limitation of Liability Act and experience working on cases involving the Act. At Montagna Law, we know shipowners may attempt to limit their legal accountability after seamen were involved in an accident while working aboard their vessel. Our attorneys will work with you to determine how the Act applies to your specific case and how to defend against its applicability.
If you would like to find out more about your legal rights after suffering an injury at work, take advantage of our free consultation. You can learn more about what benefits you may be entitled to and how our experienced maritime attorneys can help. We handle all our cases on a no-win, no-fee basis, which means you will pay attorney fees only if we are successful in getting you compensation.
Why Our Clients Trust Montagna Law
Clients along the U.S. East Coast have trusted Montagna Law for over 50 years. They know our maritime lawyers aggressively fight for their rights to help them get the compensation they need after suffering injury, whether they suffer minor wounds or catastrophic injuries and wrongful death.
Testimonials
“Mr. Montagna is an amazing attorney. His legal expertise and dedication exceeded my expectations. Mr. Montagna provided clear, and insightful guidance throughout the entire legal process. His professionalism and accessibility are unmatched in his field. he was very prompt if I had any questions and kept me informed at every stage. I would highly recommend Mr. Montagna to anyone in need of legal representation.” — Tyler
“I love that my concerns are ALWAYS addressed, and my phone calls are returned. Great staff!!” — SJ
Additional Resources
- How Injured Seamen Receive Compensation From The Jones Act: The Jones Act provides compensation rights to crew members suffering injury or illness while working aboard or in connection with a sea vessel.
- Maritime Accidents on International Waters: International waters are governed by Maritime Law and oversee both criminal and civil cases. Generally speaking, maritime laws take effect when there is no land within 20 miles of the ship or person on the open sea.
- What To Do After a Boating Accident: Suffering injury from a boating accident or collision can lead to life-altering injuries. If you find yourself in this situation, it’s important to understand your legal rights.
- Have you been hurt while working on the water?: If you or a loved one was hurt while working on the water, it’s a good idea to connect with an experienced maritime attorney as soon as possible to help determine a vessel owner’s liability.
Frequently Asked Questions About Offshore Injuries
Here are questions we receive from clients.
What Types of Ships Are Protected by the Limitation of Liability Act?
This act applies to any vessel sailing in U.S. waters, including but not limited to such vessels as barges, fishing vessels, tugs, yachts, and other recreational boats.
Is the Limitation of Liability Act Misused?
Yes, this act can be misused by shipowners, especially larger corporations, to limit the compensation injured seamen in their employ can receive.
Free and Confidential Evaluation of Your Case
If you want to learn more about your legal rights after suffering an injury at work, take advantage of our free consultation. You can learn more about what benefits you may be entitled to and how our experienced maritime law firm can help.
Transparent attorney-client relationships are very important to us. We handle all maritime claims on a no-win, no-fee basis, which means you will pay attorney fees only if we successfully get you compensation.
To receive a free case evaluation, call Montagna Law at 877-622-8100 or fill out our online contact form.

Written By Lance Jackson
Lance A. Jackson graduated Cum Laude with a Bachelor of Arts in Humanities at Hamden-Sydney College in 1983, before graduating from the College of William and Mary’s Marshall-Wythe School of Law in Williamsburg in 1986. His areas of practice are Personal Injury Claims, Auto Accident and Trucking Litigation, Jones Act and Maritime Litigation, Admiralty Law, Third Party Claims and Premises Liability.
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