Admiralty Jurisdiction and Practice

Page 287


Limitation claims


8.1 The concept of limitation of liability is simple. It is that a shipowner or some other person connected to the operation of a ship (such as a charterer or manager1) is entitled to limit his liability in respect of certain maritime claims arising out of an occurrence to a particular amount, irrespective of the total amount of such claims.2 The rationale usually cited in English case law and commentaries for the right to limit liability is the public policy in encouraging shipping and trade.3 This is said to override the competing public policy in compensating the victims of wrongdoing in full. So, for example, Lord Denning MR in The “Bramley Moore”4 said5:

“The principle underlying limitation of liability is that the wrongdoer should be liable according to the value of his ship and no more. A small tug has comparatively small value and it should have a correspondingly low measure of liability, even though it is towing a great liner and does great damage. I agree that there is not much room for justice in this rule; but limitation of liability is not a matter of justice. It is a rule of public policy which has its origin in history and its justification in convenience.”

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