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Legal Perspective

Legal Perspective by Tim Akpinar

The universe in which pleasure boats operate might be seen as a very different one than that in which commercial vessels operate. And some would be quite content to have these two worlds remain separate from one another. A tugboat mate who just completed an unpleasant transit of Hell Gate with an unwieldy fuel oil barge would probably be happy enough not to be greeted by a sailboat race off Stepping Stones in the fading light of a summer evening. Just the same, a family cruising up the East Coast would prefer to avoid crossing paths with a semi-submerged 20-foot shipping container torn from a cargo ship days earlier in a storm off Cape Hatteras.

But since pleasure boats and commercial vessels operate on the same navigable waters, they do share this common universe with one another. They also share a body of maritime laws that are common to both of them. These laws can be as relevant to a Catalina 30 as they are to a 900-foot cruise ship quietly gliding down the Hudson en route to Bermuda. Perhaps one of the most controversial of these maritime laws is the concept of limitation of liability in the context of boating accidents. Like other elements of maritime law, its roots date back to a very different day and age.

The notion of limiting liability, in and of itself, isn’t really such a radical notion. We see it in other areas of law. But when it comes to boating accidents and maritime law, limitation of liability can be met with passionate criticism. In a nutshell, it means the wrongdoers in an accident could possibly succeed in paying injured claimants no more than the value of their blameworthy vessel. Now if that vessel is a $2 million yacht, it really isn’t a cause for concern whether there will be enough money in the pot to cover the poor guest whose arm was broken in a collision. But if the vessel is a 40-year-old runabout worth $1,000, a seriously injured victim could be left out in the cold.

Many would jump up and holler that it’s unconscionable for a wrongdoer to benefit from the protection of such a law. And there are many reasons why they would be right. Yet, whenever there’s a news story about a boating accident, we’ll often read about one of the parties seeking to invoke this thing known as limitation of liability. In the realm of commercial vessels, it’s a fairly common practice.

Readers might remember CBS’s 60 Minutes coverage of El Faro, the cargo ship that sank in October 2015 when it encountered Hurricane Joaquin in the vicinity of the Bahamas. Tragically, thirty three people lost their lives in the sinking. Limitation of liability was raised by vessel interests in the aftermath of the sinking.

Over a decade earlier, we saw limitation of liability raised in another high-profile maritime case. The City of New York tried to invoke limitation of liability following the 2003 Staten Island Ferry accident involving Andrew J. Barberi. The ferry was traveling at around its normal sea speed when it stuck a concrete and steel pier with horrific results. Eleven passengers lost their lives and over sixty more were injured as a result of the tragic accident. The City stood to be able to limit its losses to around $14.4 million, the post-casualty value of the ferry, if its efforts to limit liability were successful.

What is the legal basis for allowing operators of pleasure boats to limit their liability, or “cut their losses,” to put it bluntly, in the same manner as operators of 100,000 ton ships? The answer lies in the Limitation of Shipowners’ Liability Act of 1851. This law holds that vessel owners may limit liability for losses to the post-casualty value of a vessel if the losses arose without their knowledge and participation. To put it loosely, if a vessel owner didn’t have control over the things that caused an accident, he or she could possibly succeed in limiting payments to injured victims to the post-accident value of the vessel. The full text of the law appears in 46 U.S.C. §§181 to 196.

One might argue that jet-skis and small skiffs are not ships, and therefore, their operators are not shipowners. Or at least they aren’t shipowners as envisioned by lawmakers who drafted this legislation in the nineteenth century. Why then should the law avail itself to shortchange victims in boating accidents? The explanation lies in reasons that arguably have little to do with sailboat racing, powerboat cruising, jet-skiing, or wakeboarding on Long Island Sound. I’ll address these things in the next issue, as we continue this discussion of a most controversial element of boating accident law.

Until then, I wish all of you the best for 2017, and hope the year ahead is good to you and your loved ones. Happy New Year! Tim

#January2017 #Archive

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