Could Changes To Maritime Law Be On The Horizon?
In 2019, 34 people died on a dive boat that caught fire. In 1851, Congress passed the Limitation of Liability Act which was meant to encourage investment in the shipping industry. If a lawsuit is brought against a vessel owner, the owner can immediately invoke bankruptcy-like protections that harm plaintiffs. In the case of the California suit, those protections limited the liability of the boat owner to the value of the vessel itself. Essentially, a shipping company cannot be sued for more than the value of their vessel.
The company that owns the dive boat is facing 34 wrongful death lawsuits filed by grieving families. With the potential award limited to the value of the boat, the plaintiffs may receive a few thousand dollars each. In most personal injury cases, the defendant would be liable regardless of their assets. The company would later have the option of filing for Chapter 7 or Chapter 11 bankruptcy, but at least the plaintiffs have the satisfaction of knowing that the company will not survive the negligence without extreme pressure.
That brings up another issue. While a company can declare bankruptcy to discharge most personal injury judgments (or at least get them reduced to something affordable) a company may not discharge personal injury judgments that allege gross negligence so long as that negligence involved accusations of willful misconduct. Maritime companies face no such issues.
A change to the 170-year-old law could change that, but the discussion is still in its infancy.
The Small Passenger Vessel Liability Fairness Act of 2021
Right now, the legislation is just a name buttressed by the California tragedy. Essentially, the new law would hold small passenger vessels like tour boats and dive boats to a different standard than large transport vessels, cruise ships, and whatever else. Why? Well, the cruise ships and large vessels cost a lot of money, upwards of $260 million (for a vessel that can accommodate 500 passengers). If all 500 died, they’d still be entitled to $500,000 each.
Small passenger boats, on the other hand, can cost anywhere from a tenth of that price to one-thousandth. Obviously, the families of the 34 slain passengers will not be able to get a fair judgment in court because the rules prevent them from doing so.
Tragedy has a funny way of spurring forth the right kind of change. The dive boat incident in California came with accusations against the dive boat company of extreme negligence. However, the plaintiff’s recovery is limited to the value of the boat because of legislation that was meant to preserve investment in the shipping industry. Tour boat companies have been benefiting from legislation that was never meant to protect them. Hence, the law would be changed to reflect its original intentions as opposed to being broadly applied to any commercial boat on navigable waters.
Talk to a Miami Maritime Lawyer Today
Miami admiralty & maritime lawyer Michael F. Guilford represents passengers and crew in civil complaints against their employer or a boat owner. Call today to schedule a free consultation and discuss your situation in more detail.