The Limitation Act in the United States: A Deeper Look( continued from page 11)
A petition for limitation must be filed within six months from written notice of a claim. 46 U. S. C. § 30529; Admiralty Rule F( 1). Of course, a limitation petitioner does not need to wait for written notice in order to commence an action, but if written notice is given, such notice would trigger a six-month clock. If no written notice of a claim is presented, vessel interests still may be entitled to assert limitation as a defensive measure in an answer to a complaint, though as discussed below, it may not always be prudent to rely on the option for defensive limitation.
The Petition for Limitation Commencing a limitation action is similar to commencing a standard lawsuit— a limitation petitioner will need to set out the basics of its claim in the form of a complaint with basic details about the underlying incident and the vessel and the standards for limitation. The petition will also include a request for the court to grant an injunction requiring that all claims against the vessel be brought within the commenced action.
Upon commencing a limitation action, vessel interests must post security in an approved form equaling the value of the owner’ s interest in the vessel and pending freight. This can take the form of a P & I Club letter of undertaking(“ LOU”) or posting a bond into court. If the value of the vessel is zero, no security would be required.
Once the limitation fund is posted, the court will issue an injunction directing any claimant to file its claim in the limitation action and enjoining claimants from filing claims elsewhere against the vessel interests. The consolidated claims( which could be for property damage, injury, or death) directed into a single lawsuit, in a single forum, is known as a maritime“ concursus.” The concursus is a critical aspect of the Limitation Act and ensures that the claims will progress together in a single venue, and that all parties with a stake in the vessel interests’ application to limit liability will be treated equally.
A time limit for submission of claims will be set— there is no mandatory timeframe for claims to be filed, but a petitioner generally will make a recommendation to the court in its initial pleadings, and such timeframe will likely be determined by the complexity of the case and what is reasonable under the circumstances. Claimants will then file claims in the limitation action.
Procedure A petitioner can seek exoneration from, as well as limitation of, liability. This distinction will hinge on whether the claimants meet their initial burden of proving liability and whether an owner can prove its lack of privity or knowledge. If exoneration is not available, vessel interests still can limit based on the valuation discussed above.
Claimants are treated as plaintiffs with respect to the order of the proceedings, as they bear the burden of proof in the first instance.
A petitioner is not required to answer claims or plead affirmative defenses. There may be logistical and strategic reasons to file or not file answer( s) to the claims, and it also likely will depend on the number of claims filed. If many claims are filed, it may be needlessly complicated for a petitioner to answer each one.
Supplemental Fund As set forth in the Limitation Act, the amount available to pay injury and death claims is less than 420 times the gross tonnage(“ GT”) of the vessel,“ that portion shall be increased to $ 420 times the tonnage of the vessel.”
( continued on page 13)
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