Liability Of Shipowners Increased By Llmc 1996 Protocol

June 16, 2015

Last week shipping community has received briefing from IMO that limits of liability for maritime claims are increased as from 8th of June, 2015. This is not an unexpected regulation as limits in the Convention on Limitation of Liability for Maritime Claims, 1976 (LLMC Protocol 1996) were raised and adopted in 2012 by IMO`s Legal Committee.

The original reason for the convention on limitation of liability was to protect shipowners and their insurers by making a balance between successful claimants and shipowners. First limits were at high level, so claimants could  be reasonably compensated and in the same time shipowner`s liability can be insured. This supported industry as a whole and number of ships were increasing.

To refresh our memories let see to whom it is important:

Owner, manager or operator. Convention has not given right to limit to a mortgagee or ship-repairer, unless they take over the management and operation of the ship. It should be noted, that “manager” involve only the technical management, not crewing agent.

Charterer. It is important to note that the Convention allows a charterer to limit his liability only when acting as an owner (The Aegean Sea [1998] 2 Lloyd`s Rep 39). However, always reference should be made to Article 2 of the Convention as rights to limit always will depend on the type of a claim (The CMA Djakarta [2004] 1 Lloyd`s Rep 460 (CA)).

Salvor. Including the servants of the salvor.

Any person for whose act, neglect or default the shipowner or salvor is responsible. People who can be sued separately from the shipowner, e.g. stevedores, although they must prove they were hired by the shipowner or the charterer.

The liability insurer. When it comes for the insurer to be sued by a party who sustained a damage.
Below you may find how the limitation of liability is changed by Protocol 1996:

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