The collision of a ship with a Baltimore bridge could lead to substantial damage claims, potentially amounting to hundreds of millions of dollars. However, legal experts suggest that the owner of the ship, Grace Ocean, may have a route to limit liability through a little-known 19th-century law previously used by the Titanic's owner.
Michael Sturley, a maritime law expert at the University of Texas at Austin’s School of Law, highlights that the ship owner is likely to face numerous lawsuits, including from the bridge's owner and individuals claiming personal injury or emotional distress. However, Sturley notes that damages claims are expected to be directed at the ship owner rather than the agency operating the bridge, as stationary objects are generally not considered at fault in collisions with moving vessels. Martin Davies, the director of Tulane University’s Maritime Law Center, adds that the 1851 law could mitigate the ship owner's liability by capping it at the post-crash value of the vessel plus any earnings from onboard freight, potentially reducing exposure to tens of millions of dollars.
Martin Davies emphasizes that the 1851 law was initially enacted to safeguard shipping giants from facing overwhelming losses due to maritime disasters. While acknowledging that an eight-figure sum would still be substantial, Davies suggests that it would be significantly less than the potential full claims total. He also remarks on the unusual nature of the casualty, particularly highlighted by footage showing the entire bridge collapsing. However, Davies notes that such accidents, involving ship collisions and resulting damage and injuries, are not uncommon in maritime contexts. Lawrence B. Brennan, an adjunct professor of law at Fordham University School of Law, anticipates that the operator of the Dali will likely initiate legal proceedings in the US under the 1851 law, drawing parallels to its utilization by the Titanic's owner in a Supreme Court case over a century ago.
The ship owner's insurance coverage, provided by the Britannia Protection and Indemnity Club, which is part of the International Group of P&I Clubs, is expected to assist in navigating the legal risks associated with the incident. With approximately 90% of the world's ocean-bound cargo insured by members of these clubs, they play a significant role in managing risks for ship owners. Proving whether the accident resulted from negligence or mechanical failure will be crucial in determining insurance claims, as highlighted by Bloomberg Intelligence.
According to Bloomberg Intelligence, Maersk may not bear liability for the incident, as the Danish company did not have a crew on board, and the ship was operated by a charter company. However, maritime insurance is expected to cover some of the associated costs. Despite this, uncertainty surrounding the total liabilities and the responsible parties is likely to impact Maersk's spreads in the short term, as noted by Stephane Kovatchev, a credit analyst with Bloomberg Intelligence.
Charles A. Patrizia, who heads an American Bar Association committee on marine law, explains that while federal courts have jurisdiction over maritime disputes, victims of the bridge strike may also have the option to seek damages under a clause of the US Constitution. This clause permits individuals injured in accidents at sea or with property claims to pursue lawsuits in state court.
Sturley, the UT Austin professor, notes that in cases like these, businesses often file lawsuits for interruption, claiming economic losses. However, these cases are typically unsuccessful due to laws that primarily limit monetary damages to those who were physically injured. Regarding the fate of the ship itself, owned by Grace Ocean, Singapore, a unit of Mitsui & Co., and managed by Singapore-based Synergy Marine Group, there may be a desire to remove it from the US. However, Brennan, the Fordham professor, suggests that the Maryland Transportation Authority will likely seek to detain the ship ("arrest") while pursuing claims and resolving damages. Consequently, the ship is expected to remain in place for an extended period.
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