Limiting liability for non-seagoing ships

by William Wilson

The Convention on Limitation of Liability for Marine Claims 1976 as amended by the 1996 Protocol (the “Convention”) enables a shipowner to limit their liability in respect of loss of life and/or personal injury in accordance with the rules of the Convention. A “shipowner” is defined as “the owner, charterer, manager and operator of a seagoing vessel”.

There has been much case law to determine the definition of a “seagoing” ship but the Merchant Shipping Act 1995 extends the Convention to all “ships” whether seagoing or not. The effect of this provision is to significantly widen the definition of “ship” such that it includes “any structure (whether completed or in the course of completion) launched and intended for use in navigation as a ship or part of a ship”[1].

In respect of the phrase “used in navigation”, the Courts have established that a ship must make “ordered progression by water from one place to another” rather than simply be “used for having fun on the water without the object of going anywhere”[2]. Accordingly, a jet-ski may be used on the sea but is not seagoing and is not a ship. However, Owners of small inland waterway ships may be able to limit their liability even though their ships are not “sea-going”, provided it can be established that they are used in navigation.

Thomas Cooper recently brought a successful claim on behalf of the Owners of a 9 metre motor yacht departing from a marina on the River Thames. This was not a sea-going ship but a General Limitation Decree was established in the Admiralty Court which permitted Owners to limit their liability in respect of significant injuries sustained by five passengers following an explosion.

The limitation fund was reduced further as the motor yacht had a gross registered tonnage of less than 300 tons as determined by Part II Schedule 7 of the Act. The Convention also provides that where the limitation fund available in respect of personal injury is insufficient to meet the claims in full, the fund available for other claims, including loss or damage to property, will be available for any unpaid balance of the personal injury claims. Accordingly, the limitation fund was established at 1,500,000 SDR (approx. £1,600,000 at the time of writing) in respect of the five personal injury claims.

Owners and Insurers of small, non-seagoing vessels should carefully consider the Convention before settling claims arising from incidents on board or in direct connection with the operation of the vessel. In certain circumstances, it is possible to limit liability, even where an incident occurred on a small ship in internal waters.

If you have any questions about this article, please contact William Wilson or James Severn whose details appear below.

[1] Para 12 of Pt II of Sch 7 to the 1995 Act.
[2] R v Goodwin – [2005] EWCA Crim 3184

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About the contributors

  • James Severn Partner

    James is a partner in our Shipping Group and joint head of our Sports Team. He has a broad commercial litigation and dispute resolution practice with a particular focus on shipping, insurance disputes and personal injury/fatality claims...

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  • William Wilson Solicitor

    William specialises in litigation and is a solicitor in our Shipping and Commercial Litigation Group.

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