US lawmakers propose legislation increasing shipowners' liabilities following accidents

Two US congressmen have proposed new legislation that seeks to amend an existing law that limits the liability of shipowners after an accident has occurred.

Speaking in Congress on Tuesday, August 13, Representative John Garamendi of California introduced the Justice for Victims of Foreign Vessel Accidents Act, which he co-sponsored with Representative Hank Johnson of Georgia.

Mr Garamendi said that, less than a week after the foreign-flagged containership Dali collided with the Francis Scott Key Bridge in Baltimore Harbor, the vessel's Singapore-based corporate owner filed in the US District Court for Maryland to limit its total liability for the bridge collapse and recovery effort to just US$43.7 million, valuing the vessel at US$90 million. In doing so, Dali's owner invoked a federal law enacted in 1851, limiting their legal liability for damages to the dollar value of the vessel and its cargo, minus salvage costs.

"This tragic accident, which killed six and injured two workers on the Francis Scott Key Bridge, calls into serious question why US law affords the owners of vessels flying foreign 'flags of convenience' any liability shield," Mr Garamendi remarked.

Foreign-flagged commercial vessels like Dali are typically registered under the laws of unscrupulous jurisdictions that lack any Navy, Coast Guard, or ability to inspect commercial vessels to ensure safety, prevent environmental degradation, or stop maritime labour abuses. Also, foreign ocean carriers or other vessel owners flying flags of convenience are often domiciled in offshore tax havens.

"For these reasons and more, US-flag commercial vessels are already at a competitive disadvantage globally," said Mr Garamendi. "The US judicial system should not protect foreign competitors to the detriment of victims and their families."

The Justice for Victims of Foreign Vessel Accidents Act would increase the liability for foreign-flagged vessels to up to 10 times the dollar value of the vessel and its cargo, minus expenses. This would ensure that victims and their families can hold foreign vessel owners accountable in federal court for wrongful death or personal injury claims, whereas current law only allows compensation for lost wages.

"Importantly, our bill would maintain the current liability threshold for US-flagged vessels including those compliant with the Jones Act, which unlike foreign-flagged vessels are subject to US law and inspected regularly by the Coast Guard and state regulators," said Mr Garamendi.

Lastly, the bill would apply the higher liability level for damages by foreign-flagged vessels to March 25, 2024, the night before the Francis Scott Key Bridge's collapse.