Reconstruction

Limitation to the value of the ship was an innovation in English law, coming into effect in a restricted way as early as 1733 by Statute and becoming more widely accepted within the maritime law during the 19th century. Towards the close of the 19th century, however, a radical change was introduced, included within the first comprehensive Merchant Shipping Statute – the Merchant Shipping Act 1894 (the ‘parent’ of the subsequent series of Merchant Shipping Acts stretching right down to the present day). This was a huge piece of legislation, the like of which had never before been seen in the maritime field in Britain, and consisted of eight parts and a total of over 700 sections. Only one of those sections was devoted to limitation of liability. This was Section 503. The radical nature of the change in the system of limitation was from the then existing method of value of ship, to a method based on the ship’s tonnage. The tonnage method was felt to be more constant and predictable as a ship’s tonnage does not vary during the lifetime of the ship, unless due to reconstruction, whereas the value almost certainly does, in that it decreases steadily as the ship ages. What was meant by ‘tonnage’ was defined in Section 503 itself. ‘The gross tonnage without deduction on account of engine room, provided that there shall not be included in such tonnage any space occupied by seamen or apprentices and appropriated to their use…’ In modern parlance we freely refer to a ship’s limitation tonnage. This is what is meant by Section 503. Until December 1986 the United Kingdom’s law of limitation of shipowners and others had been based on the International Convention of 1957 and was contained both in the original Merchant Shipping Act 1894 (Section 503) and in the 1958 Amendment to the 1894 Act, the later Act being the Merchant Shipping (Liability of Shipowners and Others) Act 1958. The 1958 Act was designed to modify Section 503 of the 1894 Act and to incorporate the provisions of the 1957 Convention into English law. The 1957 Convention has now been replaced by the 1976 (London) Convention on Limitation of Liability.