Uniformity

The original limit on the damages was the ship. An owner could simply abandon the vessel to the potential judgement creditors. The claimants divided the value of the vessel pro rata, a procedure not unlike bankruptcy. The value of the pending freight was included in the assets available to pay claims. Modern versions of limitation generally make the shipowner liable in effect for twice the value of the ship because he could lose the vessel and an equal amount in third party liability. The latest Conventions use a pecuniary value per ton of displacement, sometimes with a lower and upper limit. The right to limitation has been subject to certain bars. Thus, if the owner were in privity with the wrongdoer, or had knowledge of the condition causing the harm when he could have cured it, the right to limit liability could vanish. Of course, an intentional injury attributable directly to the owner acts as a bar to the right to limit. There are two main interests that are served by the incorporation into a State’s legal system of limitation laws: The narrow self concern of the shipping world or, a broad, reasonable consensus that recognises the needs of all participants to an incident from which results loss or damage.  The needs of the shipping industry are threefold: Uniformity – the ship must know before she sails the laws to which she will be subjected. Shipowners and others associated with maritime trade, as well as governments, also have a powerful interest in uniformity. Ideally, of course, there should be one law for all ports, all cargoes and all ships. Predictability – the essence of the legal requirements for those who are in the affected business, is whether, within an acceptable range, the outcomes of liability claims are sufficiently predictable to allow an actuarially found premium to be based on it. Even if self-insurance is a realistic option, some consistency of outcomes is required. Fairness – the results of the limits and conditions of recovery must approximate to justice. There is a level of compensation that is both affordable for carriers and fair to the victim.