Admiralty Liability

Maritime or admiralty liability for events that happen out at sea can be a different ball of wax than liability from events that occur on land. The maritime laws are different; they do not always go by judicial decisions made in the past (legal precedents) and do not involve a trial by jury. The most glaring difference is the limits set for liability of a ship owner after a major accident, such as the ship sinking, colliding with another vessel, or causing an oil spill.

Thanks to a law passed way back in 1851, a ship owner can limit its liability to the value of the vessel after the event. So the owners of the Titanic got away with only paying out the value of the lifeboats, passenger fares, and charges for carrying freight, since that was all that was left after the sinking.

If a rust bucket boat hits your million dollar yacht and you both sink, you are not going to be able to collect much in damages if the incident occurred beyond the owner's "privity and knowledge," according to the 1851 Limitation of Liability Act.