The Key Bridge Collapse: The Law You Don’t Know Could Come Back to Bite You

Legal Alert – for PORT OPERATORS, FREIGHT BROKERS, and SHIPPERS

If your property meets with the unimaginable, is the law on your side to sort it out in the aftermath?

When a maritime disaster ruins and shuts down your port, it’s too late to then ask what compensation you’re legally entitled to. And for those of you in shipping by land, air, or sea; there are parallel concerns here for you, too!

After Baltimore’s Francis Scott Key Bridge was struck by a runaway cargo ship and collapsed last month, the damage was immense, and one of the most active US shipping ports was effectively disabled, reaping massive supply chain disruptions, and untold damage to international trade.

To even attempt to make things right here, the costs will be astronomical, and parsing out who owes what to whom will be a daunting task. But surely, primary blame should focus on the owners/ operators of the ship that lost control and collided with the bridge.

Well, those very people have just “asked a federal judge in Maryland to exonerate them from liability for any related losses or damages.”

How could they make such a ludicrous plea? It’ll be stuck down immediately, right? Not so fast.

In their petition the vessel owners, Grace Ocean and Synergy Marine, cite a limitation of liability enjoyed by vessel owners in the US Code; and if you’re a port owner, here’s what you need to know about this:

·????? The limitation applies per se to seagoing vessels by this statute

·????? Liability to the owner is capped at the “value of the vessel and pending freight” (in this case, $43 million, nothing near adequate to cover the damages and losses if the owners are found liable).

·????? Liability for personal injury or death (here six construction workers were killed and two injured) is also limited, to $420 times the tonnage of the vessel

The City of Baltimore is contesting Grace Ocean’s limitations of liability claims, but the way things look now, the vessel operators have the stronger position.

Absent Congress revamping US maritime law, which has had these limitations just about forever, port operators as well as government and private infrastructure owners/ operators must face reality, which is that these limitations of liability are out of sync with current costs.

Thus, the worse the condition of the ship, which would seem to increase the likelihood of a mishap, the LOWER the liability limit in the event of an accident.

This conundrum isn’t limited to shipping on the high seas. ?It applies to over-the-road vehicles as well. As a shipper or freight broker hiring trucks, if you’re going with a bargain fleet:

·????? Cheaper carriers usually have cut-rate insurance.

·????? Their policies could be with insurers no one’s heard of, that could be on the verge of receivership for all you know.

·????? They could be carrying policies replete with coverage issues arising from “listed autos only,” or “expressly approved drivers only,” provisions buried in the boilerplate.

·????? If your load is double brokered, and your cargo is lost, it may have no insurance at all!

With these factors in mind, the insurance certificate the motor carrier gave you may not be worth the paper it’s printed on.

Anyone in shipping, working at any scale, has a lot to protect. You MUST be operating with a PROACTIVE RISK MANAGEMENT mindset, and the first step is to get informed as to what those risks are.

I founded Commerce Law Partners with the express goal of keeping businesses like yours ahead of these things. Any questions or issues along these lines? Feel free to get in touch!

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Contact Jonathan Scott and Commerce Law Partners – Prepare to Win!