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Oil Spill May Bring Waves of Change to Maritime Law

Maritime law has often been described as complicated and cryptic. Many feel that this particular area of law bears little resemblance to domestic law and is obscure to those outside of its practice. For the most part, maritime law is ignored by legislators. That is, until there is a major disaster like the Deepwater Horizon oil spill. Now, everyone wants to get involved.

The Deepwater Horizon spill has brought maritime law into the headlines in the last few months, resulting in a wave of proposed legislation. Maritime insiders believe that this legislation could result in significant changes for the practice. Whether this is good or bad depends on who you ask. 

There is no consensus within the practice about the proposed legislation because there are so many interests at play. There are some attorneys that feel change is long overdue, and would welcome many of the proposed changes. These attorneys would include those that represent victims of maritime injury and their survivors. For them, current maritime laws are archaic, contradictory and unfair. Meanwhile, attorneys representing corporate clients feel that legislators are reacting too quickly and are not considering the effects of their actions: substantially increasing the cost of doing business at sea.

Many of the eccentricities of current maritime law have been revealed in the wake of the Deepwater Horizon spill. For example, the maritime industry enjoys liberal protection against liability as a result of early laws that were passed to encourage participation in the shipping industry. These laws were passed at a time when the industry was a lifeline for our country. In the wake of a great tragedy like the current oil spill, these limitations of liability seem objectionable. However, taking away these limitations upsets a balance that has been in existence for centuries.  

The Jones Act covers the majority of the workers killed on the Deepwater Horizon. Under the Act, the survivors can collect economic damages but not punitive damages. For example, the survivors would be able to collect damages for loss of support, but would be unable to collect loss of society damages that would substantially increase the amount of compensation. Some maritime experts find the Jones Act to be inconsistent with modern life and feel that it does not recognize the worth of relationships that victims shared with their survivors. Some in the legal community believe that the damages available to those injured or killed and their survivors should be expanded so they are comparable to those available in tort law.

Now there are several bills that seek to expand availability of damages, the most notable being the Securing Protections for the Injured from Limitation on Liability Act, also known as the SPILL Act. The SPILL Act would put an end to the Limitation of Liability Act, which is an 1851 law that limits maritime damages to the vessel's value at the end of the voyage. The SPILL Act was approved by the House of Representatives on July 1.   

Attorneys who represent plaintiffs with maritime injuries argue that the Limitation of Liability Act is outdated and is no longer useful as a means of promoting domestic shipping because now there is insurance to limit risk. However, maritime attorneys who represent corporate interests contend that doing away with traditional liability limitations would drive up insurance premiums. In turn, this premium increase would drive up the price of goods shipped by sea. Ultimately, the U.S. shipping industry would be unable to compete in the global market as almost every nation enjoys limited liability.

 Those who support the expansion of liability in maritime injury do not believe that insurance costs will go up much and insist that those who favor limited liability are using that argument as a smokescreen.

Although attorneys on both sides are uncertain as to how Congress will handle the many maritime law bills that have been introduced since the oil spill, they are all confident that there is a strong incentive for politicians to take swift action. Maritime law may never be the same.

Resource: The National Law Journal "After Oil Spill Disaster, Maritime Law Is All at Sea" 7/30/10

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