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University of Miami Law Review

Abstract

When the M/V Dali, a Singaporean-flagged container ship, struck Baltimore’s Francis Scott Key Bridge in March 2024, the foreign vessel owners turned to a centuries-old American statute that allows shipowners to limit their liability to the post-accident value of a vessel. The Limitation of Liability Act of 1851 (the “Limitation Act” or “Act”) was originally designed to protect and promote a nascent American shipping industry from the unpredictable perils of nineteenth-century seas. Today, however, it operates in a vastly different maritime economy, where foreign-flagged vessel owners routinely rely on the Act to shield themselves from full financial responsibility. In the wake of the Dali disaster, longstanding debates over the Act’s fairness and continued viability resurfaced, particularly after the owners sought to cap their liability at a mere fraction of the total billions of dollars in damages.

This Note argues that the Act, in its current form, is ill-equipped to stay afloat in the modern maritime industry. Yet outright repeal would be neither practical nor desirable given the United States’ dependance on global shipping and its diminished domestic shipbuilding capacity. Instead, this Note advocates for targeted reform to ensure victims receive fair compensation and foreign vessel owners are held accountable. Specifically, this Note proposes a tonnage-based insurance alternative for foreign-flagged vessels operating in U.S. waters. By tying financial responsibility to vessel size and maintenance, this system incentivizes safer operations, provides predictable coverage for victims, and keeps U.S. ports––and the flow of international trade––from running aground.

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