On June 8, 2015, amendments to the Marine Liability Act (“MLA”) (SOR/2014-98) brought into force in Canada higher limits of liability under the Convention on Limitation of Liability for Maritime Claims (1976) (the “LLMC”), as amended by the Protocol of 1996 (the “Protocol”).
By way of background, the ability of ship owners to limit their liability is long-established and in English law, dates back to the Responsibility of Shipowners Act (passed in 1733). It has been stated that the limitation of a ship owner’s liability is a matter of policy, not of justice. Limitation exists in order to promote investment in an enterprise deemed to be of general benefit to society by facilitating trade and recognizing the large capital investment required in order to be a ship owner and the risks attendant upon the enterprise.
The modern international law relating to limitation of liability stems from predecessor conventions to LLMC in 1924 and 1957, which allowed a ship owner to limit liability for property damage or personal injury (including fatalities). Under the 1957 Convention, if the ship owner could establish that the loss occurred without their “actual fault or privity” or, practically speaking, where the incident occurred as a result of the momentary error or omission of those aboard the ship without any involvement of the ship owner.
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