Navigating Maritime Law and Liability

McRae 2012 HeadshotBy Colin McRae, HunterMaclean

Special to the Savannah Morning News

The law governing the transportation of cargo at sea can be quite different than on land. That’s because maritime law—also known as admiralty law—involves a unique set of statutes, regulations and case law addressing liability issues.

Cargo shipped across international waters is governed by the Carriage of Goods by Sea Act (COGSA), which requires liability to be the carrier’s responsibility until the cargo is unloaded when the ship arrives at port. As a general rule, COGSA is enforced in the international transit of cargo, but not necessarily in domestic transit, unless the carrier has made specific arrangements to extend its applicability inland through the shipping documents.

Originally passed in 1936 as an enforcement of the international Hague Rules, COGSA generally stands for the proposition that ocean carriers are responsible for the items they transport by ship. However, liability is generally limited to $500 per package or–for goods not shipped in packages–per customary freight unit, unless the parties agree otherwise in writing. For oversized cargo like boats, cars and other large items, the rules on limitation on liability may also vary according to the size or weight of the cargo.

COGSA’s package limitation curbs the liability exposure of a carrier, which is important for shipping companies responsible for transporting high-value items across the open sea. However, the COGSA package limitation has been a matter of debate in numerous lawsuits involving cargo damage, especially with regard to the ocean transport of goods stowed in intermodal shipping containers.

In addition to unique limitations on liability at sea, maritime law also has different statutes of limitations compared to laws governing damage to goods transported on land. In general, the statute of limitations for ocean cargo claims can be significantly shorter, as COGSA carries a maximum statute of limitation of one year for cargo damage or loss. This means cargo-related claims must be filed within a finite window of time or else the right to file a suit may be lost.

It’s important for those involved in ocean carriage of goods to be fully apprised of the unique maritime laws concerning liability in order to minimize the chance of being part of a lawsuit. Strategic advance planning can help ensure compliance with relevant admiralty laws.

An experienced maritime attorney can help navigate the complex issues associated with assessing issues of liability at sea. Be sure to consult with an experienced maritime practitioner for assistance with any admiralty-related legal issues.