Crew Employer Not Entitled to Limit

The U.S. Court of Appeals for the Eighth Circuit has ruled that the employer of a vessel's crew is not entitled to limit its liability for damages caused by the negligence of a crew member. The case involved a towboat which was owned by one company and crewed by the employees of another. The crewing company was responsible for routine maintenance, but the towboat owner was responsible for other work, including scheduling, insurance, repairs and relations with the coastguard. The towboat and its tow came into contact with a bridge on the Mississippi during a period of high water. The barges broke loose and damaged property owned by third parties, who filed claims. The owner filed a complaint in the federal court, seeking limitation of liability, and the crewing company joined in seeking limitation. The court found that the crewing company had not exercised sufficient authority over the vessel to meet the statutory requirement to qualify for entitlement to benefit under the Limitation of Liability Act. (Society of Maritime Arbitrators, New York, newsletter)