"SPILL Act" - Proposed Federal Legislation makes Changes to Maritime Statutes
By Jess G. Webster and Lafcadio Darling
Legislation currently working its way through Congress, called the “Securing Protections for the Injured from Limitations on Liability Act” (or “SPILL Act”) proposes significant changes to several old and established maritime stattues. In brief, the proposed SPILL Act amends the Death on the High Seas Act and the Jones Act to allow for non-pecuniary damages under certain circumstances. It also expands the scope of the Death on the High Seas Act, extending it to 12 miles offshore, instead of the current 3-mile limit. The proposed Act also has provisions requiring more transparency regarding discharges of pollutants in U.S. waters, and restrictions upon bankruptcy trustees to sell assets of a debtor that may be liable under the Oil Pollution Act of 1990.
There are two ways to view this proposed legislation. One perspective is that the changes to the DOHSA and Jones Act simply bring those statutes in line with the law of most states. As to the Limitation of Liability Act, federal courts rarely grant limitation in practice, so its repeal would have a limited effect on the rights of litigants.
On the other hand, it can be argued that this legislation represents a significant change. The changes to the DOHSA and Jones Act will undoubtely increase the amount of damages that can be claimed by seaman and others injured or killed at sea. Also, limitation of liability under federal law, whether or not it is granted, is a powerful tool that often drives consolidation and settlement of claims and its removal may cause more cases to be taken to trial.
Another factor to consider is perception. It is well known that foreign insurers and maritime businesses are notoriously fearful of American litigation, with its attendant costs and reportedly large verdicts. Although this fear is probably overblown, these legislative changes may feed these concerns and cause certain insurers or businesses to reconsider doing business in U.S. waters.
Whether these changes are a good or bad idea depends on who you ask, and is probably an unanswerable policy question.
In any event, vessel owners and maritime employers would be well advised to monitor this legislation and, if it passes, revisit their liability insurance coverage with their insurance brokers.
A more detailed explanation of the proposed SPILL Act can be found on our firm's website, where full text of the proposed SPILL Act can also be found.
