Forty-seven years after the Francis Scott Key Bridge opened in Baltimore, it collapsed into the Patapsco River following an allision by the Dali, a Singaporean owned container ship, on March 26, 2024.[1] The fatal crash took the lives of six construction workers who were working on the bridge when the Dali struck.[2] In addition to the lives lost, the economic cost is rising daily, with an estimated $15 million lost per day due to the port closure.[3] While clean up and recovery efforts will take time for a disaster of this magnitude, initial investigations are underway and legal claims are already being filed.[4] One week after the allision, Grace Ocean Private Ltd., the owner of the Dali, and Synergy Marine Private Ltd., the manager of the Dali, jointly filed a petition for exoneration from or limitation of liability up to $43.6 million.[5] This amount is based on an estimate that the ship’s value is up to $90 million, with over $1.1 million expected from freight income.[6] However, significant deductions are included—at least $28 million for repairs and $19.5 million for salvage costs.[7] The petition follows from the 1851 Limitation of Liability Act, a maritime law that allows shipowners to limit their financial liability for certain maritime accidents to the value of their vessel after the voyage, plus any freight money earned on that trip.[8]

The Limitation of Liability Act offers shipowners a potential shield against catastrophic financial losses, but it comes with a two-step burden of proof.[9] Initially, the burden falls on the claimant to establish negligence on the part of the shipowner or the vessel’s unseaworthiness.[10] This could involve proving that the shipowner failed to maintain the vessel properly, ignored crew warnings about malfunctions, or acted recklessly.[11] If the claimant successfully demonstrates negligence or unseaworthiness, the burden then shifts to the shipowner seeking limitation.[12] The shipowner must prove they lacked both privity and knowledge.[13] This means demonstrating they had no prior awareness of the problems that caused the accident and were not involved in creating them.[14]

Additionally, they must show they exercised due diligence and could not have reasonably known about the issues beforehand.[15] Essentially, the shipowner argues that the cause of the accident was outside their control and could not have been prevented despite their best efforts.[16] Decisions concerning limitation of liability fall under admiralty law and are made by a judge, not a jury.[17] Grace Ocean Private Ltd. is insured by Britannia, a member of a Protection and Indemnity (P&I) club, which is a consortium of twelve insurance providers that collectively share the financial burden of maritime incidents.[18] This risk-sharing mechanism offers a layer of security for both the insured and Britannia itself.[19]

Furthermore, P&I clubs are often backed by extensive reinsurance pools.[20] These pools function as a global safety net, comprised of well-capitalized reinsurance companies.[21] In the event of large- scale claims, such as those that will likely arise from the Dali incident, these reinsurers can contribute additional funds, with the reinsurance pool for Britannia and its fellow P&I club members boasting a maximum claims capability of $3.1 billion.[22] This multi-layered insurance structure demonstrates the intricate web of entities that can be involved in mitigating liability within the maritime industry.[23]

Following the petition for exoneration from or limitation of liability, U.S. District Judge James K. Bredar issued an order establishing the claims process for the Dali incident.[24] The order mandated that all parties with claims against the Dali’s ownership and management entities must file their claims by September 24, 2024.[25]

A tidal wave of claims will flood the court system for years to come because of the Key Bridge collapse, and this is only the beginning. Maryland’s maritime legal landscape will be forever transformed as a result.

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Sienna Duran-Kneip is a third-year J.D. Candidate at the University of Baltimore School of Law and a Comments Editor for Law Forum. Sienna graduated from Chapman University in 2019 with a double major in Economics and Spanish, and a minor in Italian Studies. She works as a Paralegal/Case Manager at Kreindler & Kreindler, LLP, specializing in September 11th Victim Compensation Fund claims. During the summer of 2023, Sienna interned with Human Rights First on the D.C. Refugee Representation team. At UB, she serves as the Secretary of the International Law Society, and Vice-President for the Latin American Law Student Association. Upon completion of her J.D., Sienna plans to continue her legal education abroad, pursuing an LLM in international human rights law.

[1] Kyle Fisher, This Day in Maryland History: Francis Scott Key Bridge Opens in 1977, PRES. MD. (Mar. 26, 2024), https://preservationmaryland.org/francis-scott-key-bridge-opens/.

[2] Victoria Arancio et al. Baltimore Key Bridge Collapse: Victims Include Dad of 5, ABC NEWS (Apr. 5, 2024, 7:59 PM), https://abcnews.go.com/US/baltimore-bridge-collapse-missing-construction- workers/story?id=108535622.

[3] What is the Economic Cost of Baltimore’s Key Bridge Collapse?, AL JAZEERA (Mar. 30, 2024), https://www.aljazeera.com/news/2024/3/30/what-is-the-economic-cost-of-baltimores-key-bridge-collapse.

[4] Michael Kunzelman & Rebecca Boone, Cargo Ship’s Owner and Manager Seek to Limit Legal Liability for Deadly Bridge Disaster in Baltimore, ASSOC. PRESS (Apr. 1, 2024, 8:30 PM), https://apnews.com/article/baltimore-bridge-collapse-liability-litigation-16de885948e769566e7181ffa35b1753.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Limitation of Liability Act, KREINDLER LLP., https://www.kreindler.com/library/shipowners-limitation- of-liability-act (last visited Apr. 7, 2024).

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Limitation of Liability Act, supra note 9.

[16] Id.

[17] Id.

[18] Lorraine Mirabelle, Loss Could Be Largest Ever for Sea Industry with Claims Likely to Top $1B, Deciding Who Pays What Will Take Years Key Bridge Collapse, BALT. SUN (Apr. 5, 2024), https://www.baltimoresun.com/2024/04/03/key-bridge-largest-maritime-losses/.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23] Id.

[24] Mirabelle, supra note 18

[25] Id.