Following a catastrophic collision involving a ship and the Francis Scott Key Bridge in Baltimore, Grace Ocean Private Limited, the ship’s owning company, seeks to limit its financial liability using the Limitation of Liability Act of 1851, also known as the “Titanic Law.” This old law allows shipping companies to cap their damages at the value of the ship and its cargo, which for Grace Ocean amounts to $43 million, a figure significantly lower than the potential costs for bridge reconstruction. 

The Limitation of Liability Act was originally enacted to encourage investment in the shipping industry. It allows shipowners to limit liability to the value of their vessel and cargo, provided they were unaware of the negligence causing the accident. 

Critics argue the law is now outdated, offering undue protection to shipping companies at the expense of victims’ compensation. This was highlighted when the company responsible for the 2010 Deepwater Horizon oil spill attempted to apply the law to limit its damages, sparking legislative efforts to repeal or reform the act. However, significant lobbying from the oil and maritime industries prevented these reforms from passing.

Grace Ocean’s use of the Titanic Law is raising questions about the law’s ability to shield powerful industries from full accountability.