Baltimore Bridge collapse ship owner invokes pre-Civil War law used when the Titanic sank

Two people were killed and another four remain missing and are presumed dead following the Dali’s crash – JIM WATSON/AFP via Getty Images

The shipping company behind the Baltimore Bridge collapse is seeking to cut its liabilities from as much as $3bn (£2.41bn) to $43m by invoking a pre-Civil War law.

Baltimore’s authorities are locked in a court battle with the Singaporean owners of the container ship, which crashed into the Francis Scott Key Bridge last month.

Shipowners Grace Ocean and Synergy Marine have invoked an antiquated maritime law to cap their liability from the disaster to about $43m despite estimated costs of between $1bn and $3bn.

The arcane law, which was also invoked after the Titanic sank in 1912, was introduced before the Civil War to allow shipowners to cap liability to the value of their cargo. The Baltimore ship, known as Dali, was carrying more than 4,600 containers on route to China when it crashed into the bridge.

Two people died and four people are missing and presumed dead from the disaster.

Lawyers for Baltimore City have sought to stop the move by Grace Ocean and Synergy Marine, accusing them of negligence and saying they should bear more responsibility for the disaster.

Legal filings on Monday from Baltimore accused the Dali of being “clearly unseaworthy”.

The battle is a blow for Lloyd’s of London insurers, who were expecting a rapid resolution of claims.

Lloyd’s chief executive John Neal last month signalled there could be a smoother payout process because of the comprehensive coverage attached to the bridge and the vessel.

Russell Merrett, co-founder and chief underwriting officer at Lloyd’s insurer Inigo, said the legal wrangling meant there was more uncertainty over how the case would play out.

“It isn’t being settled as crisply as proposed,” he said. “It looked like a pretty straightforward case. Regrettably it will take some time to settle and allocate responsibility to the appropriate parties.

“When I look at something similar, like the cost of Costa Concordia, it took at least five years to stabilise the final loss amount.”

The Concordia was the most costly maritime disaster in history although the Baltimore collapse is expected to top this.

Inigo is one of about 100 or so reinsurers who insure the International Group of P&I Clubs, an insurance mutual which insures 90pc of the world’s shipping.

The International Group of P&I Clubs provided the insurance cover to the Dali. Mr Merrett said overall Inigo had minimal exposure to the Baltimore claim

A spokesman for the Grace Ocean and Synergy Marine said using the limitation mechanism was common in the maritime industry.

He said the law was invoked to “allow for all potential claimants seeking damages arising out of the incident to submit their claims in one case” and make it more efficient.

He declined to comment on Baltimore’s claims of negligence while the investigation into the collapse is ongoing.

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