Skip to main content

A cargo ship named Dali lost power and rammed into the Francis Scott Key Bridge last week. This collision caused the 1.6-mile expansion bridge to collapse into the Patapsco River, closing access to the Port of Baltimore and costing at least six lives. The ship’s owner is now citing a pre-Civil War law to minimize liability after the Key Bridge collapse.

The legal ball starts rolling with a filed petition

The Dali is owned by Singaporean firm Grace Ocean Private Ltd. The company filed a petition on Monday to limit their legal liability in the Key Bridge collapse. This petition is routine but an important step in the procedure for such cases. A federal court in Maryland will decide who pays and how much for this costly disaster. The ship’s managing company, Synergy Marine Pte Ltd., is also part of the petition to mitigate costs.

What pre-Civil War law allows minimizing liability in this case?

An 1851 maritime law allows the companies to seek to limit their liability. This limit is the value of the vessel’s remains after a casualty. While most of us have never heard of such a law and might think it ridiculous, its used in many maritime disaster cases.

According to James Mercante, a New York City-based attorney with three decades of maritime law experience, “This is the first step in the process now all claims must be filed in this proceeding.”

Key Bridge Collapse on the Dali
Key Bridge Collapse on the Dali | Getty Images

How much do the two Singaporean companies think they should have to pay?

The joint filing seeks a cap of $43.6 million in liability costs. The estimated value of the Dali is $90 million, and there was more than $1.1 million in freight onboard the ship. Under the cited law, the companies can deduct the repair costs of $28 million and $19.5 million in salvage costs.

$43.6 million is a drop in the bucket for the Key Bridge collapse

Morningstar DBRS predicts the bridge collapse costs could reach as much as $2 billion to $4 billion. This would exceed the previous insured marine loss record of $1.5 billion for the 2012 shipwreck of the Costa Concordia cruise ship.

How much will it cost to rebuild the Key Bridge

Experts estimate the costs to rebuild the 1.6-mile expansion bridge could be at least $400 million. If the new bridge has a new design, this cost could rise to nearly twice that figure.

In addition to the costs of the bridge, ship, and salvage, six people died in this collapse. This creates costs for wrongful death claims. These costs could be significant but depend on several factors.

Should the ship’s owner seek to limit their liability in the Key Bridge collapse or take on the entire cost of damages, rebuilding, and wrongful death claims?

Source: Fortune