The High Court has authorised the Rena’s liability insurer to create a limitation fund.
The fund will provide security for claims – within a prescribed cap – in the (highly likely) event that the ship’s owners and managers are entitled to limit their liability to parties affected by the Rena grounding.
- there is already extensive documentation available
- to require more would be expensive and serve little purpose, and
- the information sought was out of proportion to the relatively small amount of Mr Lancaster’s claim.
- although Part 7 of the Act does not state that an owner may apply to the Court for an order authorising the constitution of a limitation fund, there are a number of provisions which refer expressly, or by necessary implication, to a limitation fund
- there is a drafting error in section 89 of the Act, in that it refers to s86(2) of the Act (which defines claims which are not subject to limitation of liability). The powers contained in s89 should also apply to cases where there is limited liability, and
- the Court has jurisdiction to order a willing ship owner to constitute a fund.