Canada: Limitation of liability


Published: 2 June 2014

The Association is grateful to Messrs. Bernard LLP, Vancouver, Canada for contributing to this update.

In a recent decision the Supreme Court of Canada has re-affirmed the integrity of the right to limit liability under the Convention of Liability for Maritime Claims of 1976, commonly known as the "Limitation Convention 1976".

The court, in over-turning both a first instance and an appeal court decision, spoke of the convention limits as having been intended to be "virtually unbreakable", even in circumstances where the actions of the party seeking to limit its liability were more than negligent.

In the attached article, Thomas S. Hawkins and David S. Jarret of Bernard LLP provide a succinct overview of this significant - and for shipowners very welcome - decision.

In the meantime, it is worth noting that Canada applies the 1976 Convention with the increased limits under the 1996 Protocol. Canada also has a specific local limitation sum for vessels under 300 GT, in particular CAD1 million for loss of life or personal injury and CAD500,000 for other claims (such as the property damage discussed in the recent Supreme Court case).

Furthermore, it must be kept in mind that this decision only applies to matters over which the Canadian courts have jurisdiction, and in other jurisdictions courts have approached the issue of breaking limitation quite differently. For any matter where limitation of liability may be an issue, specific local legal advice will very likely be necessary.

For further information, Members are asked to contact the Association.