Limited liability fund for maritime claims – what you need to know 

Maritime shipping is an activity associated with high risk. Accidents, collisions, environmental pollution, or damage to cargo can lead to claims amounting to hundreds of millions of euros. This is why maritime law includes a limited liability fund for maritime claims. 

What is the role of the fund?

The limited liability fund for maritime claims serves a protective function for both the shipowner and the creditors. Instead of being liable with all of their assets, the shipowner deposits a certain sum of money or provides appropriate security to the court. Creditors can then use this amount to satisfy their claims. 

This solution increases the predictability of liability and allows maritime activities to be conducted without the risk of immediate insolvency. As a result, all victims have access to a common “pool of money”, and the distribution is proportional. The shipowner is assured that their financial liability will not exceed the limit set by law. 

What is the amount of the fund?

The amount of the fund is not determined arbitrarily. It is calculated according to the international rules of the London Convention LLMC, which Poland adopted in its Maritime Code. The amount primarily depends on the ship’s tonnage and the type of claims. 

This solution aims to maintain balance: creditors are not left without protection, and the shipowner does not bear unlimited liability. 

How is the fund created 

Most often, the fund is established by the shipowner or their liability insurer. It can also be created by the charterer or another entity responsible for the specific incident. 

In Poland, the responsible party submits a request to the district court – Economic Department for Maritime Matters – to create the fund. They then deposit the required amount into the fund or present a bank or insurance guarantee for the corresponding amount. 

Once the fund is established, the court publicly announces it and invites creditors to file claims within a specified period. The court then reviews the claims and ultimately distributes the fund among creditors. If the total amount of claims exceeds the fund’s value, payments are made proportionally. 

What is the fund?

The limited liability fund is a compromise between the interests of the shipowner and the injured parties. In practice: 

• the shipowner protects themselves from unlimited liability and the risk of bankruptcy,
• creditors are guaranteed that their claims will be considered in a uniform, transparent procedure,
• the court oversees the fair distribution of funds. 

What are the limitations of the fund 

It is important to note that the fund does not always fully satisfy all claims. In the case of very serious disasters, such as large-scale environmental pollution, the total value of damages may far exceed the fund’s value. In such cases, the victims only receive a portion of the amount owed to them. 

This system is often criticized as being too favorable to shipowners. On the other hand, the liquidation of the fund could completely paralyze maritime activity, as no one would be able to bear unlimited liability. 

Summary 

The limited liability fund for maritime claims is a mechanism that ensures a balance between protecting the interests of the victims and maintaining the stability of shipping companies. Thanks to it, a maritime accident does not necessarily mean the end of a shipowner’s business, and creditors have access to a fair and supervised distribution of funds. Although not always fully satisfactory for everyone, the fund is one of the most important legal instruments that keep global shipping in motion.