Part I Historical Background § 2 Limitation of Liability and Wilful Misconduct

Although liability under general tort and contract law principles is not limited to a certain amount, liability arising under a carriage contract is limited by the majority of international transport conventions and national legislatures. Undoubtedly, limitation of liability is one of the most important elements of shipping law since, today, the carrier’s liability insurance system is based exclusively upon it. However, it is also said that the limitation of liability is like “smoking” for the legislators, “difficult to justify, but also difficult to quit”. It is rightfully stated that the limitation of liability, which is nowadays considered to be a basic right rather than a privilege, is not a matter of justice, but merely a matter of public policy. Nevertheless, there are certain reasons given to justify the “essential departure from the current rules of civil law”; and this chapter will outline those reasons, together with their criticism and the reasons for breaking those limits.