No Claim? No Standing. ' The Importance Of Filing A Claim Under LOLA.

• Published date: 26 September 2022
• Subject Matter: Transport, Marine/ Shipping
• Law Firm: Eckland & Blando
• Author: Mr Robert Dube

A party inexperienced with Limitation of Liability Act ("LOLA") proceedings may find themselves in deep water by assuming that the procedural rules applicable to ordinary civil cases applies equally to a case brought under LOLA.¹ While there are certainly many similarities, one critical difference with LOLA is the requirement to bring a "claim"; or, more precisely, the distinction between an "answer" and a "claim" under LOLA and Rule F of the Supplemental Rules.² The problem arises when a "plaintiff" serves an inexperienced party (i.e., attorney) with a "complaint" under LOLA, who, in turn, files the seemingly appropriate "answer" to that complaint within the allotted time. But unfortunately, under Rule F of the Supplemental Rules, that alone does not preserve the "defendant's" right to recovery for the underlying incident.³ Instead, courts have been clear that the injured party must file and articulate a claim for recovery, not merely an answer to the plaintiff's allegations in its complaint. The consequence of this omission could unfortunately be default judgment.⁴

This procedural issue spawns from Rule F of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. Under Rule F, after a plaintiff files a LOLA complaint and brings the associated motions, the court must issue a notice directing all potential claimants to file a claim "on or before a date to be named in the notice."⁵ The claim must specify "the facts upon which the claimant relies in support of the claim, the items thereof, and the dates on which the same accrued."⁶ Notably, however, Rule F separates a claim from an answer to a LOLA complaint.⁷ While the claim is necessary to create a right to recovery, an answer is only required if "a claimant desires to contest either the right to exoneration from or the right to limitation of liability[.]"⁸ In summary, under Rule F, the claim and answer serve two distinct purposes, and only a claim is a necessary filing.⁹

This may seem simple enough. But many hopeful claimants have nonetheless failed to distinguish these filings and have been left without an avenue to recovery. As a recent example, in Matter of G&J Fisheries, after the plaintiff moved for default on all potential claimants who failed to timely file a claim, a party argued that his answer, file a day prior to the deadline, constituted a "claim" to avoid default.¹⁰ The Massachusetts District Court rejected this argument, stating that it "is unaware of any...