COMMONS AMENDMENT (Hansard, 23 July 1971)

§ LORD DRUMALBYN

My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 3. This Amendment and Amendment No. 4 go together and, with permission, I will deal with both. Perhaps I should first explain the effect which it is intended that the Bill should produce. Although a claimant will be free to sue 1307 the owner under Clause 1, or any other person, such as a negligent charterer, under normal rules of law, the total liability should not exceed the owner's limitation figure set out in Clause 4.

The reason for this is that these figures represent the limits of insurance available to the ship as a whole. To give effect to this intention, where the owner's limitation fund is set up under Clause 5 and consequently claimants have an actual fund available to them, two provisions are included in the Bill. In the first place, proceedings other than those against the owner for a share in the fund are to be stayed, by virtue of Clause 7. Secondly, if a person other than the owner or his insurer has actually made a payment in respect of oil pollution damage, then he will have a right to prove against the owner's fund. This right is given by Clause 5(4). However, as it was drafted at the time when the Bill left this House, this subsection was too wide in its scope, since it would have allowed any person who had made a payment for oil pollution damage to prove against the owner's fund, including, for example, the owner of a ship which has been in collision with the tanker and had been guilty of negligence. It is not intended that the owner of another ship should get any benefit from this subsection in these circumstances and the Amendments are designed to make this clear. Nor will a negligent charterer of the tanker itself, who is guilty of actual tort or privity, and so not entitled to limit his liability, get any benefit from this subsection. I am sure noble Lords will agree that this is a sensible limitation of the right conferred by subsection (4). I beg to move.