1 INTRODUCTION

1.1 JUSTIFICATION OF LIMITATION

The concept of limitation of liability is ancient, and its origin goes back to the 1600s. The owner of a ship was absolutely liable for the loss of goods, because he was a common carrier and liable by the custom of the realm, even though the goods were stolen without his fault or privity. As Lord Denning said in The Euresthenes ,1 that was settled in 1674 in the great case of Morse v Slue,2 and because the law operated so harshly on ship-owners, Parliament passed the first of the Merchant Shipping Acts (MSAs) (7 Geo 11 c 65) in 1734, saying that: a ship-owner was not to be held liable for any loss or damage occasioned by the master or mariners ‘without the privity and knowledge’ of the owner to an amount greater than the value of the ship. This was followed by a succession of MSAs, all of them directed to limiting the responsibilities of the ship-owner for the acts or defaults of his servants. The rest is history.