The plaintiffs sued the defendants for personal injuries caused by a collision at sea. The collision occurred in Guernsey territorial waters. The plaintiffs were passengers in a boat, of which the second defendant was the helmsman. The first defendant was the helmsman of the other boat. There was a trial as to liability and quantum and the defendants were held jointly and severally liable to the plaintiffs. The Jurats apportioned liability between the defendants at 70% to the first defendant and 30% to the second defendant. Costs were not dealt with. The defendants were entitled to limit their liability under art 7 of the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976). The first defendant invoked limitation under art 10, without constituting a limitation fund; the second defendant constituted a fund pursuant to art 11 of the LLMC 1976.

The plaintiffs then sought a ruling on whether their costs in establishing their claims are affected by the limitation of liability provided for in the LLMC 1976. They argued that costs were distinct from their substantive claims under art 2.1.a of the LLMC 1976, whereas the first defendant submitted that costs should be treated as part of the substantive claims and therefore subject to limitation of liability.

Held: The claims for costs were not part of the substantive claims and were therefore not subject to limitation of liability under the LLMC 1976.

The LLMC 1976 was given the force of law in England and Wales by Sch 4 to the Merchant Shipping Act 1979 (UK). Certain provisions of the Merchant Shipping Act 1979 (Guernsey) Order 1980 Order in Council 1980, including Sch 4, were extended to the Bailiwick of Guernsey. By virtue of the LLMC 1976, the defendants were entitled to limit their liability to the plaintiffs. Each of the defendants was entitled to limit his liability to a total of 166,667 units of account in respect of claims for personal injury and 83,333 units of account in respect of any other claims.

The issue appears to be one which is not directly covered by authority. The ordinary meaning of the relevant words 'claims in respect of ... personal injury ... and consequential loss resulting therefrom' in art 2.1.a of the LLMC 1976 is a reference to claims under the substantive law relating to liability for damages for personal injury. These substantive claims are subject to limitation of liability. Where, as here, the pleader of such a claim invites the court to exercise its discretion to award costs in his favour should the matter proceed to a hearing, he does so because the traditions of pleading require a plaintiff to notify the defendant that he intends to make an application for costs should circumstances arise where it is appropriate to do so. Contrary to the submission made by the first defendant, the pleader does not include a reference to a claim for costs because it is part of his substantive claim for damages or consequential loss. Article 2 of the LLMC 1976 does not limit liability for the costs of litigation. Articles 11 and 13 of the LLMC 1976 are dependent upon art 2 and are of no assistance in construing it.