While the origin of the maritime lien is obscure1 and its nature a matter of controversy, the maritime lien, nevertheless, serves a valuable function in the shipping industry. Maritime liens promote the extension of credit by providing a privileged claim to creditors. A maritime lien is a proprietary interest or right in a res, usually a vessel, which adheres to the vessel wherever she may go.2 The execution, i.e., foreclosure of the lien in an in rem proceeding in an Admiralty Court may result in the sale of the vessel in order to satisfy the underlying claim.

In order for the in rem procedure to be available, there must be a maritime lien. The only way a maritime lien can be executed is through the in rem process in an Admiralty Court.

Besides vessels, cargo and freight may also be the objects of maritime liens. In America, these objects, particularly vessels, have traditionally been considered to be separate legal entities. Over a century ago the United States Supreme Court held that a vessel could be held liable in rem for collision damages caused by the negligence of a compulsory pilot even when the shipowner was without fault.4 Similarly, the court held a vessel liable for damages caused by the negligence of a crew employed by a bareboat charterer.5 In both instances, there was in rem liability against the vessel, without in personam liability against the shipowner. What this means is that a shipowner may be liable because of his vessel, but only to the extent of his interest therein.

This form of limited liability results from the application of the personification theory. This theory may have developed due to the 19th century jurists’ aversion to the principle of liability without fault.6 Today’s jurists appear to have no such aversion. However, many are troubled by the legal fiction of a vessel’s personalty. In declining to expand the doctrine of the vessel as a “jural entity,” Judge Learned Hand said “an implied liability in rem, regardless of any personal duty of the owner, is a fiction, reaching far back into the early history of the law, and it has been often quoted ‘a fictio is not satisfactory ground for taking one man’s property to satisfy another man’s wrong.’”7

The personification theory has been referred to as merely a “literary theme”8 by legal writers and criticised in many U.S. Courts of Appeals.9 However, the U.S. Supreme Court has not overruled its prior holdings on the subject. Since the court has successfully avoided the issue in modern times, it is difficult to assess the current viability of the personification theory.