Claimants with increasing frequency in the last few years have laden their cases on vessels flying the banner of “products liability” and sailed into the harbours of refuge provided by the American Courts sitting in Admiralty where the claims have generally been well received1. Products liability theories permit recoveries against defendants such as shipbuilders, manufacturers and sellers of equipment and machinery used aboard ships, as well as ship repairers and repairers of components manufactured and sold for shipboard installation.

These defendants do not have the protection, for example, of the Hague Rules or the Carriage of Goods By Sea Act in actions for cargo damage, or the Rules of the Road in collision cases. Moreover, presentation of claimant’s prima facie case against such defendants is becoming ever more simple, since with the adoption of breach of warranty and strict liability theories, claimants need not prove that the defendants were negligent.

This article will outline the present state of the law of products liability in United States Courts sitting in Admiralty with the purpose of illustrating the exposure to which defendants in these areas may be subjected. The article will also point out that any shipbuilder, repairer, manufacturer or seller of shipboard equipment based abroad whose contact with the U.S. involves any efforts whatsoever to do business here, will probably be subjected to the jurisdiction of the American Courts. Once in the U.S. Courts, difficult choice of law problems can arise and foreign-based defendants can suddenly find themselves subject to the theories and liabilities imposed by the U.S. maritime law of products liability.

It is not the purpose of this article to present an exhaustive listing of all the authorities nor to attempt in every instance to reconcile the decisions. Rather, this article attempts to present a practical summary of the law in this area and some of the pitfalls which can trap claimants and defendants alike when engaged in litigation.

The article will also point out the difficulty, if not outright impossibility, of predicting in advance of a casualty the limits on the exposure of those subject to jurisdiction of the U.S. Courts. This problem is caused by the difficulties in resolving choice of law problems, and the unsettled nature of the case law on products liability in the Admiralty Courts. While all of these problems can generally be solved as each casualty occurs, such after-the-fact analysis comes too late to assist commercial interests in appraising the magnitude of the risks to be incurred in a venture and to take the steps necessary to protect themselves from such exposures2.