Baltimore bridge crash: $102m payout explained

Grace Ocean and Synergy Marine have settled for $102m over the Baltimore bridge crash. Credit: Jerry Jackson / The Baltimore Sun / Tribune News Service / Getty Images

The first of several legal cases against the owners and operators of the MS Dali, which catastrophically collided with the Francis Scott Key Bridge in Baltimore, Maryland, has been settled, according to the federal Department of Justice (DoJ). 

Two Singaporean companies, Grace Ocean and Synergy Marine, agreed to pay nearly $102m to settle a civil suit launched by the DoJ to recover the money spent on the disaster response and bridge debris recovery operation. 

“Nearly seven months after one of the worst transportation disasters in recent memory, which claimed six lives and caused untold damage, we have reached an important milestone with today’s settlement,” said principal deputy associate Attorney General Benjamin C. Mizer, following the resolution.

“Thanks to the hard work of the Justice Department attorneys since day one of this disaster, we were able to secure this early settlement of our claim, just over one month into litigation.”

According to Robert Khachatryan, CEO and founder of US-based Freight Right Global Logistics, the settlement was in line with expectations and followed the DoJ’s stated intentions to ensure US taxpayers are not left to pay the bill for industrial accidents. 

“Considering the extensive damage and tragic loss of life caused by the bridge collapse, this outcome aligns with other high-profile settlements where similar violations led to substantial penalties. The DOJ’s firm stance on full compensation ensures compliance without burdening taxpayers with disaster response costs,” he explains. 

José Cot, attorney at law firm McGlinchey Stafford, agrees that the settlement was likely a “favourable” one for the DoJ, but he says it could also benefit the shipowner and operator going forward. 

“Given the significant litigation costs going forward, negotiating an early settlement was in the US’ interest to maximise its recovery…  By negotiating an early settlement, the US secures compensation and avoids the significant costs of protracted litigation,” Cot explains. 

Cot says that the decision to settle was likely influenced by the public nature of the Dali crash, and the efficient clean-up operation by authorities. 

“The response in clearing the wreck and bridge debris from the navigable channel and reopening the Port of Baltimore was very efficient and is now complete, resulting in a readily ascertainable and documented claim,” he explains. 

However, according to Cot, the MS Dali’s owner and operator could have decided to settle with the DoJ to remove the federal authorities – and their lawyers – from civil action brought by other claimants, such as the State of Maryland. 

“From the shipowners’ perspective, settling with the US is also a tactical decision that removes the DoJ attorneys and resources from the court-designated lead counsel group for claimants.”

Grace Ocean and Synergy Marine filed a suit to limit their liabilities over the incident to $43.7m, to which the DoJ’s claim of more than $100m was made. 

Although it would appear the settlement contradicts the intention of the claim, Cot says that the action is “still pending” because other claims against the companies are still progressing through the court system. 

“The settlement is not an adjudication of the limitation action," Cot explains.

"The court will set forth litigation phases of the case, and a schedule to complete discovery and prepare the case for trial, including consideration of claimants and damages/losses, filing of dispositive motions, etc.”

Due to the nature of the out-of-court settlement between the parties, the outcome will not change US case law. However, as other suits are continuing, it is very possible the full legal outcome of the Key Bridge crash will impact several areas of maritime law. 

“Given the magnitude and impact of the casualty, the number and diversity of claimants and the complexity of the issues, cases such as this are always likely to have an important impact on maritime law and to provide lessons for the future,” Cot says.

Khachatryan says that the large settlement and ongoing court cases show a “growing scrutiny” on the maritime sector, which could lead to the tightening of shipping company’s compliance. 

“The resolution of this case sets a precedent in maritime law, highlighting accountability and full financial responsibility for environmental and infrastructural damages. The size of the payout may prompt maritime operators to reinforce compliance practices,” Khachatryan says. 

“With growing scrutiny on high-stakes maritime incidents, this case could shape future legal expectations around corporate responsibility and public safety in the US market.”

According to Cot, two legal areas would be watched particularly closely by maritime stakeholders –the class action claims filed in the limitation proceeding and economic loss claims.  

“Courts have generally held that class actions should not be allowed in limitation proceedings as they are inconsistent with the purpose of the Limitation Act," Cot explains. "Moreover, courts have generally held that claims for economic loss are not cognisable in maritime law unless the claimant can demonstrate that it had a proprietary interest in the damaged property.”

"The settlement should reinforce the principle that corporations must bear full responsibility for the economic and human costs of their operations," Khachatryan surmises. "It should guide the maritime industry toward stricter adherence to environmental and operational regulations.”