This was a damages claim brought by the relatives of four deceased crew members of the beam trawler Margaretha Maria. The deceased were 'share fishers'.The vessel capsized and sank with the loss of all hands in November 1997. The owners contended that they were entitled to limit their liability for claims for loss of life under s 185 of the Merchant Shipping Act 1995 (UK) (the Act) which enacted the LLMC 1976. If this was correct, their liability would be limited to just under GBP 150,000.

Article 2.1.a of the LLMC 1976 stipulates that limitation of liability applies to claims in respect of loss of life. Article 3.e provides that the Convention does not apply to claims by servants of the shipowner if they are employed based on a contract of service, and under the law governing this contract the shipowner is not entitled to limit its liability in respect of such claims. Section 185(4) of the Act stipulates that the provisions of the LLMC 1976 do not apply to any liability in respect of loss of life or personal injury caused to a person who is on board the ship in question or employed in connection with that ship under a contract of service governed by the law of any part of the United Kingdom. Therefore, the applicability of limitation under the LLMC 1976 depended on whether the deceased fishers were employed under a contract of service or engaged in the joint venture as independent contractors.

In the High Court Aikens J held in favour of the claimants, finding that the owners were not entitled to limit their liability as each of the deceased had been employed under a contract of service. The owners appealed.

Held: The owners' appeal is allowed.

The Court of Appeal found that the fishers in the present case were not employed under contracts of service and therefore held that the owners enjoyed limitation of liability under the LLMC 1976. The Court referred to the following grounds for this conclusion:

1. the owners did not pay any sort of fixed periodic remuneration to the crew;
2. the crew bore the losses of the venture if it was unsuccessful, as the income from the sold fish was distributed between the owners and the crew on a 60%/40% basis, then the crew agreed on how to distribute their 40% share among themselves;
3. the proceeds of a trip were divided and paid out, not by the owners of the vessel, but by a third party who sold the fish at auction;
4. the apportionment of 40% payable to the members was divided without the owners' involvement;
5. each of the deceased paid taxes and national insurance contributions based on the fact that they were self-employed;
6. different social security regulations in the United Kingdom treat share fishers as self-employed and not as employees under a contract of service;
7. the crew and not the owners decided when, where, and how long to fish;
8. the crew and not the owners controlled the vessel while fishing;
9. the members of the crew provided some personal gear for the venture; and
10. each crew member contributed to the venture through their experience, skill and knowledge in the running of the vessel and searching for fish.