The constitution of a limitation fund is particularly useful where there are several claimants. In such a case the establishment of a fund acts as the provision of security for all claims collectively, thus permitting the release of the ship from detention and an assessment of the prospects of recovery for the various claimants.
However, where there is only one claimant the constitution of the limitation fund may not be necessary. In such a situation limitation of liability can be used as a defence. Even more, where liability is admitted it is more efficient to order the direct payment of the limitation amount to the sole claimant without the intermediate steps of constituting and administering a fund.
The 1996 LLMC provides as the default position that limitation of liability may be invoked without the constitution of a limitation fund.
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