Subrogation and the Cargo-Manufacturer Question

Subrogation lets an insurer that has paid a loss step into its client's shoes and sue whoever caused it. After a car-carrier fire, the tempting target is the manufacturer of the vehicle that ignited. The first test case failed on proof: on 21 May 2026 the Stuttgart Regional Court dismissed a claim by Felicity Ace's owner and five marine insurers against Porsche, because they could not prove that a Porsche caused the fire.

How does subrogation work after a ship fire?

The insurer pays first and then pursues recovery in the owner's name. Under English law the principle is codified in section 79 of the Marine Insurance Act 1906, and every major marine market applies an equivalent. The insurer gets no better rights than the owner had: it must prove what the owner would have had to prove, against a defendant who can raise every defence the owner would have faced.

What did the Stuttgart court decide?

That the evidence did not show a Porsche caused the fire. The 26th Civil Chamber heard a producer-liability claim for nearly €30 million, brought by the Japanese owner of Felicity Ace and five marine insurers, alleging that a self-igniting lithium-ion battery in a Porsche Taycan started the February 2022 fire south-west of the Azores. The court was not persuaded that a Taycan battery was the source. A second action was filed in Braunschweig, and the Stuttgart judgment can be appealed.

Why is proof the obstacle?

Because a car-deck fire destroys its own evidence. The vehicle that started it is usually burned beyond examination, the deck around it collapses or is flooded, and a ship that sinks takes everything with it. Felicity Ace went down in about 3,000 metres of water. Every car-deck fire with a named cause so far stayed afloat long enough to be examined, and none of those causes was a traction battery. Without a surviving origin, a claimant has to prove causation from records made before and during the fire, and on Felicity Ace those did not exist at vehicle level.

Will the new EU product liability rules change this?

Less than it might seem. The revised Product Liability Directive, (EU) 2024/2853, applies to products placed on the market from 9 December 2026 and eases the claimant's burden with disclosure duties and presumptions of defect and causation where technical complexity makes proof excessively difficult. But its strict-liability compensation covers damage to property other than property used exclusively for professional purposes, which on its face excludes a commercial ship and a shipment of new cars. Commercial claimants will still rely largely on fault-based producer liability, where the burden of proof stays with them.

Sources

• 1. Stuttgart Regional Court (Landgericht Stuttgart), 26th Civil Chamber, judgment of 21 May 2026 — dismissal of the Felicity Ace owner's and five marine insurers' producer-liability claim of nearly €30 million against Porsche AG; parallel action filed in Braunschweig. Reported by Maritime Executive, gCaptain, Hansa and International Transport Journal.
• 2. Marine Insurance Act 1906 (UK), section 79 — rights of subrogation.
• 3. Directive (EU) 2024/2853 on liability for defective products — applies to products placed on the market after 9 December 2026; disclosure of evidence and rebuttable presumptions; compensable property damage excludes property used exclusively for professional purposes.
• 4. Companion analyses — 'Why Felicity Ace's Cause Was Never Proven' and 'Felicity Ace: Anatomy of an Unproven Fire'.