Code of Federal Regulations Title 32. National Defense § 32.752.3 Claims against the Navy

(a) Settlement authority. 10 U.S.C. 7622 provides settlement authority for damage caused by a vessel in the naval service or by other property under the jurisdiction of the Department of the Navy;  compensation for towage or salvage service, including contract salvage, rendered to a vessel in the naval service or to other property of the Navy;  or damage caused by a maritime tort committed by any agent or employee of the Department of the Navy or by property under the jurisdiction of the Department of the Navy. The limit on the Secretary's settlement authority is payment of $15,000,000. A claim which is settled for an amount over $15,000,000 is certified to Congress for payment.Section 7622 provides that the Secretary may delegate his settlement authority in matters where the amount to be paid is not over $1,000,000. Under the Secretary's delegation, settlements not exceeding $500,000 may be effected by the Judge Advocate General. Under the Secretary's delegation, settlements not exceeding $250,000 may be effected by the Deputy Assistant Judge Advocate General (Admiralty and Maritime Law).

(b) Settlement is final. The legislation specifically authorizes the Secretary to settle, compromise, and pay claims. The settlement, upon acceptance of payment by the claimant, is final and conclusive for all purposes.

(c) Settlement procedures. Where the amount paid is over $500,000, after agreement is reached with counsel or claimants, the procedure is to prepare a settlement recommendation for the approval of the Secretary of the Navy. When settlement has been approved, the voucher required for effecting payment is prepared. The settlement check is then exchanged, in keeping with the commercial practice, for an executed release. In some situations, where the exchange of documents is impracticable, a claimant is requested to forward the executed release by mail, on the understanding that the release does not become effective until the check is received in payment. Claims settled under 10 U.S.C. 7622 are paid out of annual Department of Defense appropriations.

(d) Limitation period. The Secretary's settlement authorization is subject to a two-year limitation. This limitation is not extended by the filing of claim nor by negotiations or correspondence. A settlement agreement must be reached before the end of the two-year period. If settlement is not accomplished, then the claimant must file suit under the appropriate statute to avoid the limitation bar. The agreement reached in negotiations must receive the approval of the Secretary of the Navy or his designee, depending on the amount involved, prior to the expiration of the two-year period.

(e) Matters in litigation. When suit is filed, the matter comes within the cognizance of the Department of Justice, and the Secretary of the Navy is no longer able to entertain a claim or to make administrative settlement.