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NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D.C. 20543, of any typographical or other formal errors, in order that
corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
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No. 94-788
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CITY OF MILWAUKEE, PETITIONER v. CEMENT
DIVISION, NATIONAL GYPSUM
COMPANY, et al.
on writ of certiorari to the united states court
of appeals for the seventh circuit
[June 12, 1995]

  Justice Stevens delivered the opinion of the Court.
  This is an admiralty case in which the plaintiff's loss
was primarily attributable to its own negligence.  The
question presented is whether that fact, together with
the existence of a genuine dispute over liability, justified
the District Court's departure from the general rule that
prejudgment interest should be awarded in maritime
collision cases.

                      I
  Respondents are the owner and the insurers of the
E. M. Ford, a ship that sank in Milwaukee's outer
harbor on Christmas Eve of 1979.  At the time of this
disaster, the Ford was berthed in a slip owned by the
city of Milwaukee (City).  In the course of a severe
storm, she broke loose from her moorings, battered
against the headwall of the slip, took on water, and
sank.  She was subsequently raised and repaired.
  In 1980 the Ford's owner, the Cement Division of
National Gypsum Co. (National Gypsum), brought suit
against the City, invoking the District Court's admiralty
and maritime jurisdiction.  The complaint alleged that
the City had breached its duty as a wharfinger by
assigning the vessel to a berthing slip known to be
unsafe in heavy winds and by failing to give adequate
warning of hidden dangers in the slip.  The plaintiff
sought damages of $4.5 million, later increased to $6.5
million.  The City denied fault and filed a $250,000
counterclaim for damage to its dock.  The City alleged
that National Gypsum was negligent in leaving the ship
virtually unmanned in winter, with no means aboard for
monitoring weather conditions or summoning help.
  In 1986 the District Court conducted a 3-week trial on
the issue of liability.  Finding that both National
Gypsum and the City had been negligent, the court
determined that the owner bore 96% of the responsibility
for the disaster, while the City bore 4% of the fault.
Given the disparity in the parties' damages, a final
judgment giving effect to that allocation (and awarding
the damages sought in the pleadings) would have
essentially left each party to bear its own losses.
  Respondents took an interlocutory appeal from the
District Court's ruling.  The Court of Appeals for the
Seventh Circuit agreed with the District Court's conclu-
sion that both parties were at fault, and that the
owner's negligence was -more egregious- than the City's,
but it rejected the allocation of 96% of the responsibil-
ity to the owner as clearly erroneous.  Cement Div., Na-
tional Gypsum Co. v. Milwaukee, 915 F. 2d 1154, 1159
(1990), cert. denied, 499 U. S. 960 (1991).  After making
its own analysis of the record, the Court of Appeals
apportioned liability two-thirds to National Gypsum and
one-third to the City.  Id., at 1160.
  Thereafter the parties entered into a partial settle-
ment fixing respondents' damages, excluding prejudg-
ment interest, at $1,677,541.86.  The parties agreed
that any claim for interest would be submitted to the
District Court for decision.  A partial judgment for the
stipulated amount was entered and satisfied.
  Respondents then sought an award of over $5.3
million in prejudgment interest.  The District Court
denied respondents' request.  It noted that -an award of
prejudgment interest calculated from the date of the loss
is the rule rather than the exception in cases brought
under a district court's admiralty jurisdiction,- App. to
Pet. for Cert. 21a, but held that special circumstances
justified a departure from that rule in this case. The
court explained:
     -In the instant case the record shows that from
the outset there has been a genuine dispute over
[respondents'] good faith claim that the City of
Milwaukee was negligent for failing to warn the
agents of [National Gypsum] (who were planning to
leave the FORD unmanned during the Christmas
holidays) that a winter storm could create conditions
in the outer harbor at Milwaukee which could
damage the ship.  The trial court and the court of
appeals both found mutual fault for the damage
which ensued to the ship and to the [City's] dock.
The court of appeals ascribed two-thirds of the
negligence to [National Gypsum]. Thus, in this
situation the court concludes that [National Gyp-
sum's] contributory negligence was of such magni-
tude that an award of prejudgment interest would
be inequitable.-  Id., at 22a.
  The Court of Appeals reversed.  31 F. 3d 581 (CA7
1994).  It noted that prior to this Court's announcement
of the comparative fault rule in United States v. Reliable
Transfer Co., 421 U. S. 397 (1975), some courts had
denied prejudgment interest in order to mitigate the
harsh effects of the earlier rule commanding an equal
division of damages whenever a collision resulted from
the fault of both parties, even though one party was
only slightly negligent.  In the court's view, however,
after the divided damages rule was -thrown overboard-
and replaced with comparative fault, mutual fault could
no longer provide a basis for denying prejudgment
interest.  31 F. 3d, at 584-585.  The Court of Appeals
also read our decision in West Virginia v. United States,
479 U. S. 305, 311, n. 3 (1987), as disapproving of a
-balancing of the equities- as a method of deciding
whether to allow prejudgment interest.  31 F. 3d, at
585.
  The Court of Appeals' decision deepened an existing
circuit split regarding the criteria for denying prejudg-
ment interest in maritime collision cases.  Compare,
e. g., Inland Oil & Transport Co. v. Ark-White Towing
Co., 696 F. 2d 321 (CA5 1983) (genuine dispute over
good-faith claim in mutual fault setting justifies denial
of prejudgment interest), with Alkmeon Naviera, S. A. v.
M/V Marina L, 633 F. 2d 789 (CA9 1980) (contrary
rule).  We granted certiorari, 513 U. S. ___ (1995), and
now affirm.

                     II
  Although Congress has enacted a statute governing
the award of postjudgment interest in federal court
litigation, see 28 U. S. C. 1961, there is no comparable
legislation regarding prejudgment interest.  Far from
indicating a legislative determination that prejudgment
interest should not be awarded, however, the absence of
a statute merely indicates that the question is governed
by traditional judge-made principles.  Monessen South-
western R. Co. v. Morgan, 486 U. S. 330, 336-337
(1988); Rodgers v. United States, 332 U. S. 371, 373
(1947).  Those principles are well developed in admi-
ralty, where -the Judiciary has traditionally taken the
lead in formulating flexible and fair remedies.-  Reliable
Transfer, 421 U. S., at 409.
  Throughout our history, admiralty decrees have
included provisions for prejudgment interest.  In Del Col
v. Arnold, 3 Dall. 333, a prize case decided in 1796, we
affirmed a decree awarding the libellant interest from
-the day of capture.-  Id., at 334.  In The Amiable
Nancy, 3 Wheat. 546 (1818), we considered a similar
decree.  In augmenting the damages awarded by the
lower court, we directed that the additional funds should
bear prejudgment interest, as had the damages already
awarded by the lower court.  Id., at 562-563.  The
Amiable Nancy arose out of the -gross and wanton-
seizure of a Haitian vessel near the island of Antigua by
the Scourge, an American privateer.  Id., at 546-547,
558.  In his opinion for the Court, Justice Story ex-
plained that even though the -loss of the supposed
profits- of the Amiable Nancy's voyage were not recover-
able, -the prime cost, or value of the property lost, at
the time of the loss, and in case of injury, the diminu-
tion in value, by reason of the injury, with interest upon
such valuation, afforded the true measure for assessing
damages.-  Id., at 560 (emphasis added).  We applied
the same rule in The Umbria, 166 U. S. 404, 421 (1897),
explaining that -in cases of total loss by collision
damages are limited to the value of the vessel, with
interest thereon, and the net freight pending at the time
of the collision.-  (Emphasis added).
  The Courts of Appeals have consistently and correctly
construed decisions such as these as establishing a
general rule that prejudgment interest should be
awarded in maritime collision cases, subject to a limited
exception for -peculiar- or -exceptional- circumstances.
See, e. g., Inland Oil & Transport Co., 696 F. 2d, at
327; Central Rivers Towing, Inc. v. Beardstown, 750
F. 2d 565, 574 (CA7 1984); Ohio River Co. v. Peavey Co.,
731 F. 2d 547, 549 (CA8 1984); Alkmeon Naviera, 633
F. 2d, at 797; Parker Towing Co. v. Yazoo River Towing,
Inc., 794 F. 2d 591, 594 (CA11 1986).
  The essential rationale for awarding prejudgment
interest is to ensure that an injured party is fully
compensated for its loss.  Full compensation has long
been recognized as a basic principle of admiralty law,
where -[r]estitutio in integrum is the leading maxim
applied by admiralty courts to ascertain damages
resulting from a collision.-  Standard Oil Co. v. South-
ern Pacific Co., 268 U. S. 146, 158 (1925) (citing The
Baltimore, 8 Wall. 377, 385 (1869)).  By compensating
-for the loss of use of money due as damages from the
time the claim accrues until judgment is entered,- West
Virginia, 479 U. S., at 310-311, n. 2, an award of
prejudgment interest helps achieve the goal of restoring
a party to the condition it enjoyed before the injury
occurred.  The President Madison, 91 F. 2d 835, 845-846
(CA9 1937).
  Despite admiralty's traditional hospitality to prejudg-
ment interest, however, such an award has never been
automatic.  In The Scotland, 118 U. S. 507, 518-519
(1886), we stated that the -allowance of interest on
damages is not an absolute right.  Whether it ought or
ought not to be allowed depends upon the circumstances
of each case, and rests very much in the discretion of the
tribunal which has to pass upon the subject, whether it
be a court or a jury.-  See also The Maggie J. Smith,
123 U. S. 349, 356 (1887).  Although we have never
attempted to exhaustively catalogue the circumstances
that will justify the denial of interest, and do not do so
today, the most obvious example is the plaintiff's
responsibility for -undue delay in prosecuting the
lawsuit.-  General Motors Corp. v. Devex Corp., 461
U. S. 648, 657 (1983).  Other circumstances may
appropriately be invoked as warranted by the facts of
particular cases.
  In this case, the City asks us to characterize two
features of the instant litigation as sufficiently unusual
to justify a departure from the general rule that pre-
judgment interest should be awarded to make the
injured party whole.  First, the City stresses the fact
that there was a good faith dispute over its liability for
respondents' loss.  In our view, however, this fact carries
little weight.  If interest were awarded as a penalty for
bad faith conduct of the litigation, the City's argument
would be well taken.  But prejudgment interest is not
awarded as a penalty; it is merely an element of just
compensation.
  The City's -good faith- argument has some resonance
with the venerable common-law rule that prejudgment
interest is not awarded on unliquidated claims (those
where the precise amount of damages at issue cannot be
computed).  If a party contests liability in good faith, it
will usually be the case that the party's ultimate
exposure is uncertain.  But the liquidated/unliquidated
distinction has faced trenchant criticism for a number of
years.  Moreover, that distinction -has never become so
firmly entrenched in admiralty as it has been at law.-
Moore-McCormack Lines, Inc. v. Richardson, 295 F. 2d
583, 592 (CA2 1961).  Any fixed rule allowing prejudg-
ment interest only on liquidated claims would be
difficult if not impossible to reconcile with admiralty's
traditional presumption.  Yet unless we were willing to
adopt such a rule-which we are not-uncertainty about
the outcome of a case should not preclude an award of
interest.
  In sum, the existence of a legitimate difference of
opinion on the issue of liability is merely a characteristic
of most ordinary lawsuits.  It is not an extraordinary
circumstance that can justify denying prejudgment
interest.  See Alkmeon Naviera, 633 F. 2d, at 798.
  The second purportedly -peculiar- feature of this case
is the magnitude of the plaintiff's fault.  Leaving aside
the empirical question whether such a division of fault
is in fact an aberration, it is true in this case that the
owner of the E. M. Ford was primarily responsible for
the vessel's loss.  As a result, it might appear somewhat
inequitable to award a large sum in prejudgment
interest against a relatively innocent party.  But any
unfairness is illusory, because the relative fault of the
parties has already been taken into consideration in
calculating the amount of the loss for which the City is
responsible.
  In Reliable Transfer, 421 U. S. 397, we -replaced the
divided damages rule, which required an equal division
of property damage whatever the relative degree of fault
may have been, with a rule requiring that damages be
assessed on the basis of proportionate fault when such
an allocation can reasonably be made.-  McDermott, Inc.
v. AmClyde, 511 U. S. ___, ___ (1994) (slip op., at 4).
Thus, in this case, before prejudgment interest even
entered the picture, the total amount of respondents'
recovery had already been reduced by two-thirds because
of National Gypsum's own negligence.  The City's
responsibility for the remaining one-third is no different
than if it had performed the same negligent acts and
the owner, instead of also being negligent, had engaged
in heroic maneuvers that avoided two-thirds of the
damages.  The City is merely required to compensate
the owner for the loss for which the City is respon-
sible.
  In light of Reliable Transfer, we are unmoved by the
City's contention that an award of prejudgment interest
is inequitable in a mutual fault situation.  Indeed, the
converse is true: a denial of prejudgment interest would
be unfair.  As Justice Kennedy noted while he was
sitting on the Ninth Circuit, -under any rule allowing
apportionment of liability, denying prejudgment interest
on the basis of mutual fault would seem to penalize a
party twice for the same mistake.-  Alkmeon Naviera,
633 F. 2d, at 798, n. 12.  Such a double penalty is
commended neither by logic nor by fairness; the rule
giving rise to it is a relic of history that has ceased to
serve any purpose in the wake of Reliable Transfer.
  Accordingly, we hold that neither a good-faith dispute
over liability nor the existence of mutual fault justifies
the denial of prejudgment interest in an admiralty
collision case.  Questions related to the calculation of
the prejudgment interest award, including the rate to be
applied, have not been raised in this Court and remain
open for consideration, in the first instance, by the
District Court.
  The judgment of the Court of Appeals is
                                            Affirmed.

  Justice Breyer took no part in the consideration or
decision of this case.