Reforming the Prize Court

Letters of marque depend on an effective judiciary.

This piece was originally published by @DefenseAnalyses on X. Thank you to the team for publishing this article and allowing me to reshare.

“Commerce is the source of wealth, and wealth furnishes the sinews of war.” – Jean Baptiste Colbert

The United States Constitution preserves a power that many Americans have forgotten exists: the authority of Congress to issue letters of marque and reprisal. This delegation, enshrined in Article I, Section 8, alongside declarations of war and raising armies, represents one of the most fascinating intersections of private enterprise and national security in the American legal tradition.

The history behind letters of marque and reprisal is relatively recent in human history. It dates back to medieval Europe where monarchs first tacitly, then formally, authorized private armed vessels to raid the shipping of hostile nations. The practice itself evolved from ad hoc retribution, where the aggrieved party had to provide a list of losses from a hostile raid to their king and convince him to sanction a response – but rapidly became a formalized system by the 16th century. Nations with limited naval resources or experience utilized privateers to supplement the limited power of their fleets, which were often engaged in escorting merchant vessels – to scare off other privateers.

The practice flourished during America's early conflicts, particularly the Revolutionary War and the War of 1812, where figures like John Paul Jones took the fight outside the American theater and led the only American raid on the British homeland, setting fire to Whitehaven, England in 1778, which sparked widespread fear in Great Britain’s populace. Between 1776 and 1783, approximately 1,700 American privateers captured or destroyed nearly 600 British vessels, significantly disrupting supply lines and forcing the Royal Navy to divert resources to merchant protection. The economic impact was substantial. Prize courts played a major role in facilitating this private warfare, adjudicating captures worth millions of dollars, and providing crucial revenue for the fledgling nation while simultaneously damaging British commercial interests.

But letters of marque have fallen into disuse—though crucially, not constitutional invalidity. Privateering declined in part due to the formalization of warfare: the rise of fixed battlefields and clear nation-state combatants. But as we return to a world of hybrid wars and fuzzy lines between private citizens and combatants, so must our attitude towards existing international law rooted in that world, privateering included.

If the United States expects to meet the modern battlefield with the innovation and flexibility needed to fight not just on air, land, and sea, but in space and cyberspace, the constitutional authority to issue letters of marque in areas beyond the historical usage at sea must be reexamined critically, particularly the adjudication of prize cases and awarding remedies to those fortunate enough to carry out private operations in new areas of combat.

Contemporary Approaches to Privateering

While letters of marque may seem like relics of a bygone era of wooden ships and cannon fire, their underlying principle—authorized private actors augmenting state power in contested domains—has striking relevance to modern security challenges. The 21st century presents a complex threat landscape where traditional military responses often prove insufficient or inefficient against asymmetric adversaries and in unconventional operational domains. This evolving security environment creates compelling opportunities to reimagine letters of marque for contemporary application. Some members of Congress have recognized this, like Representative Tim Burchett, who introduced theCartel Marque and Reprisal Authorization Act of 2025. The U.S. Naval Institute has also argued in favor of letters of marque – but for a completely different issue.

There are multiple dimensions where a “letter of marque” or legal privateering activities could play a role in the national security strategy of the United States. Representative Burchett’s bill is very clearly targeted towards cartel members, while the U.S. Naval Institute’s piece is focused on targeting Chinese merchant vessels.

Irregular naval warfare and piracy continues to be a threat on global shipping lanes, particularly in the Gulf of Aden and Southeast Asia. United States naval capacity is declining and we put out less and less vessels every year, and patrolling the oceans requires extreme force projection. Authorized security vessels could be supplemental force additions in anti-piracy operations, particularly by escorting merchant vessels – or, like the U.S. Naval Institute also writes, privateers can be used to defend other nations from Chinese fishing fleets – which is itself a form of asymmetrical warfare.

Counter-terrorism and asymmetric warfare scenarios present additional applications. Private military contractors already operate extensively in conflict zones, but typically under direct contractual arrangements with governments. A letter of marque framework could provide alternative legal structures for operations against non-state actors, particularly in ungoverned or under-governed spaces where traditional military intervention proves politically or practically challenging. These modern privateers might focus on disrupting terrorist financing networks, interdicting illicit supply chains, or gathering intelligence in denied areas, with prize courts ensuring operations remain accountable and aligned with national objectives.

But perhaps the most revolutionary application of privateering is in cybersecurity or other aspects of “fifth generation warfare.” This is already true of adversaries like China, Russia, and Iran who use these tactics against the United States – why not replicate it, but legally?

The concept of "cyber letters of marque" could authorize private cybersecurity firms to identify, track, and potentially counter malicious actors responsible for attacks on critical infrastructure or intellectual property theft. Unlike traditional privateering focused on physical capture, cyber privateers might focus on data recovery, botnet disruption, or even counter-exploitation of adversary systems.

There’s also a digital currency component here. Cartels, too, smuggle weapons, drugs, and people in and out of the United States. The recent designation of many cartels as foreign terrorist organizations will no doubt cripple their involvement in banking systems, but plenty of criminal enterprises operate using bitcoin and other cryptocurrencies. Perhaps a cyber-privateer could be engaged to seize as many cryptocurrencies and assets as possible, and keep a percentage of the proceeds? The same could work for state or non-state actors under U.S. sanctions as well. We already seize bank accounts and freeze assets, but this can have a limited effect in countries outside America’s reach. This could change that.

However, opening up cyberspace to licensed American privateers requires a system of oversight. A modernized prize court system would need to adjudicate these digital "captures," verifying that actions remained within authorized parameters and distributing recovered assets or awarding bounties.

Space, too, is ripe for privateering. Thank you, Elon Musk, for being the only person capable of bringing American astronauts back home, but the inability of the government to play its own role in their release is disheartening and illuminating. More and more countries are starting to play in space, and as those domains become congested and contested, private companies (many of whom already possess their own capabilities) can be repurposed for security operations.

Authorized private space operators could monitor, intercept, or neutralize hostile satellites or provide rapid reconstitution of damaged space assets during conflict. Prize court adjudication would verify compliance with space law and ensure operations remained within prescribed limits. The potential militarization of space is controversial, but may happen nonetheless. Despite the Outer Space Treaty banning the militarization of space, most of the focus is on the positioning of weapons of mass destruction and military facilities on celestial bodies. It is entirely possible that more asymmetric forms of warfare pose a significant threat in space in the future.

Again, to expand letters of marque to this new domain requires a functional prize system. Many cybersecurity threat hunting operations, counter-piracy efforts, and satellite servicing missions already operate on commercial models. A modernized prize system could enhance these incentive structures, directing private sector capabilities toward national security priorities without requiring direct government funding or control.

The Need for a Specialized Prize Court

The historical prize court system, while innovative for its time, suffers from fundamental inadequacies that render it unsuitable for contemporary application without significant modernization. The legal framework developed in the United States – and across the world – are simply too inadequate for the modern environment. The type of contemporary applications listed in the prior section, particularly in cyber and space, are both technically AND situationally complex.

Prize court procedures were designed for an era of naval warfare where evidence was fairly straightforward and the legal and technological complexity surrounding prizes was minimal. Ships, cargo, and written documentation constituted the primary evidence in adjudications, as well as statements from the officers involved. The court system itself was fairly simplified as well. Under current United States law, district courts have original jurisdiction for prize cases, and wide powers to determine the eventual sale of the seized property. In practice, it may be necessary for Congress to modernize these statutes in order to facilitate an effective system for modern letters of marque.

The first “tell” that the law is outdated in regards to prizes is obvious: it relies upon the term “vessel” in its prize language– although the text was updated to include “aircraft” as a type of vessel. This leads us to tackle two problems: modernizing the courts with an eye towards present-day technological and legal complexity and implementing adequate fee structures particularly suited for modern contraband and digital goods.

The first issue, one of the explicit legal jurisdiction, is not necessarily the most difficult one to set up on paper. Historical prize courts operated within clearly defined maritime boundaries where international law governing capture was relatively settled – and the district court structure is a holdover from an era where you needed to physically sail a vessel into port and make arrangements with the court present there. If there were to be letters of marque in the cyber domain, for example, there would be no clear demarcation to “return a prize” into, unless one were to use the corporate address to determine which court the case was submitted to. That wouldn’t be the worst solution, but could strain the resources and rely on personnel with little specialized knowledge.

Furthermore, the wide spectrum of potential uses for letters of marque would mean that courts would need secure channels to review classified information, including clearances for judges and court personnel and SCIFs. It might be more convenient to instead create an Article III court through an Act of Congress, similar to the Foreign Intelligence Surveillance Court, to streamline any operational procedures and centralize the legal knowledge, as well as precedent, within a single court. For this reason, the Judicial Conference of the United States would need to establish procedures for designating judges to prize court service, and likely develop training programs to provide additional technical and legal education.

Modern Models for Distributing Remedies

The physical possession of vessels and cargo is no longer the only measure of ownership or seizure, and it’s important that the United States forges the future of prize law in a deliberate, reasoned, and controlled manner, especially given the inherent complexity of dealing with digital assets, contraband, and potential space operations. Not only do courts need to verify that the action was legal, they also must disperse the remedies accordingly.

Historically, if the prize was determined to be “lawful,” the goods were to be sold at auction and the proceeds distributed amongst the crew. Naval officers had specific percentages distributed by rank (this practice is no longer allowed in the United States Navy), but private actors were allowed to do what they wished with their share – often after the government took a cut. Prize courts distributed the rewards on a contractual basis, attempting to effectuate the intent of the parties involved in the seizure. Privateers, as private actors, were allowed to split the awarded remedy for the prize in any manner they chose.

United States naval officers and crew, however, were bound by different rules. The 38th Congress’ Act to regulate Prize Proceedings and the Distribution of Prize Money was explicit in denoting which percentage of the proceeds went to the Treasury of the United States, commanders, and crew respectively, though this practice has been discontinued since World War 2 – all military prize captures, while legal, are auctioned and remitted to the government directly.

Allowing the government to assume a share of the proceeds for the sale of physical or digital assets will also provide a “pay-for” mechanism on top of whatever funding may be authorized - ideally the letters of marque system would be self-sustaining if not somewhat positive to the government balance sheet. This too would keep the court somewhat insulated during budget debates and government shutdowns.

A modern remedies system would need more innovation to be workable in the modern day. Physical assets, if taken, could still be auctioned off by the government and proceeds split. Digital assets, like seized digital funds or cryptocurrency, would also be fairly easy to distribute to parties that play a role in seizing them from sanctioned individuals and criminal organizations.

To the extent that letters of marque would be used against cartels specifically, the system would need to be prepared to deal with the seizure of drugs and recovery of trafficked individuals.

There is absolutely no doubt that providing legal and adequate compensation on those two topics is a far more complicated beast than with seizable, or at least distributable, assets.

Older prize law in the United States set a “bounty” for captured enemies, and the bounty itself varied depending on whether the captor vessel was “superior” in force or “inferior,” with the inferior captor receiving the highest sum per head.

The government should, in fact, take that principle and not only pay a bounty for every captured cartel member, there should also be a bounty for recovered persons from trafficking or enslavement. In regards to drugs, Congress can set a price that it would be willing to pay per pound of illicit drugs seized and turned over to the relevant law enforcement agency. These kinds of incentives would discourage indiscriminate violence and temptation to hide drug seizures for resale and personal profit.

If a letter of marque was issued to a company that could take down the communications or electric grid of a particular adversary, whether state or non-state, Congress could authorize a “fee-per-minute” method, wherein the privateer would receive a set rate for the duration of the attack.

A modernized letter of marque system should incorporate bounty structures based on predetermined values for different types of successful operations, similar to bug bounty programs in cybersecurity, in fields where value is difficult to calculate and condemn as physical property. This would not be the case for operations that produce recoverable assets where the court could establish percentage-based recovery fees, with remaining assets returned to victims or the Treasury. Ideally, this reformed compensation structure would create sufficient incentives for action by private, authorized actors, without encouraging excessive risk taking or profiteering behavior.

In fact, it is entirely within the purview of Congress to use similar judgments like “inferior or superior force” and apply that to risk instead, which could then be used to set benchmarks for which companies are allowed to participate in certain risk categories. Higher risk operations could bring more rewards or a larger cut for a privateer, but they would be subject to any qualifying standards found necessary by Congress and the President. Ultimately, the function and structure of assigning remedies is up to Congress, but it would be prudent for any new legislation focused on letters of marque to provide multiple methods of compensation and rates, while the Article 3 federal court would determine the legality and worth of the seizures, manage the distribution of assets, and ensure the private party did not exceed its remit or violate any restrictions.

Conclusion

Congress must provide the foundation for any revival of letters of marque and prize courts, as it possesses the power to create lower courts and authorize the President to take action on any number of issues. In doing so, it can ensure that the return of private actors in American warfare will be done so in an effective, sustainable manner and full alignment with military and diplomatic objectives.

To that end, Congress should pass a “Letters of Marque Authorization & Regulation Act”, which would take the form of a comprehensive authorization bill rather than domain specific items, and focus broadly on the judicial and executive implementation mechanisms, like encouraging a privateering office within the National Security Council, establishing qualification and bond requirements, and creating the United States Court of Marque and Retribution.

The constitutional authority to issue letters of marque and establish prize courts remains a dormant but valuable instrument in America's national security arsenal. While privateering was focused primarily on naval warfare, the underlying concept—leveraging private capabilities for national security objectives under judicial oversight—offers significant opportunities to the United States to achieve its strategic goals and leverage latent talent in the private sector. The global order is rapidly changing, and a constitutionally-authorized tool should not be left on the table.