[5] Originally laid down as E-class submarine E58 on 18 May 1916, she and sister ship E57 incorporated enough changes that they were renamed as the first pair of boats of a newly designated L class.

During World War I, L2 was on patrol when she became the target of a friendly fire incident involving three United States Navy destroyers.

Mistaking L2 for an Imperial German Navy U-boat, Paulding headed for the periscope at flank speed and opened gunfire.

Some of L2's crew emerged from her conning tower, waved their hands and a White Ensign, and fired a smoke grenade.

[6] The force commander of British submarines, Captain Martin Dunbar-Nasmith, commended L2 and the destroyers for the action in his report on the incident.

Admiral Lewis Bayly, the Royal Navy′s Commander-in-Chief, Coast of Ireland, in his endorsement of Nasmith′s report, wrote, "Had L-2 not been very skillfully and coolly handled, she would have been lost.