The resulting percentage from Critical Defence rating no longer reduces the chance for an opponent's attack to be a critical hit or devastating critical hit. Since U9, this Critical Defence percentage reduces the extra damage percentage (so called magnitude or multiplier) inflicted by critical hits or devastating critical hits. This reduction can never reduce the total damage to below a normal maximum damage hit. A critical hit is thought to have an extra damage of 50% or more on top of the maximum damage.
Critical Defence has no cap(s), but it has an unreachable limit of 100% due to diminishing return from rating to percentage conversion (character panel would show 100.0% only with at least a rating of 19,990,000 at a player level of 100).
Read all about calculations with percentages and ratings here.
Sources of Critical Defence
Guardians, Wardens and Captains all have some critical defence as a passive skill starting from level 20. Critical Defense can be found on many high level items. With the introduction of the new functionality, new crafted armour recipe outputs were introduced for lower levels. These new crafted armour pieces with Critical Defense rating usually are the chest and glove parts.
Critical Defence Ratings were introduced into LoTRO with the Siege of Mirkwood expansion.