Costly courtesy

An ITIC member acted as a marine consultant, stowage and lashing planning advisor for the stowage of steel coils.

The marine consultant was appointed by a principal for whom they had worked with for many years and enjoyed a very good working relationship.

Due to their good relationship, upon only the verbal instruction of the principal, the marine consultant arranged and signed off on the stowage of the coils on an “athwartship” basis (at right angles to the centre line of the ship) as this form of stowage increased the cargo intake. It could be justified with additional lashing due to the way the hold was constructed.

The ship encountered very heavy seas and ultimately the stow collapsed resulting in a claim in excess of US$1.5m. The consultant was subsequently held responsible by the insurer of their principal, as part of a recovery action.

Unfortunately, there was no written confirmation of the instructions from the principal indicating they had agreed to an athwartship stow. There were however various other facts which were in the marine consultant’s favour to defend the case, including a limitation of liability clause in their terms and conditions.

ITIC supported their defence, which included obtaining independent third party advice to support the position for stowing the cargo athwartship. After five years of investigations and claims negotiations ITIC managed to successfully defend the marine consultant, making a modest claim contribution of EUR 50,000.

This is a good example that shows even if your most trusted clients do not intend to make a claim against you, their insurers or another third party may do so. You should always get instructions in writing. If you do not, your “favour” can become very costly.