Something fishy

ITIC’s member is a designer of fish farms. They designed a fish farm which was fabricated in Asia and delivered to the end user based in the UK.

It became apparent when the fish farm was in situ that the sockets (holders into which poles for fencing, lights, moorings etc. can be inserted) along the structure had been designed incorrectly.

The original design required these sockets to be 9mm thick. However, by mistake on this occasion, the design had been altered to a thickness of only 3mm and this was not spotted by the designer. As a result, the sockets were too weak and tore when used.

Consequently, the farm could not be used by the end user. Investigations took place as to how best this could be resolved. Fixing the sockets in situ would be extremely expensive, if not impossible, due to the galvanisation process the steel required. It would actually be cheaper to fabricate a completely new structure in Asia and ship it to the UK.

However, this solution led to other problems because of delays which could have led to a loss of profits claim in excess of US$ 4m.

Even moving the fish farm would have been very difficult. There were high costs of towing and storage - if a place to store it could even be found. Potentially the structure would have had to be broken up for scrap and stored on land. The sum for scrap would not have covered the moving and storage costs.

Fortuitously, another fish farming company offered to take the structure for US$ 1.1m on an “as is where is” basis and agreed to pay all the costs of moving the structure to their facilities. Thus the costs for towage and storage were avoided. The end user was then refunded the money they had paid. This was the most cost effective resolution of the options available.

The client paid US$ 1.1m for the structure. This was repaid to the end user to settle the claim. ITIC reimbursed the designer in full as this was the extent of the claim and there was no profit element to this.