Intermediary news

ASBA golf day

In spite of ITIC being willing to pay claims whenever justified, disappointingly there was no opportunity to do so when the Club sponsored a hole-in-one at the Association of Ship Brokers and Agents (U.S.A.), Inc. (ASBA) 96th Annual Golf Outing at the Knickerbocker Country Club in Tenafly, New Jersey.

The 6th hole, a par three of 168 yards, offered the golfer who could manage an ace a cash prize of US$ 3,000 – which ITIC had insured with the National Hole-in- One Association. Unfortunately, the feat was not achieved by any of the ship agent and shipbroker members of ASBA, and their guests, who competed in the event. A win for the insurers on this occasion.

Alister Inglis

ITIC regrets to announce the death of Alister Inglis on 15th December, 1998. Alister was the founder of Sureness Marine Services Ltd. in Hong Kong, which had acted as ITIC’s correspondent for a number of years. Sureness was also the general correspondent for the Britannia P & I Club and had acted in that capacity for approximately thirty-five years. Alister had lived in Hong Kong virtually all his life and his knowledge of the Far East was extensive. He enjoyed an excellent relationship with many of ITIC’s local Members and was always available to assist any local shipbroker, agent or ship manager with any difficulties they might encounter. He was also active in helping the Club with its marketing campaigns thereby assisting in the development of a substantial and valued membership in Hong Kong.

Our sincere sympathies are extended to his wife and two children.

Freddie Clemo

Sadly we also have to report the death of another of ITIC’s overseas correspondents, Freddie Clemo, who died on 22 March, 1999 after a short illness. Fredrick Clemo was born in Hong Kong and spent much of his early career in the former colony. On moving to the Philippines he worked in senior management positions for a number of liner agency companies and in 1975 formed Pandiman Philippines Inc. which soon became the correspondent for virtually all the major P&I Clubs. Freddie was a larger than life character and made an outstanding contribution to the Philippine shipping industry. He was awarded the MBE for services to UK/Philippine relations. He will be greatly missed by all those who came to know him.

Our sincere sympathies are extended to his wife and three children.

Norwegian Shipbrokers Association

Andrew Jamieson, ITIC’s legal adviser, conducted a workshop in April at the annual meeting of the Norwegian Shipbrokers Association. His presentation was entitled “Avoiding Insurance Claims” and was presented on the MS KRONPRINS HARALD while sailing between Kiel and Oslo.

Changes to telephone numbers in the United Kingdom

As a result of heavy demand for telephone lines, OFTEL, the UK Government’s industry watchdog, has identified six areas in the country which will need more numbers by the year 2000. These are London, Portsmouth, Southampton, Coventry, Cardiff and Northern Ireland. The prefix for inner London areas have changed from (0)171 to (0)207 and for outer London from (0)181 to (0)208. ITIC’s new number is therefore (0) 20 7338 0150. These changes were introduced on 1st June, 1999. The new codes and numbers will run parallel with the old codes and numbers. Parallel running will cease as from 15th October, 2000.

Marcus Iles

Marcus began his career in shipping insurance in 1994 when he joined the Steamship Mutual P&I Club. He spent four years working for the Indian claims department where he specialised in dry cargo claims. Marcus joined ITIM in November last year as an Account Executive. His shipowners’ P&I Club background may mean he is familiar to some of our correspondent and marine surveyor members as well as the shipping principals of ITIC members who are ship agents and ship managers. The Club is pleased to welcome Marcus to the ITIM team.

The high cost of winning

The following article appeared in a recent edition of the ITIC Claims Review. It is reproduced here as it has generated considerable interest including a comment in one well-known publication that “mediation is the way to go, unless you're in the legal profession”. Readers who would like to know more about mediation are recommended to read the article on page 10 of this issue of the Intermediary on the subject of Alternative Dispute Resolution.

One of the most important aspects of ITIC’s insurance is the payment of legal costs. Even if the Member has absolutely no liability for the claim against him, a defence has to be prepared and the costs can be substantial. ITIC recently asked ten firms of London solicitors for an estimate of costs for a three day court trial of a hypothetical but fairly routine claim against a shipbroker.

The average response was US$ 100,000 for defence costs (including expert witnesses, etc.). If the shipbroker were to lose the case, he would become liable for 75-80% of the opponent’s costs (which would be for a similar amount). The total costs of a routine case would therefore amount to US$ 180,000 without taking into account the amount of the claim itself. Even more expensive have been the costs of arbitration of ship management claims which rarely amount to less than US$ 300,000. In the English courts (and others) a successful defence or prosecution means that the winning party can recover a major part of his costs. This is not the case in other jurisdictions and ITIC’s Members often have to pay substantial unrecoverable costs.

A firm of US oil traders needed a tanker to load an oil cargo for the USA at a Nigerian port. Their broker approached an intermediate broker in Belgium, who fixed a tanker through the owner’s broker. The tanker waited two weeks at the Nigerian port for a cargo which did not materialise. The owner subsequently obtained an arbitration award of US$ 200,000 against the US charterers, but was unable to enforce it as the charterers were insolvent. The owner then sued the intermediate broker in the Belgian courts alleging breach of warranty and/or negligence. The court case extended over several years and, even though the broker was eventually successful in defending the claim, no part of the defence costs could be recovered.

Even in jurisdictions where costs are recoverable, the shortfall can be substantial. When a steel cargo loaded on the deck of a ship was damaged by seawater, the receivers claimed the value of the damage from the ocean carrier because the bills of lading were not claused for deck stowage. The ocean carrier paid the claim and sought reimbursement from his agent in the Singapore courts, on the grounds that the agent should have claused the bills of lading. Over the next seven years several attempts were made by the Club to settle the claim, as it was obvious that costs were overtaking its value. No reasonable settlement proved possible and in 1996 a full court hearing took place, which resulted in victory for the agent. However, the agent’s legal costs amounted to US$ 135,000 ofwhich only US$ 85,000 were recovered. The “victory” cost US$ 50,000.