Sent to the scrap heap

A vessel was purchased and secured at a dock by the new owner. Whilst there it was described as an “eye sore” and was in danger of sinking, leaking pollutants and/or colliding with moving vessels. It was classed as “marine debris” and the local government decided to remove and relocate the vessel.

The local authority of where the vessel was relocated appointed a marine surveyor to carry out a report on the vessel. The report determined that it was unsuitable for use or even repair and valued it at just US$ 1,000 for scrap. As a result, the local authority towed it to the vessel salvage yard where it was dismantled.

The owners of the vessel were in disagreement with this decision and demanded compensation of over US$ 200,000. Eventually the owner sued the surveyor, the local authority and three other third parties.

Lawyers were appointed to protect the surveyor. The main defence for the surveyor was that they were not responsible for the removal and scraping of the vessel. They were simply appointed by the local authority to carry out a valuation survey.

This was a strong defence, however US$ 50,000 in legal fees had already been incurred, before a trial had even started. Therefore, it was considered that a nuisance value settlement would be the best option if it could be obtained. In discussion with lawyers and the other parties the surveyor settled their portion of the claim at US$ 20,000 (which was far less than the fees of going to trial). The combined settlement for the other four parties totalled US$ 240,000.

In total, this claim cost the marine surveyor US$ 70,000 which was covered by ITIC.