A case in point is a naval architect who
entered into an agreement in 2007 to design a jet-boat to be operated in Australia. Te company which built the boat did not have insurance. The vessel was delivered in 2008 and in early 2009 the engine mounts collapsed and various other problems occurred which rendered the vessel unable to operate. In 2010, proceedings were issued against
the boat builder and the naval architect. Te principal allegation involving the design related to the number of engine mounts installed. However, a comprehensive survey report found that the cause of the collapse was excessive use of the engine by the operator, rather than the mounts installed. Te report further stated that the cost of rectifying the mistakes attributed to the design was A$20,000 (US$20,800). It later transpired that the total claim was for A$673,000 (US$ 700,000).
Mediation took place but the matter
was not resolved. The builder advised that it could only contribute A$40,000 (US$41,000) towards the claim. Te case went to trial and, as legal costs continued to rise A$150,000 (US$156,000) (at this point) the decision was taken to make an offer to settle. The naval architect, with the support of ITIC, made an offer of A$100,000 (US$104,000) which was not accepted and eventually a figure of A$300,000 (US$312,000) was agreed and settled, along with legal costs which totalled A$230,000 (US$239,000) . Te case is an example of an instance
where, even though the architect was not negligent, as the builder did not have sufficient cover, the architect was forced to contribute more in settlement. Another example was a naval architect who was contracted to carry out
the external design of a yacht newbuilding. Aſter the
yacht was completed and set sail, a guest fell down a small flight of internal stairs during the course of an onboard party, sustaining back and hip injuries as a result. The guest sued, among others, the
yacht owner, builder, surveyor and two naval architects. Legal counsel was appointed to defend the Australian naval architect. Despite the fact that any design fault involving the interior of the vessel bore no relation to the work carried out by the insured architect, the parties were jointly sued in the amount of US$1 million. Lawyers spent over US$150,000 - and seven years - trying to obtain a judgment removing the naval architect from proceedings, a costly event for something that was not even the architect’s fault. Te moral of the story is that you don’t
have to make a mistake to be sued. In such cases, insurance can help. NA
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info@tanacomp.co.jp The Naval Architect October 2012
www.tanacomp.co.jp 23
In-depth
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