INSIGHTS
ADMISSION OF LIABILITY
It may be a very obvious point, but there should be minimal contact with the opponent. Under no circumstances should any communication be sent that admits or infers an acceptance of liability. To do so may severely jeopardise a client’s ability to recover under their insurance policy. Any communications with opponents need to be managed carefully, and this is usually part of the lawyer’s remit.
APPOINTMENT OF LAWYERS
The assured will need to appoint a competent lawyer. The lawyer can help with a broad range of issues as part of the defence and/or attack strategy against opponents. In addition, the appointment will, in certain legal systems, create privileges that protect the right of a client to communicate with their legal team without the fear that those communications will later be disclosed to third parties as part of the litigation process.
While it is clear to our clients that the damages to their ship are not substantial, it is also obvious that the total damages, physical and financial, suffered by the opponent vessel are large. It is too early to assess who is more or less liable for the collision, but if the majority of the liability for the collision is ultimately found to rest with our client’s vessel, then their contribution to the overall collision recovery will be very significant, heightening the need for experienced legal representation. Paradoxically, even if our client has only a small amount of liability for the collision, this could still lead to a significant claim under their hull and machinery policy.
This is perhaps best explained by using some numbers in our scenario:
Imagine that the total claim put forward by the containership owner is US$8 million, comprised of several repair elements and including a substantial amount arising from loss of use of the vessel.
Let us further imagine that our client’s damages amount to a minimal delay to trade and US$300,000 in terms of a repair bill.
Furthermore, imagine that liability is determined as 80/20 in our favour.
Crudely speaking, this would still mean that:
Our client and their insurers pay:
US$8 million x 20% = US$1.6 million
And the containership owner and their insurers pay:
US$300,000 x 80% = US$240,000
This would result in a net contribution from our owner and their insurers to the containership of US$1.36 million, even though they were found to have played a very minor role in the collision.
The appointment of the lawyer should be agreed with the hull insurers. In our example, the hull insurers will pay most or all of the legal bill (subject to proven liability under the policy), and if a conflict arises between our client and insurers on the selection of legal representation, compromise should be achieved as soon as possible. There will be much work to do to protect a client’s interests, and, in our experience, side arguments on the preferred choice of lawyer will be a distraction to the business of building a firm case during those early stages.
Q3 2017
EVIDENCE PRESERVATION
The lawyers will interview the crew of the chemical tanker and give advice on the gathering and preservation of evidence. Among other things, the lawyers should help our client and their crew with the following:
• Taking legible, concise notes relating to the incident. The notes should not contain any subjective terms or offer opinions. They should simply record the facts and relative timing(s) of the events. The notes should be recorded as soon after the collision as possible so that opponents cannot argue on a point of recollection.
• Instructing the crew to take photographs of the damages to both ships and any other photographic evidence which might be of use in the long term.
• Retrieving electronic data from the electronic chart display information system (ECDIS) and voyage data recorder (VDR). This can be a difficult process and may require the services of a specialist data retrieval company.
• Taking copies of charts and bridge notes.
• Recording the information from the GPS, course recorders, gyro compass, radio systems, engine and weather logs, and radar.
• Preserving the vessel passage plans.
• If the collision occurred while under pilotage, establishing the timeline of orders given.
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60 | The Report • September 2017 • Issue 81
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