ITIC Warns on Costs of U.S. Documentary Disclosure

Press Release
Monday, March 25, 2013
Photo: ITIC

ITIC has warned that onerous documentary disclosure rules in the U.S. courts can drastically increase the cost to shipping interests of defending even without-merit claims.

In the latest issue of its Claims Review, ITIC cites a case involving the manager of a number of cruise ships which was sued by a shipowner in a U.S. court for alleged failure to oversee maintenance, for negligence in the provision of manning advice and for negligence in relation to stability problems experienced by one of the owner’s ships. The owner alleged that theses breaches of contract caused it to incur increased maintenance and repair costs, and to lose profits. In total, it claimed in excess of $20 million.

ITIC noted that an enormous amount of documentation was requested by the plaintiffs in this litigation. There were demands that the manager produce over five million documents, and such was the magnitude of the request for documentation that the court ordered that a specialist company be employed to track emails specific to the management of these vessels. The costs of the court-appointed email tracking firm were $350,000, while the average monthly legal costs incurred were $110,000 for each of the twelve months prior to trial.

At an early stage, the manager and ITIC concluded that the case was without merit. But ITIC recognized that the substantial legal costs likely to be incurred (which the winning party cannot recover in US litigation) meant that, if a sensible settlement offer was made, it would be considered. At no stage, however, was such an offer made by the owner, which continued to hold out for its original claimed amount.

When the case came to trial, the court dismissed all the claims. The owner appealed and the manager put in a counter-claim for its fees, costs and other expenses incurred. This helped to shorten the appeal process as the owner eventually dropped its appeal and its motion for fees and costs, and paid to the manager a settlement of $375,000 to ensure that the manager dropped its counter-claim.

Although the manager comprehensively won the case, the legal costs incurred, which were covered by ITIC, still amounted to $2.7 million.

www.itic-insure.com
 


Legal

UASC's Dismal Performance

United Arab Shipping Company (UASC), which is close to merging with Hapag-Lloyd, revealed enormous deficits and a massive debt in its key financial figures, says Alphaliner.

Philippines: Sea Dispute Won't Shift Ties with China, U.S.

The Philippines' territorial dispute with China over the South China Sea has not caused Manila to rebalance diplomatic ties with either its ally, the United States,

Hanjin Shipping to Submit Self-Rescue Plan

South Korea’s Hanjin Shipping is planning on submitting a self-rescue plan to creditors this week to stave off bankruptcy by Aug. 25, reports Korea Herald quoting local media.

Cruise Ship Trends

Lucas Marine, Harbor Breeze Cruises Partner to Cut Fuel Costs

Lucas Marine is partnering with Harbor Breeze Corporation to help reduce the yacht charter and cruise company's fuel costs, maintenance and environmental impact in Los Angeles and Long Beach Harbors.

Pods Versus Water Lubricated Props

Thordon Bearings has called on the marine industry to investigate the characteristics of both conventional seawater-lubricated propeller shaft systems and podded

Grand Bahama Shipyard Adds Four Executives

Grand Bahama Shipyard Limited (GBSL), a Caribbean shipyard providing retrofit, refurbishment and revitalization to cruise and commercial vessels, has added four

Finance

Cosco Eyes Spanish port of Algeciras

Algeciras Bay Port Authority in southern Spain has put up a tender for its third container terminal, and China's Cosco Shipping Ports is already being mentioned as a fore runner candidate,

UASC's Dismal Performance

United Arab Shipping Company (UASC), which is close to merging with Hapag-Lloyd, revealed enormous deficits and a massive debt in its key financial figures, says Alphaliner.

Canada May Ask Far-offshore Drillers to Pay Extra

Canada may ask oil companies to contribute to the hundreds of millions of dollars or more the country has to pay to an international body if they drill far offshore,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Offshore Oil Ship Electronics Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0657 sec (15 req/sec)