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
 

Maritime Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

US Plans to Shut Royalty Loophole on Coal Exports

U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia according to reforms proposed by the Interior Department on Friday.

Denmark Issues New Pilotage Regulations

In an effort to make the pilotage market more efficient, the Danish Maritime Authority (DMA) issued several new regulations following on amendments to the pilotage act.

US Shippers, West Coast Dockworkers Union Resume Contract Talks

Negotiators for shipping lines and terminal operators at 29 U.S. West Coast ports resumed contract talks with the union for dockworkers on Thursday, as cargo backups continued at the ports,

Cruise Ship Trends

Port of Houston Expecting Record Year

The Port of Houston Authority is expecting 2014 to close as a banner year for the port, with 34 million tons of cargo handled through November, Executive Director

Duffy Named President of Carnival Cruise

Carnival Corporation & plc., the world’s largest travel and leisure company, today announced that Christine Duffy has been named president of Carnival Cruise Line,

Fincantieri Wins Carnival Cruise Ship Order

Fincantieri SpA has been awarded an order by Carnival Corporation & plc for the construction of two new cruise ships for Carnival Cruise Line and Holland America Line.

Finance

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

US Plans to Shut Royalty Loophole on Coal Exports

U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia according to reforms proposed by the Interior Department on Friday.

Hapag-Lloyd Completes CSAV Merger Capital Increase

Hapag-Lloyd completed the planned capital increase of EUR 370 million (approximately $452.5 million) as part of the business combination with the Chilean shipping

 
 
Maritime Careers / Shipboard Positions Maritime Standards Navigation Offshore Oil Pipelines Pod Propulsion Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.4671 sec (2 req/sec)