Class II Liability

Total Loss of a chartered vessel

A vessel loads a cargo of steel coils in South Africa for discharge in the United States. The vessel sails for the United States following the 'great circle' route. The vessel encounters severe weather and sea conditions, the cargo stow collapses and resultant instability leads to the capsize and loss of the vessel, her cargo and her crew. Claims are brought against the charterer by the hull insurers (claiming $5,000,000), by the cargo insurers for the full value of the cargo ($6,000,000) and by the crew dependants ($30,000,000). The various claims are brought in different jurisdictions.

In all the jurisdictions involved, it is clearly established that the cargo has been negligently stowed, stowage being the clear responsibility of the charterer under the charterparty. The lawyers employed on the Assured's behalf by the Club manage to successfully plead limitation in those jurisdictions where limitation is relevant and available, thus considerably reducing the amounts originally claimed, although the ultimate liability imposed on the Assured still runs into millions of dollars. The Assured's own legal costs and the costs awarded against him by the various courts hearing the claims amount to well in excess of $500,000.

The Assured is able to recover from the Club his liability to the hull underwriters, the cargo underwriters and the crew dependants and to recover the heavy legal costs incurred. In addition, the Assured has had the benefit of having the claim investigated and expertly managed by the Club on his behalf, thus saving hundreds of hours of his own management time.