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Intermediary September 2006
Naval Architects - Thoughts on loss prevention
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ITIC insures an ever increasing number of naval architects.The challenges and claims encountered by naval architects are extremely varied, but the following article illustrates three of the common issues ITIC has seen faced by this profession.We hope that this risk prevention advice will be of use to both ITIC's naval architect members and other members employed in similar areas of work such as marine surveyors and consultants and new building supervisors.
Be specific from the outset
When negotiating a contract with a client, please ensure that those parts of the design for which you are not responsible (particularly those which the client may think you will be undertaking) are clearly defined as such in the contract.Your client will then not be able to claim that they had any reason to believe that your duties under the terms of your contract included the task you have specifically excluded. Conversely, please also make sure that all the tasks you do intend to perform under the contract are clearly defined.
A naval architect believed that they had no responsibility for the selection and design of the propellers on a ship they were contracted to design.The naval architect claimed that they were not experts in this field and would never hold themselves out as such. Indeed, there was no mention of them selecting and designing the propeller in the contract. However, the client believed that this task would be automatically included in the naval architect's duties.The propellers were later found to be the cause of major problems with the ship, and both sides blamed each other for the selection of the incorrect blade types. Obviously had the naval architect expressly stated in the contract that they would not be responsible for the selection of propeller blades, they would not have attracted any liability in this instance.
Changes to the agreement
Do not be pressured into agreeing changes to your designs if you are not entirely happy with them. If the ship yard or the ultimate buyer of the ship alters any part of your designs without your agreement, no matter how small, ensure that you notify all parties of the changes from your original designs and your disapproval of these changes.
A naval architect is paid to design ships according to the specification provided by his client. For instance, if the naval architect has designed the ship's hull to have a certain type of welding but the shipyard which actually performs the welding suggests that a lesser type of weld would be just as viable and cheaper.The naval architect may not be happy about the change but can be pressured into agreeing that the single weld will suffice. Unless you express your dissatisfaction with the change at this stage, you may prejudice your position if, once the ship is in use, cracks in the hull become apparent and the blame is placed on the single welding that the naval architect agreed to.
Misunderstanding of the project
Even though the architect believes radical new ideas may potentially be the answer to his client's problems, the architect must also take into account the environment in which the ship is due to operate and the task it is supposed to perform. Naval architects must avoid accepting liability for performance criteria that can be achieved only in optimum conditions.
The naval architect should be aware of the client's plans for the use of the ship and design it accordingly. ITIC has seen claims where the architect has designed a new type of ship using the latest technology available, but clients have claimed for various alleged problems with the ship including that (a) due to the design, passenger seats had to be removed for safety reasons, (b) the ship could not withstand the rough seas in the area it was designed to operate in and (c) the specified speed of the ship, whilst being achievable in optimum conditions only, was not achievable during the day to day operations, on the route required by the client.
Conclusion
In order to minimise the risk of exposure to claims, you should not only consider the factors set out above but also, in all cases, seek to limit your liability under the terms of the contract to a fixed sum.This may be up to ten times the fee you receive but, in some contracts ITIC has seen, the limit of liability has been fixed at the amount of the fee the architect receives for the design.A number of claims received by ITIC relate not to design defects but to build quality and, accordingly, the designer should always verify that the shipyard is building the ship to the specification and standards required by him.