A marine surveyor was contracted to carry out a valuation of a vessel for an IPO. The valuation was agreed to be based upon a visual inspection only.
The valuation was included in the IPO prospectus and various parties made investments in the company. The market at the time was difficult and ultimately the single owning vessel company entered into administration.
Various claims were made against the surveyor from investors alleging negligence in the valuation report. The claim had nine claimants and 59 third party claim notices. The surveyor denied that their valuation had been negligent. Furthermore, the valuation contained various disclaimers which are usual in all valuation reports.
ITIC successfully arranged for the defence for the surveyor. The claim was successfully defended but unfortunately took 7 years to conclude. The legal defence costs of EUR 144, 700 were covered by ITIC.