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The Survey Mela

Jagan - October 6, 2021 - 5 comments

  1. The Institute of Chartered Shipbrokers, Middle East Branch has initiated the Capt. Harry Subramaniam Memorial Knowledge Series and in which they cover various topics related to the industry in a webinar. Capt. Harry Subramaniam was one of India’s greatest seafarer mentors who unfortunately passed away in June 2020i. The webinar we recently attended was on Risk Mitigation Actions following an incident in which Capt. Zarir Iraniii and Capt. John Nobleiii discussed on the engagement of surveyors together with the importance of the surveyor’s professionalism. Kudos to the speakers and the Institute of Chartered Shipbrokers Middle East Branch on this wonderful initiative.
  2. Following a maritime loss, maritime parties would invariably engage surveyors to attend to ascertain the nature, cause and extent of loss, if any and, in this way, protect their interests. If there are many parties involved (Owners, Charterers, Container Operators, NVOCC’s, Cargo interests and the various insurers), invariably there would be many surveyors attending for the same incident. The question which we have is whether two or more parties could and should engage the same surveyor to report on the loss i.e., nature, cause, and extent of loss?iv  Or do the parties have  concerns on the objectivity of the “common” survey report or the surveyor being conflicted in his joint engagement?
  3. In our view, a surveyor, irrespective of who engages them, has an independent duty to  report factually on the loss . Broadly speaking, the surveyors report on the nature and the alleged cause would assist in ascertaining the liability (be it the Owners, Charterers, Carriers, Cargo insurers, etc.) while the extent of loss would help in determining the quantum of claim, if any. Given that the surveyors role is  fact-finding, we submit that there should not be much divergence on the conclusions reported irrespective of who is actually being engaged. By way of an analogy, if we send a blood test to two different laboratories, each should provide similar test results. We admit that if the blood tests are conducted by different methods, the results may then well vary. However, if the tests are standardized, then the results should be the same.  
  4. We have had the opportunity to discuss this issue with Capt. Zarir and who mentioned that joint engagements of surveyors are common in some type of surveys such as bunker, vessel delivery/redelivery, loss prevention, classification, SIRE and SCR. This being the case, the issue we have raised is not something novel and which cannot be accomplished. Instead, it appears to us that where there are contentious issues or  a trust deficit, parties prefer to engage their “own” surveyor.
  5. Given that autonomous shipping will become a reality sooner than later, we believe that this will result in the reduction of the traditional pool of manpower pool available to the marine survey industry. This being the case, one of the ways is to relook on the joint engagement of surveyors. Our intention is not to reduce surveyor’s fee’s. Instead, we submit that if the same surveyor is engaged by multiple parties, parties would not question an increase in the surveyor’s fee’s as joint engagement may not only result in reduction of time and effort spent on arguing which surveyors report should be preferred but also in the reduction of total costs incurred in the investigation of the incident. We are aware that parties would have different interests i.e., cargo interests would be interested to ascertain if their loss falls for consideration under a cargo insurance policy while the carrier’s interest would be to ascertain if the loss is due to their fault or negligence such that they would have to deal with the loss. A common report could touch on all the issues factually and leave it to parties to decide as to how they wish to progress further in respect of their recovery/defence of a claim. 
  6. We are reminded of the famous speech by, Mr. E R Lindleyv, in which he alluded to the Average Adjusters being beneficial parasites. We believe that Surveyors also fall under the similar class of beneficial parasites and therefore would welcome the Survey industry to consider ways and means to optimize their use / engagement, particularly when the N Covid 19 era has tested the industry in many ways including provision of access. Perhaps, we are being very simplistic and therefore would be happy to hear from both the survey industry and users to see whether the survey practices could be optimised to better suit their needs. 

i. Capt Harry was the author of the Nutshell Series and which includes Nautical Watchkeeping, Marine Meteorology, Ship Stability at the Operational Level, etc.
ii.  Capt Zarir Irani is the Founder and Principal surveyor at Constellation Marine Services.
iii. Capt John Noble has a chequered survey career and is presently a Director at Constellation Marine Services.
iv.  This is indeed not a novel question and many others have raised the same question. The author recalls that his former boss, Mr. Robert Gordon, the founder and the then Managing Director of Seasia P&I Services had raised this during discussions in one of the seminars which he attended.
v. Mr. E R Lindley, the then Chairman of the Association of Average Adjusters in his address to the association in 1904 stated “The use of the adjuster individually is to grease the wheels of commercial machinery, to do work which neither the assured nor the underwriter have either time, training or inclination for, in such a manner as to expedite settlements without resort to the expensive machinery of the law: His duty is act fairly to both parties to the contract of insurance or contract of carriage, to set down all material facts, withholding nothing of importance, to present the figures of the suggested settlement in such a manner as to be capable of being easily grasped, and above all, in all cases wherever definite law or practice is not clear, to place the matter before the parties interested in such a manner as to facilitate an agreement between them. Adjusters acting in this sense well deserve the name of beneficent parasites

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  1. Peter Meijer

    I fully agree with your opinion of the independent position of an appointed surveyor, never mind the type of (damage) case. Bringing this subject up as early as possible will lead to a much more structured investigation in which ships’ crew members will not have to answer the same questions for two or three times, resulting in one report for all parties concerned without discussions on differences in several reports of more surveyors at the scene.
    The question remains if this would have been accepted in a case like the Ever Given, where an enormous pressure was present due to the large amount of involved parties, not at least due to the fact that the whole world was informed on a 24 hr basis by the press.

    • Jagan

      Thank you for your comments.
      With respect to your query, the size of the casualty should not be an issue. As you correctly point out, there would be obvious advantages to all for the joint engagement of a surveyor. If the parties agree to jointly appoint a surveyor and be bound by the surveyors findings, then the surveyors report should be accepted subject to any clarifications which may be raised by the parties. We suspect that the issue would be more with the trust deficit rather than the surveyor’s report.
      Thanks and best regards,

    • Peter,
      Would you believe if I told you that even in the remotest ports, some of the island nations in particular, where there is only one qualified surveyor (most of the times) empaneled and trusted by most Prominent underwriters and/or clubs, he is not used for giving out one independent report for 2 underwriter’s interest , both of whom he may have been empaneled (say cargo, hull and/or clubs). It is prevalent practice even at the cost of delay in collecting and enormous expenses that they fly surveyors in to get an independent report on their table. It’s what the market dynamics and trends have become, hard to imagine but healthy for a professional Surveyor’s bank balance who knows what he is doing with his profession.
      Doubt this will change

  2. I think, terms of all interested parties to appoint a joint surveyor is
    1. his fees and costs is agreement to be shared no matter what the report says. Estimated fee deposit is escrowed.
    2. The report shall not prevent/preclude any party aggrieved (but will be as prejudicial as it should be) with any part of the report to appoint another survey to obtain a 2nd opinion.

    • Jagan

      Dear Mr Cheok,
      Thank you for your comments below.
      We entirely agree with what you state and given that the surveyors are engaged more often by the insurers,we believe that an in principle agreement could be agreed by the Insurers basis what you suggest.
      Thank you for your comments.

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