File reviews and small claims
The LMAA Small Claims Procedure offers parties the ability to have unresolved disputes referred to an arbitrator for a fixed fee of GBP 3,000. If lawyers are used, there is also a right to recover up to GBP 4,000 in legal costs for the successful party.
The initial outlay of GBP 3,000 is high but the London arbitrators will return a percentage of that fee if the case settles in the early stages i.e. before Claim Submissions are served or before a defence is served. Small claim matters can often involve “tricky issues” even though the disputes themselves are not for large sums of money. The LMAA have recently issued revised guidelines reinforcing the rule on the maximum number of words that submissions can contain. They have also indicated that they would be penalising the parties in costs, if issues are raised in the Reply Submissions which ought to have been raised in the Claim Submissions.
“In cases therefore where in the opinion of the arbitrator a claim is insufficiently pleaded in Letters of Claim (or Counterclaim) under the Small Claims Procedure, the arbitrator may order the claimant (or counter-claimant) to re-serve more fully pleaded letters of submission that comply with Paragraph 5 of the Procedure and time for service of any Defence (or Defence to Counterclaim) will not begin to count until such letters of submission have been served. Where, in the opinion of the arbitrator, costs are increased because the Claim (or counterclaim) was inadequately pleaded or was not supported by appropriate evidence, any additional costs incurred in consequence may be awarded against the party whose letters of submission were deficient, regardless of the outcome of the case.”
LA Marine has considerable experience in dealing with the LMAA SCP claims. We feel that the club and its assured/members should be able to have a clear idea of recoveries when handling these claims. LA Marine therefore provide a fixed cost service for conducting SCP claims and will not charge more than GBP 4,000 for handling an LMAA SCP matter. This should streamline costs recovery issues for insurers and their assured/members.
Fixed Costs – File Reviews
LA Marine also offer a fixed costs service for reviewing the legal merits on files as we are aware that this can also be an area where there is concern over the level of fees:
- In cases with a value of USD 50,000 or less LA Marine will review the merits for GBP750.
- In cases with a value of USD 50,000- USD 100,000 LA Marine will review the merits of a claim for a fixed fee of GBP 1,200.
- In cases exceeding USD 100,000 LA Marine will review the merits for GBP 1,650.
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The English courts have had to consider whether the owners of the Lady M were liable for the wrongful or reckless act of their employee in the context of a cargo claim, brought by cargo owners (Glencore).