Decision ID: 000913

In October 1998 the 1971 Fund Executive Committee noted developments in respect of the legal action against the shipowner/insurer and the 1971 Fund for £2.8 million by a company (Shetland Sea Farms) farming salmon within the exclusion zone established by the United Kingdom Government which had been contracted to buy smolt at a predetermined price to place in cages, but due to the contamination had been forced to sell the smolt at a loss and had also suffered loss of profit through not growing the fish. It was noted that at a hearing in the Court of Session in Edinburgh the shipowner/insurer and the 1971 Fund had argued that the claim should be rejected without the necessity of a trial on the grounds that, from the way in which the pleadings had been worded, the company would be overcompensated, as it was seeking to recover loss on the resale of the smolt and loss of profit on the sale of the salmon which would have been reared from the smolt. The Committee noted that the Court had rejected the argument of the shipowner/insurer and the Fund, since in its opinion, there was no rule of law that a pursuer could never recover both loss of profits and wasted costs, but that it could not resolve the issue purely as a matter of law and that evidence had to be presented as to whether the company was entitled to compensation and, if so, to what extent. The Committee noted that the shipowner/insurer and the Fund had appealed against the Court’s decision and were waiting for further legal advice as to whether to pursue the appeal, bearing in mind that even if the appeal were to be withdrawn, there would still be the opportunity to challenge the evidence presented by the claimant.

Date: 30.09.1998
Category: Pure economic loss (fisheries and mariculture)
Subject: Loss of income from mariculture due to business interruption as a result of oil pollution