Legal Liability for Technical Certification Companies
Liability for certification societies has been litigated in civil courts under common law in the United States. In other words, there are no specific United States laws that relate to the liability of a tech certification company and any claims will be tried in civil court under common law.
According to an analysis of case law involving certification companies and their liability, there is no globally unified liability structure. Therefore, judges use case laws from around the world to draw their verdict. We examined applicable case law in cases related to the industry and found that most claims brought on by shipowners are dismissed. We identified through scholar reports, that liability for tech certification companies would be related to tort and negligence.
Laws relating to the liability of tech certification companies in the United States were identified by our research team through case law. Claims can be brought against certification agents through tort of contract or negligence depending on the particular facts of the case. Classification Societies are often sought for damages after a catastrophe has occurred because they are commonly viewed as "deep pocket" defendants. According to an analysis of case law involving certification companies and their liability, there is no globally unified liability structure.
In order to come up with verdicts, judges like Circuit Judge George C Pratt reference decisions made by foreign courts which included US case law.
The Sundancer V. The American Bureau of Shipping
In the US, the Sundancer sunk due to structural issues shortly after being certified by the society. In this case, the ABS had statutory immunity and the shipowner's case was dismissed. He appealed and lost because it is deemed that shipowners have "a non-delegable duty to furnish a seaworthy ship".
In general, cases filed by shipowners were dismissed because the classification society did not encompass the seaworthiness of vessels. The certification society is only "responsible for inspecting the conformity of the vessel with the relevant standards." The court decided that the owners are responsible for the maintenance of the ship’s condition.
Somarelf v. American Bureau of Shipping
The decision in Somarelf v. American Bureau of Shipping relates to the liability that tech certification companies have. This case involves liabilities related directly to vessel owners in the event of a catastrophe. This case involves the examination of what happens when a certified vessel is "lost through structural failure or sold to a purchaser who has placed reliance on class certification." The court concluded that vessel owners are entitled to recover damages from certification companies under tort of negligence. The decision was based on misrepresentations that appeared in the certification that was negligently issued by the defendant.
Great American Insurance Company v. Bureau Veritas
The decision in Great American Insurance Company v. Bureau Veritas involved the liability of the certification company to third parties such as insurance companies. In this case the insurance company had paid damages to the vessel owners in the sinking of a covered ship. The certification company that carried out the inspection before the ship sank was found to have acted negligently. They were held liable to repay the insurance company in damages that it incurred as a result of the loss because they had certified the ship before the voyage.
Although there are no specific laws that regulate the liability of tech certification companies they could be held liable for negligence in civil court. Somarelf v. American Bureau of Shipping found a certification company liable for damages due to misrepresentations made in their certification. Great American Insurance Company v. Bureau Veritas Classification Society determined that certification companies can held be held liable for damages incurred by third party plaintiffs such as insurance companies as well.