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Multi-party dispute involving professional negligence claims and the purchase of a tank farm

Facts

Client: International oil company

Country:UK

Industry: Energy

Issues

The client, an international oil company, needed a facility in the UK for storing jet fuel. It obtained a report from a specialist pipeline engineer about the condition of an existing facility along with a schedule of works required to bring it up to modern standards. On the strength of this report, a purchase price for the tank farm was agreed.

However, it turned out that there were problems with the report, which led to the client incurring unexpected time and budget overruns.

The contractual arrangements were such that a claim could not be brought directly against the original engineer and professional indemnity insurers also became involved.

Solutions

Fenwick Elliott developed a number of solutions to deal with the complex issues at stake. The drafting of a name-borrowing agreement allowed the client to commence litigation directly against the engineer thereby avoiding multi-party litigation. Technical experts were instructed and missing documentation obtained. This enabled the client to understand and assess the strength and weaknesses of the case.

From this position, commercial negotiations could be arranged and a settlement reached.

Benefits

By adopting a pragmatic and commercial approach, a prompt and economical settlement was achieved.