Marine surveyors urged to strengthen due diligence

A US$30,000 off-spec grain cargo claim directed at the wrong surveyor has prompted International Transport Intermediaries Club (ITIC) to warn marine surveyors of the liability exposure they face when the scope of their instructions is not precisely recorded.

A marine surveyor was appointed by the seller of a grain cargo to conduct a joint survey at the load port. The buyer accepted the cargo and subsequently sold it on. At the discharge port, the ultimate buyer and consignee alleged the grain was off-spec due to the presence of ambrosia seed and other impurities.

After the cargo was resold at a discount, the original buyer pursued a loss of US$30,000, first from the seller and then from the seller's surveyor, alleging the joint survey had been negligently conducted due to a failure to test for specific parameters.

During its review, ITIC found that the surveyor had acted strictly within the scope of the instructions provided by the seller. Critically, the buyer had appointed its own surveyor to attend the joint survey, operating under a separate and different set of instructions. The seller's surveyor owed no duty of care to the buyer. The claim was misdirected and there were no grounds for legal action.

Mark Brattman, Claims Director at ITIC, said: "This case shows how vulnerable marine surveyors can become when parties later assume that certain checks or tests should have been carried out, even where those tasks were never part of the agreed instructions. Once a cargo quality issue emerges further down the chain, there can be a temptation to look back at the original survey and try to attribute responsibility to it."

The case carries a particular warning for marine surveyors working in grain and agricultural commodity trades, where disputes over quality parameters are common and industry expectations around testing can vary. Where a test falls outside the scope of a surveyor's instructions but might reasonably be expected as standard practice in that trade, the absence of that test can become a point of contention, even where no formal obligation existed.

"In cargo and commodities trades, disputes often arise after the commercial position has deteriorated and losses need to be allocated. Good documentation is one of the strongest protections available to surveyors. If a principal instructs you not to carry out a check that would ordinarily be expected in that trade, record that instruction and reflect it clearly in the report. It closes the door on assumptions before they become allegations," Brattman said.

ITIC urges surveyors to ensure their scope of engagement is agreed and confirmed in writing before work begins, and that survey reports state explicitly not only what was tested but what fell outside the agreed parameters.