Shipping insurers complain over costs

AN INTERNATIONAL group of ship owners has accused the London Maritime Arbitrators' Association (LMAA) of inconsistencies in the way it awards costs during mediation disputes.

The Swedish Club, a mutual insurance group for ship owners, claims the problem could threaten London's position as the first choice dispute resolution centre for international ship owners.

The London-based club, says the LMAA rules over costs only allow clubs to win their costs back after successful cases if they have used outside legal advisers.

It says this rule is preventing it from using its own cheaper in-house legal team when it goes to the LMAA.

Toby Orford, freight demurrage and defence specialist at the club, said: 'If the LMAA wishes to promote London as an innovative arbitration centre, it needs to confront this issue.'

LMAA honourary secretary Colin Sheppard said a change in policy would be quite possible if there was a consensus of opinion among the various clubs which use the LMAA.

'If they speak with one voice then we could change the terms of the arbitrations to allow such claims,' he said.

'But at least 50 per cent do not take the same view.'