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General Forum: Monday 2nd October 15.15 - 16.00 Marcus Iles - ITIM and Scott Singer - Sinclair Roche and Temperley |
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"LegalPitfalls.com"
Welcome to the forum 2000. You will be aware that this conference has an "e" feel to it, and it is clear that the transport industry, and yes, the shipping industry too, are increasingly using the internet as part of everyday business. This talk is entitled legal pitfalls of dotcoms. In its truest sense, a dotcom is a company that survives solely because of the internet. A dotcom may be an information portal, or an auction house, as examples, both of which could exist in "real life", as well as electronically and a dotcom may well be the result of a reinvention of a company that was previously such a "real life" business. The fact that very few dotcoms have failed to provide freephone telephone numbers to complimentary call centres, also shows us that many dotcoms still maintain a link to more traditional methods of sales and customer service. Still, a dotcom should provide its services through, and therefore exist primarily because of the internet. Therefore few of us in this room will be representing dotcoms, if we use this definition. However, although we may not be dotcoms, none of us can say that we have unaffected by the internet revolution. The fact that you are all professionals in the transport industry, performing services that have survived for many many years without the internet, does not mean that you will not now be thinking of ways to use electronic communication to optimise the services you provide. Of course, many of you may very well be thinking of providing new internet based services to your customers. Whether or not we have any plans to expand into cyberspace may be immaterial, as, if they are not already, your customers are likely to insist that you provide information or specific services to them electronically. Dotcoms or not, the challenge is to ensure that we are using these new tools effectively and safely. Just because we do "real life" business, does not mean that our on-line presence must be restricted to that of a pretty brochure, with a few contact names, but we must be aware of the implications of and pitfalls in providing dotcom products to our customers, and of using the electronic tools increasingly relied upon in our offices. ITIC has been involved with members who have set up websites providing both accessible data, and on-line trading systems. However, from a claims point of view, the pitfalls we more regularly come across (at this point in time anyway\) involve a more popular method of providing electronic information. Most of you, I suspect are by now taking for granted the use of electronic mail in your day to day business. It allows you to see a mass of information, and provide information and advice without leaving your chair, but there are also telling signs that emails can also cause problems. One example recently reported to itic concerned a shipbroker who was negotiating the details of a fixture directly with 2 principals. The final clause on an offer ended in 2 separate paragraphs, each of 2 lines. When the broker forwarded the message, the system ignored the blank line between the paragraphs and forwarded it as a single paragraph of 4 lines. The recipient counter- offered on the basis that the last paragraph should be deleted referring to the 4 lines as received. The counter offer was accepted on the understanding that the last paragraph only referred to the last 2 lines, as sent. This could easily have been avoided by using numbered paragraphs, and the use of common sense is clearly required when relying on email. Personal email addresses can be a dumping ground for stray, but important emails, particularly if the owner of the mailbox is out of the office, or on holiday, and has failed to set up automatic forwarding or a warning response. A ship agent and a member of ITIC recently notified us of a claim. In order to meet a shipment deadline on a feeder service cargo had to be booked by twelve noon. The agent, however, went out to lunch without checking his e-mail messages until his return at 2pm. The booking had been received in time but it was too late to make arrangements for the sailing. It is also clearly important to take care when drafting and sending emails. The "quick click" benefit of this type of communication can be the cause of problems too. We received a claim notification involving a charterer who invited tenders for a long term time charter. The Member, a ship broker, sent his principal’s bid via an industry message system to the charterers mailbox in the United States. The bid was, of course, commercially sensitive. The Member, as is normal, used an address code for the charterer but unfortunately the American system interpreted the code as a mailing list. The principal’s bid was therefore sent to a number of other owners. The principal did not secure the business and claimed his bid was under-cut as a result of its inadvertent publication. A matter recently reported in the press was of a similar nature where an internal memo discussing details of a proposed 6 month contract of affreightment was accidentally put on the wrong email list, and was sent to a number of brokers in the market. Email is used for personal and business use, and it is also important to avoid situations where a seemingly harmless remark made in a message, eventually causes offence. There have been law suits for slander based on internal emails which have included comments on a competitors market standing. I saw an email not long ago, which some of you may have also come across. The original message was a very embarrassing declaration of love made by a young American air force cadet, to a young lady who, instantly appreciating the comedy value and presumably not much impressed, had sent it straight to her friends, who had done likewise. By the time the email had got to me, the original message was nearing its first anniversary, and had clearly passed through thousands of computers and several countries. I sent it on to a friend in South Africa. The point is that a throw away remark included in a message sent by email, may or may not be thrown away by the recipient. It is important that Members ensure that their systems can cope with the pressures upon them. A liner company introduced a system for worldwide container control. The Member was one of their agents and a single terminal was installed in their office. There was unfortunately a slump in demand for the line’s Far East service and during a six month period an unusually large number of leased containers were landed at the agent’s home port for redelivery. The two staff members charged with sending messages to the computerised control system were overwhelmed. Entries in relation to about a 1,000 leased containers were not made. The containers therefore remained on hire from their leasing companies and in storage at the principal’s expense. The principal claimed substantial damages from the agent as a result. A problem which may be slightly harder to avoid was encountered by one Member who recently reported that their e-mail service provider had ceased the service for a number of hours. The Member’s customers had sent messages onto the Internet via their own service companies but, unlike telex or fax systems, were not immediately aware that their messages could not be received by the Member. In a similar case where the technology itself appeared to be the cause of the problem, a ship broker was instructed by his principal to confirm re-delivery of a ship to its owners. He sent the notice of re-delivery to the owner’s broker in the Far East by e-mail, and requested confirmation of receipt. The owner’s broker received the message, but when he viewed it, it was blank. However the system confirmed receipt to the Scandinavian broker. The owner’s broker had no idea what the message concerned. The charterer’s broker assumed that the re-delivery notice had been received and accepted. The owners refused to accept re-delivery of the vessel and a substantial claim was made against the Scandinavian broker.
The speed with which email transfers information is one of the primary reasons for its popularity and effectiveness as a business tool, and yet, unless more time is spent setting up systems, such as shared mailboxes, and out-of-the-office responses, and unless time is taken to check messages before they are sent, the cost savings of using email can easily be outweighed by the value of such a claim.
Thank you. I would now like to pass over to Scott who will continue with the theme of providing information electronically. |