THE London P&I Club ended its 2004/2005 financial year in a healthy position, with free reserves of $100m, and the thirteenth consecutive year of deferred calls within budget.
The group said that the stability of the Club's own retained claims pattern, which has been a feature of recent years, was maintained, despite an increase in the last two months of the year in both own and International Group pool claims.
The Club's favourable Pool record will result in a lower contribution to the International Group Pool in future - this at a time when the Pool cost has been rising.
At the February 2005 renewal, the Club recorded a further eight per cent increase in quality tonnage. Almost 45 per cent of the Club's entered tonnage is now under ten years of age.
Writing in the Club's Annual Report for 2005, Chairman John M Lyras, noting that the higher claims might simply have been a result of normal claims volatility, said, "I am pleased to say that the Club's strong financial base has been maintained. It would be unwise, however, to become complacent, and we are therefore monitoring the situation carefully."
Lyras reported that investments had performed better than expected, despite adverse currency movements. But he warned that the decline of the US dollar had continued to have a negative effect, with many of the Club's expenses incurred in Sterling.
In his report, Mr Lyras expressed concern over the increasing trend towards criminalisation of seafarers and shore personnel, whose errors have led to accidents. He said, "Despite some initial signs of recognition in the European Parliament of the negative effect of criminalisation of those who are guilty of the sorts of errors that even the best of us are susceptible to, legislation has been issued from Brussels which will have such an effect.
"The Commission, in endeavouring to justify its actions, points out that only the 'seriously negligent' will be prosecuted; but I am afraid that those of us involved in shipping and P&I frequently see cases where the interpretation of that sort of term is stretched to encompass cases where the consequences of the negligence are 'serious', but where criminal culpability is non-existent. This development will actually undermine safety, rather than enhancing it, by discouraging responsible and valuable personnel from pursuing a maritime career.
"The threat to the safe manning and management of ships, along with its potential consequences in respect of P&I claims, is something which should not only be of great concern to us within the industries involved, but it should also be so for the public at large".
