In 2015 the realization had set in that Wanderlust had more than usual amounts of teething problems. It also became clear that the builder clearly understood that the boat he built had serious problems, many which dated from launch. Nevertheless the builder was not interested in making repairs. While minor tweaks and easy repairs were done early on the more expensive and difficult to repair items collected ignored on the snagging list.
By the end of 2015 the relationship with the builder had broken down completely. The builder was now unwilling to visit Wanderlust to check out the fuel leak if we were on board. Our conclusion was that they did not want us to see what they were doing. Would any reasonable owner would accept a requirement that warranty repairs can only done in their absence? Why was it important for them that we weren’t there?
We would have thought that it was in the best interest for all parties for the builder to fix all that they could easily repair and to come to an understanding about some of the other problems. All we wanted was for Wanderlust’s most serious problems to be resolved expediently. But the builder wasn’t interested in that. We never understood why. Was the builder afraid of establishing a precedent that could be applied to his other boats some of which had similar complaints?
On February 5th 2016 the builder suggested that we could return Wanderlust from France to her point of delivery on the Thames to reduce costs. It would be a long journey for us with uncertainty whether the repairs would be made.
In response we came back with what we thought was a far more generous solution: We offered to pay to ship Wanderlust back to the builder’s plant in the British Midlands so that repairs could be made. We would bare the costs for now and the parties, or their solicitors, could determine later a fair way to divvy up the trucking and cranage fees. This made sense to us as well as to the experts who had seen Wanderlust’s issues first hand. In fact the experts who has seen Wanderlust all were surprised that the builder had not offered to take the boat back to his plant already. The repairs were sufficiently difficult that it would be complicated to execute them on the water in France or on the Thames.
Though we thought we had offered what we felt was an exceedingly generous compromise the builder did not feel the same. The next communication came from the builder’s lawyer. We were told that all communications would now go through the solicitor. The builder’s message was clear: He preferred to litigate rather than repair.
For us this was gutting. There would be no easy or fast end to Wanderlust problems. Our only choice was to hire a solicitor.
Wind forward a year and a half to the fall of 2017. Our legal costs (including surveyors) were in danger of breaking £50,000. The builder had resisted all of our offers to settle. In the spring we had offered to resale the boat to them at our full cost, to return Wanderlust to them so that they could make repairs of the problems detailed in our surveyor’s reports, and to settle financially at a fraction of the costs we would incur in making the repairs ourselves. These offers were ignored.
At the same time we uncovered several more troubling problems that were also going to be expensive to repair. All told our full claim, including our loss of use and legal expenses was now pushing over £250,000. It looked for sure like the dispute was headed to court. If it did go before a judge the legal costs were projected go up by a factor of three or four, not all of which we’d be likely to recover. With legal costs on both sides and the cost of repairs something close to a half million pounds was at stake, far in excess of the price paid for the boat.
This seemed crazy to us. We don’t know what the builder was thinking. Indeed, it seemed to our experts and us that they simply were not thinking things through at all. Perhaps builder figured we could be bullied: We’d just give up and cut our losses, as soon we were aware of how expensive the dispute would become. That approach may work on some. Perhaps it has worked on some. But at this point we felt that our case, supported by three experts and a solicitor, was strong. We may not gain anything financially from the dispute overall but it seemed unlikely that we’d be in a worse situation at the end.
At the end of August 2017 the builder broke and proposed mediation. There was a catch. The builder was proposing a mediation that did not include having the surveyors present. It could be argued that this was done for cost reasons; the surveyor’s time would be very expensive. But it would also put us in a difficult position. If there were a technical dispute the builder would be granted credibility as a de facto expert, as he would in court. Our input would not enjoy the same presumption of validity, whether we had a good grasp of a particular underlying technical issues described in our surveyor’s report or not. This arrangement seemed intrinsically unfair to us.
After a few more rounds of expensive letters from the lawyers it was agreed that the builder would send a “non-expert”, the company’s chief financial officer, to the mediation. Further, a discussion of the technical merits of the dispute would be off limits. The reports from the surveyors would be available, but they would not be litigated. Only a financial remedy and other conditions for the settlement would be discussed.
To clear the road for mediation the builder formally rejected remedial works offer. Our detailed remedial works plan was rejected based on a single ground: They would not warranty the paint, new or repaired, for more than a year. Their claims in their promotional literature of a high quality paint job with a long life and of a 10-year warranty for an underwater coating were just words. If I were a potential customer I would find this to be extremely concerning. The cost of repainting a boat with a defective paint job is a large fraction of the price of a new boat. If there is one thing that a boat builder must stand behind it is the external paintwork.
In the absence of a discussion of the merits of the dispute there seemed to be little point to sitting down in person with a mediator. Between travel, mediation expenses, and solicitor’s fees it would cost both parties well over £10,000. We saw no reason why a financial settlement should not be first attempted through the usual channels.
It came as a surprise to us when the builder did agree to negotiate remotely. Nothing much had changed since we made an offer to settle at a substantial discount to the full claim in March of 2017. This offer could have easily been accepted at the time. At any point in between the builder could have pushed out a counter offer. Doing so would have saved more than £30,000 in legal costs combined for both sides. In the end the delay cost the builder a substantial amount of money and perpetuated our angst over the whole affair. The dispute was stressful and took a personal toll on us, something that we will never be compensated for.
Once it was agreed to negotiate remotely it took a short period of time to reach a financial settlement figure. We had already discounted our claim significantly. There wasn’t much motivation for us to drop further. It was the builder who needed to come up.
What did take time, and further run up the legal costs, were the negotiations for some of the other non-financial details. The biggest sticking point was the language around a non-disclosure agreement.
Builders commonly include non-disclosure clauses when they settle a lawsuit to “protect” their interests going forward. In my opinion this practice does a great disservice to future customers considering have a boat build; it stifles the free flow of information concerning build problems.
As a matter of principle we are opposed to the idea of a NDA. Past that there were other practical issues that made a NDA problematic. Much of the information surrounding the dispute with the builder had already been discussed with others. How can you hide that a problem is a manufacturing defect when you discuss remedial work with a boatyard? It was already common knowledge that Wanderlust had numerous defects from her build. That could not be taken back.
There was also history. The builder had included a joint non-disclosure stipulation in an earlier offer to settle. Though we carefully abided by this confidentiality request, the builder did not. When we heard the terms of builder’s offer repeated to us by a boatyard owner in France we knew that the builder had violated his own non-disclosure clause. It is hard to agree with to mutual confidentiality when one party has already violated a similar agreement. We certainly were not going to sign a one-sided agreement.
In the end we burned somewhere around £1,000 in legal costs over two months to assure that the language for the NDA was reasonable. This time, effort, and money are the reasons I can share much of our story in the blog.
There’s one thing we can’t disclose: Both parties did agree to not disclose the final settlement terms.
What I can say is that the settlement amount was likely not enough. When repairs were begun it became clear that several of the problems were more expensive and difficult to fix than we imagined. If the dispute had continued on until the remedial work was completed we would likely have been looking for a settlement figure several tens of thousands of pounds higher.
That’s the downside. The upside was that nearly three years after we first spotted diesel fuel coming into the bilge we were finally in position to begin repairs. Five years after launch we could actually fix several of Wanderlust’s problems that were apparent at launch.
At the end of 2017 we figured the repairs would take a few months to execute. Worst-case scenario Wanderlust would be back to cruising in the summer of 2018, we thought. We were wrong. As I write this at the end of 2018 the repairs are still not completed. It took six months for the builder to construct Wanderlust. It will take well more than twice as long to resolve the defects from manufacturing.
When we decided in 2012 to buy a barge we chose to go with a new build so that we’d have fewer problems to deal with. If we did encounter problems they would be resolved, the builder and his customers told us. A new boat, we figured, would mean that we would not spend our time in France making repairs. That did not prove to be the case.