Important announcement from Lanarkshire Models

[Dave Franks]

From today 18-07-16, Lanarkshire Models & Supplies will no longer be able to supply any items to North America.

With the start of a new insurance policy and the prospect of a huge increase in premium we have decided to take their advice and stop sending our goods to America and Canada. Believe it or not the saving on the premium is the same as the sales to North America over the whole of 2015 so it is with regret that we take this action but it is purely on business grounds.

The insurance company is happy for us to sell to all other countries.

On asking around other suppliers in the hobby it seems it is becoming a common problem and as one trader has said these companies don't have a policy for our type of cottage industry, believe me I've tried.

All the best,

Dave Franks.

[David Knight]

Oh bother (or words to that effect)! I am sorry to read this Dave as I was getting ready to order some buffers. This is not the first time I've encountered this problem as the same thing happened with Mainly Trains some time ago. Did the insurance companies deign to explain why we over the seas and far away have been frowned upon? What makes it more puzzling is that the two countries are not alike in terms of being litigious, Canada being far more benign about suing for misadventure.

Cheers,

David

PS If I send a signed piece of paper promising not to sue if I swallow a buffer (or whatever) will that make any difference?

[Will L]

Isn't there a work round her were somebody in the UK purchase the goods then sends them as a present to the person in the US/Canada as thanks for a previous gift of cash?

[David Knight]

Isn't there a work round her were somebody in the UK purchase the goods then sends them as a present to the person in the US/Canada as thanks for a previous gift of cash?

It's a bit of a faff but it may well come down to that. Ideally the person on the UK side would have a PayPal account to simplify things on the money end.

Cheers,

David

[garethashenden]

It seems that Parkside Dundas stock most if not all LMS products. I think they can be ordered from them and sent to North America. It's not that the products can't go there, it's that LMS can't send them. Cambrian kits are in a similar position and ordering from a stockist is the work around.

[dal-t]

Did the insurance companies deign to explain why we over the seas and far away have been frowned upon? What makes it more puzzling is that the two countries are not alike in terms of being litigious, Canada being far more benign about suing for misadventure.

Looks like you've got the Isle of Wight problem there - not the recent inbreeding controversy, the fact that with half the island falling into the sea and the other half as stable as the rest of the mainland, insurers resolutely refuse to cover anything with an IoW postcode*. Canada may take a sensible approach to product liability, but the US doesn't, and to insurers you are both 'North America'. The retailer workaround may well be feasible for the moment, but I suspect if the other David raised the issue with his insurers they would say he must advise retailers not to supply either, because liability would ultimately come back to him (Dave) as manufacturer, even if some snotty-nosed yoof in Manhatton tried to sue Parkside or Hattons or anyone else in the first instance. How do US-based 'cottage' manufacturers cope, I wonder - close their eyes and hope to stay under the litigation 'radar'?

*At least, that was the historic situation. I think the industry has since had its wrist slapped by Government and been told to offer something, however heavily weighted, to the 'safe bet' properties.

[Noel]

How do US-based 'cottage' manufacturers cope, I wonder - close their eyes and hope to stay under the litigation 'radar'?

Presumably, since they are operating in the same jurisdictions as their insurers, they do not face the same added cost to their insurance. Note that Dave Franks can get insurance, he just doesn't regard it as economic, a commercial decision which he is perfectly entitled to make. Cambrian models also will not supply to the USA and Canada for insurance reasons and have not for some time.

The retailer workaround may well be feasible for the moment, but I suspect if the other David raised the issue with his insurers they would say he must advise retailers not to supply either, because liability would ultimately come back to him (Dave) as manufacturer

Assuming the UK retailer is not acting as an agent for the supplier, but is selling what is at the point of sale his own property, this is questionable. Firstly the retailer will presumably have his own insurance for sales to North America, if he sells there. Secondly, even if the UK retailer is held liable under United States law, his contract with his UK supplier will presumably be a matter of English or Scottish law, and judged accordingly. Anyone concerned about such aspects would need to obtain competent professional advice.

[David B]

Can someone explain what this insurance is for? I don't understand what problem there can be, other than something going astray, with sending, say, a set of 4mm buffers. Quality should not be a problem as I am sure the manufacturer will have checked before sending, so . . . ?? I must say I am baffled. If it is fear of the word 'litigation', then for what? If I sell something to a person in the USA through Ebay, am I expected to take out insurance and if so, for what?

If, as has been suggested as a workaround, I were to buy a set of buffers on behalf of someone in N America and send them on, is that something I should be concerned about?

I seek an answer for my education.

[Maitland]

Can someone explain what this insurance is for?

It should be for stuff like you've mentioned, but what frightens insurers off is potential liability. Your 60p plastic buffers go to the USA. K.C. Jones Jr finds the packet and puts the contents in his mouth and has to be rushed to hospital to get the buffers dislodged from his windpipe. K.C. the Pop now faces a $100000 dollars medical bill. He sues you, and the courts find for him on the grounds of your negligence. Your or your insurers have to pay the bill plus another $50000 legal costs.

It wrecked my business, I simply couldn't get insurance because I'd exported stuff without thinking.

If I could find out who started all this litigation culture, I'd sue them.

[Noel]

Can someone explain what this insurance is for? I don't understand what problem there can be, other than something going astray, with sending, say, a set of 4mm buffers. Quality should not be a problem as I am sure the manufacturer will have checked before sending, so . . . ?? I must say I am baffled. If it is fear of the word 'litigation', then for what? If I sell something to a person in the USA through Ebay, am I expected to take out insurance and if so, for what?

https://www.abi.org.uk/Insurance-and-savings/Products/Business-insurance/Liability-insurance/Product-liability-insurance from a UK viewpoint.

https://en.wikipedia.org/wiki/Product_liability for a US view.

It does not apply to individuals selling occasional personal items they no longer want, but sell the same or similar items too often and a court might decide you are a supplier or distributor.

[David Thorpe]

Even if KC Jones was to obtain such a judgment in the USA I think it highly unlikely that he would be able to enforce it against a Defendant resident in the UK.

DT

[David B]

Thank you for the links.

It seems to me to be a matter of considering the risk with a particular product. All too often, insurance is taken out unnecessarily, the insurance companies benefitting from a portrayal (not necessarily by the insurance company) which plays on our fear by introducing uncertainty. It is often the case that an insurance is not necessary.

[Noel]

It depends on your point of view. One risk with products liability is that multiple complainants may have been affected before the problem with the product becomes obvious. Even a small claim per person can quickly mount up if many people are claiming. Insurance is one of those things which most people will never need; however, if you do need it, you may need it big time. In a different context, just consider what your insurers will have to deal with if you accidentally cause a major crash on a motorway...

[Noel]

Even if KC Jones was to obtain such a judgment in the USA I think it highly unlikely that he would be able to enforce it against a Defendant resident in the UK.

Depending on circumstances, your assumption may not be valid. There are ways of enforcing certain judgements of foreign courts through the courts in this country.

[Philip Hall]

I have read through the two links above, in particular the Wiki entry, and it all seems to hinge on defective or badly manufactured items, which certainly doesn't apply to LMS products. Now suppose Dave sells a packet of SR buffer stops and some wagon buffers to someone in the US, and specifically puts a note on the packet that they are not for human consumption and for modelling purposes only, surely this ought to be enough to keep him free from claims?

If not, then the world has truly gone completely bonkers. But then, since the Americans started all this blame culture where you can sue for almost anything, and should sue for almost anything that happens to you, maybe it might be bonkers but is actually happening!

Philip

[David Thorpe]

Even if KC Jones was to obtain such a judgment in the USA I think it highly unlikely that he would be able to enforce it against a Defendant resident in the UK.

Depending on circumstances, your assumption may not be valid. There are ways of enforcing certain judgements of foreign courts through the courts in this country.

There are indeed, and it is not difficult in the case of EU or many Commonwealth court judgments. However, the USA falls under neither of these catagories and has no reciprocal enforcement treaty with the UK (or indeed with any other country). My understanding is that judgments of US courts can only be enforced in the UK under common law and would only be possible if the Defendant was present in the USA when the action was commenced or if the Defendant had willingly accepted the jurisdiction of the US court.

DT

[jasp]

It is unfortunate, but perfectly understandable, that Dave has made this decision - it is his livelihood!
Fortunately there are ways round as outlined in the thread: via Parkside or through a friend in uk so, essentially, problem solved.
Jim P

[Jol Wilkinson]

I have read through the two links above, in particular the Wiki entry, and it all seems to hinge on defective or badly manufactured items, which certainly doesn't apply to LMS products. Now suppose Dave sells a packet of SR buffer stops and some wagon buffers to someone in the US, and specifically puts a note on the packet that they are not for human consumption and for modelling purposes only, surely this ought to be enough to keep him free from claims?

If not, then the world has truly gone completely bonkers. But then, since the Americans started all this blame culture where you can sue for almost anything, and should sue for almost anything that happens to you, maybe it might be bonkers but is actually happening!

Philip

Does that mean I can sue anyone responsible for those annoying "had an accident because you weren't looking where you were going?", "suffered at the hands of the NHS?" and "took out PPI?" because they raise my blood pressure?

[Andy W]

You'd never be out of the courts Jol!

Surely if Casey Jnr swallows a small item off Snr's workbench, isn't dad responsible? Why is the supplier involved in this litigation at all?

[Noel]

My understanding is that judgments of US courts can only be enforced in the UK under common law and would only be possible if the Defendant was present in the USA when the action was commenced or if the Defendant had willingly accepted the jurisdiction of the US court.

I don't know about the USA, but most UK courts dealing with civil commercial/financial matters will give default judgement for the plaintiff if the defendant fails to respond to the complaint or fails to turn up for the hearing(s) (if any). The only proviso, AFAIK, is that all necessary steps have been taken to notify the defendant.

I have read through the two links above, in particular the Wiki entry, and it all seems to hinge on defective or badly manufactured items, which certainly doesn't apply to LMS products. Now suppose Dave sells a packet of SR buffer stops and some wagon buffers to someone in the US, and specifically puts a note on the packet that they are not for human consumption and for modelling purposes only, surely this ought to be enough to keep him free from claims?

Packaging, instructions and warnings [or lack thereof] can also come into it. One problem with liability claims generally is that they don't have to be reasonable. Insurers will still have to deal with claims of little or no merit, and may not be able to recover any costs from the unsuccessful plaintiff.

[Philip Hall]

Surely an insurer should not be entertaining an unreasonable claim? Generally they have a reputation for not paying out unless they have to, so why pay out when the claim is clearly spurious or unreasonable just because it's a case of liability? Strikes me as crazy...

Philip

[Andy W]

When they buy a gun in America does it come with a health warning? I doubt it. Madness.

[Noel]

Surely an insurer should not be entertaining an unreasonable claim? Generally they have a reputation for not paying out unless they have to, so why pay out who the claim is clearly spurious or unreasonable just because it's a case if liability

Insurers have to deal with all claims made against their insured, it's part of the contract. A claimant makes a claim against the insured, the Insurer says "no", the claimant issues a writ, and the Insurers have to respond to that, with all the costs involved. It then possibly goes to court, at which point the insurer makes decision about whether it is economically sensible to fight it, or offer a settlement. If they fight it, and win, the claimant may then go to the Court of Appeal, and potentially the supreme court. Even if the insurer wins, the costs incurred in defending the claim have grown exponentially...

[Proto87Stores]

The issue is presumably US product liability, which is typically only determined to be greater than your sensible disclaimers, if a successful lawsuit ensues. And defending even a false or frivolous lawsuit can be wildly uneconomical. And of course, UK insurers won't pay to take on extra knowledgeable staff who can assess your particular product type's risks more reasonably.

This is a problem because you are a potential supplier to US end users/consumers. I doubt the insurers would object to you formally supplying a US distributor (or a US manufacturer as a component supplier), under a trade agreement with limited liability, as FOB your UK address, except for goods not as specified.

Andy

[Dave Franks]

Hi all, I've been keeping quiet and reading the responses with interest.... Speaking to fellow traders/manufacturers over the past few months some of which don't have any insurance what so ever, a bit naive one might say but it is coming to the point that to protect oneself from real or spurious claims from anywhere not just North America you've got to have some liability insurance, it's not for 'lost packages' or 'missing cheques' but in case of accidents - someone tripping over your boxes at a show, someone not looking out for sharp etches, someone leaving a small part out for a kiddie to chew can all result in a claim which could well be thrown out but you still have the cost of your lawyers and your time etc. Think about that for a moment. I don't want to lose my house, my cars, my livelihood or what savings are in the bank and so I can sleep at night I've always had business insurance only these days the insurance companies are getting the jitters and making us all jump threw hoops and making a lot of conditions with which we have to comply or all the cover is voided.

Big companies like Hattons or Walthers will have world wide liability insurance and in the overall turnover of their businesses it will be a small cost but in our sort of cottage industries that cost is a big overhead to be added to all the other costs of running the ship.

I've now heard of a number of our cottage industry brethren that are not sending to the US so I'm not alone and I think it will get worse before the insurance companies and Small Business Associations get their act together.



Today I was looking at VW car parts on the internet, the parts I wanted were to come from Germany so I looked at the T&Cs and guess what, they don't send to the States....



All the best,



Dave Franks