Submarine Cable Damages
Economic Advice in Litigation
The Situation
The installation and start up of a new fiber optic submarine cable system was delayed as a result of damage to the cable sustained during transportation. The cable operator made an insurance claim seeking damages arising from the loss of profits that it suffered as a result of the delay. This claim led to the dispute being heard before the UK High Court (Queen's Bench Division) Commercial Court.
NERA's Role
NERA Special Consultant Nigel Attenborough was retained as an expert witness by the insurer and performed a review of the state of the market for submarine cable capacity. This involved detailed analysis of the relevant economic factors, including the supply and demand conditions in the market, inventories of previously purchased capacity, and capital expenditure constraints that telecommunications operators were suffering from during the relevant time period. The conclusions were that the cable operator had not suffered any losses as a result of the delay.
The Result
The cable operator withdrew its insurance claim before the matter was brought to court.
