Captain Avgas
Well Known Member
The thread "Great news from the Mother Ship" has been closed. I don't want to comment on the wisdom of that closure because I don't want this thread closed too. Go here for the original closed thread. http://www.vansairforce.com/community/showthread.php?t=146949
The above thread was about the culmination of a legal action taken against Vans and it is self explanatory...and it is truly important to each and every one of us.
No-one reading this post wants to be under any misconception about the threat that ongoing legal actions represent to Vans Aircraft....and to you and me. It is not at all inconceivable that Vans Aircraft could financially buckle under the weight of a number of legal actions similar to the one being discussed.
If Vans were to collapse it would leave thousands of builders with orphaned kits and many more thousands of owners without spare parts. It would be a catastrophe of immense proportions for RV builders and owners, and it would be a catastrophe for the Experimental category at large. If the largest (by far) Experimental kit manufacturer cannot survive due to legal actions then the future for the others is grim.
In the first post of the closed thread Doug Reeves congratulated Vans on having the case against them dismissed. But that congratulations may have been premature. According to Avweb the case may not have been "dismissed" but instead settled privately. See here: http://www.avweb.com/avwebflash/news/Vans-Aircraft-Lawsuit-Dismissed-228546-1.html
There is a line of thought out there that that this is just a public liability insurance matter for Vans, and that having liability coverage is a cost of doing business that's already baked into kit and parts costs. I would suggest that is a dangerous presumption and an oversimplification of the situation. There are 3 different types of "public liability" insurance that could be relevant to Vans as follows:
Straight Public Liability insurance is relatively cheap. It would cover Vans in respect of injury or property damage related to their business activities. If a customer slips on Van's wet floor during a factory inspection and injures himself then this policy would cover Vans. But it will NOT cover Vans for Product Liability.
Product Liability insurance can be ferociously expensive and in the case of a company fabricating aircraft kits for the Experimental category it could be prohibitively expensive. Product Liability insurance protects against claims for personal injury or property damage caused by products sold or supplied by a business. Vans may or may not be able to afford this category of insurance. But even if they can afford it now, ongoing legal actions may increase premiums beyond their means. Nothing puts the wind up an insurance company like a $35 million lawsuit.
Professional Indemnity insurance can also be ferociously expensive. It covers legal liability arising out of professional advice provided to customers. In the legal case in question it was argued by the plaintiff that Van's "building instructions" (as opposed to the product itself) were flawed. Because Vans is not a professional consultancy they may not have Professional Indemnity cover. Whether Vans had insurance coverage for the claim in question might have come down to whether their Product Liability insurer (if they had one) considered the assembly manual to be a part of the product or simply professional advice.
Van Aircraft may be the biggest manufacturer of kit aircraft in the world but they are in fact only a small company and they probably have only very limited financial and personnel capacity to deal with lawsuits such as the one in question.
The above thread was about the culmination of a legal action taken against Vans and it is self explanatory...and it is truly important to each and every one of us.
No-one reading this post wants to be under any misconception about the threat that ongoing legal actions represent to Vans Aircraft....and to you and me. It is not at all inconceivable that Vans Aircraft could financially buckle under the weight of a number of legal actions similar to the one being discussed.
If Vans were to collapse it would leave thousands of builders with orphaned kits and many more thousands of owners without spare parts. It would be a catastrophe of immense proportions for RV builders and owners, and it would be a catastrophe for the Experimental category at large. If the largest (by far) Experimental kit manufacturer cannot survive due to legal actions then the future for the others is grim.
In the first post of the closed thread Doug Reeves congratulated Vans on having the case against them dismissed. But that congratulations may have been premature. According to Avweb the case may not have been "dismissed" but instead settled privately. See here: http://www.avweb.com/avwebflash/news/Vans-Aircraft-Lawsuit-Dismissed-228546-1.html
There is a line of thought out there that that this is just a public liability insurance matter for Vans, and that having liability coverage is a cost of doing business that's already baked into kit and parts costs. I would suggest that is a dangerous presumption and an oversimplification of the situation. There are 3 different types of "public liability" insurance that could be relevant to Vans as follows:
Straight Public Liability insurance is relatively cheap. It would cover Vans in respect of injury or property damage related to their business activities. If a customer slips on Van's wet floor during a factory inspection and injures himself then this policy would cover Vans. But it will NOT cover Vans for Product Liability.
Product Liability insurance can be ferociously expensive and in the case of a company fabricating aircraft kits for the Experimental category it could be prohibitively expensive. Product Liability insurance protects against claims for personal injury or property damage caused by products sold or supplied by a business. Vans may or may not be able to afford this category of insurance. But even if they can afford it now, ongoing legal actions may increase premiums beyond their means. Nothing puts the wind up an insurance company like a $35 million lawsuit.
Professional Indemnity insurance can also be ferociously expensive. It covers legal liability arising out of professional advice provided to customers. In the legal case in question it was argued by the plaintiff that Van's "building instructions" (as opposed to the product itself) were flawed. Because Vans is not a professional consultancy they may not have Professional Indemnity cover. Whether Vans had insurance coverage for the claim in question might have come down to whether their Product Liability insurer (if they had one) considered the assembly manual to be a part of the product or simply professional advice.
Van Aircraft may be the biggest manufacturer of kit aircraft in the world but they are in fact only a small company and they probably have only very limited financial and personnel capacity to deal with lawsuits such as the one in question.
