Class-Action Suit Against Yacht Brokerage Firms May Also Subject the Industry to Closer Scrutiny

DISCOVERY IN A SUIT SOMETIMES ILLUMINATES STRUCTURES AND PRACTICES DEFENDANTS WOULD PREFER REMAIN OUT OF THE LIMELIGHT

CLASS-ACTION SUIT AGAINST BROKERAGE INDUSTRY - EDITION III

Preface: This is the third edition in a series that Peter Swanson (Loose Cannon) and Phil Friedman (For Yacht Builders, Buyers, and Owners) have teamed up to write. It’s also the first of a number of background pieces we’re planning to incorporate about the structure, practices, and foibles of the yacht brokerage business. These latter articles are to supplement our coverage of the class-action suit (now suits in the plural) that’s been filed against some fifteen defendants in the U.S. yacht brokerage sector. We’re adding this background material because we believe it is information that is ultimately important to the boating/yachting community, whether or not it is wholly germane to the legal case at hand.

In bringing such background information to the discussion, we’re committed to clearly identifying it and related discussion as distinct from the emerging details of the legal case proper. Notwithstanding that, if anyone in the boating/yachting community or the marine industry disagrees with either what we report or any opinions we may express, they are invited to comment in these pages and disabuse one or both of us of any alleged misapprehensions. For one of the main goals of this series is to put as many of the facts of the case and the surrounding situation in front of our readers, for the purpose of encouraging an informed understanding and discussion of the real-world nature of the yacht brokerage business. — PLF

Only two states in the USA regulate the yacht and ship brokerage business —California and Florida. In all the other states, yacht brokerage is unregulated by government or even quasi-government bodies. In some areas of the nation, there are voluntary associations which nominally seek to improve the level of competence and operating standards of their members. The most notable of these is the Certified Professional Yacht Brokers Program, which was initially conceived by the Yacht Brokers Association of America (YBAA), but is now run by a consortium of seven associations representing yacht brokers in North America and abroad.

It’s important to keep in mind that voluntary means voluntary, and that compliance with the propagated standards of a voluntary association can be haphazard, at best — unless combined with an exceptionally robust system of