Managing Risk In An Era Of Developing Knowledge

The recent case of BHP Coal Pty Ltd v O&K Orenstein and Koppel AG provides a timely reminder of the challenges facing professionals in an advancing world of knowledge.

Facts

In 1984, a bucket wheel excavator operating at a coal mine in Goonyella was damaged in a grounding incident. A German engineer flew to Australia to advise on the necessary repairs. Essentially, the repairs involved welding extra stiffeners to the machine - and were designed in accordance with the German standard for design of 'large machines in open cut mines' (BG60), which included bucket wheel excavators.

In March 2000, the bucket wheel excavator collapsed due to fatigue fracture in its central tower. The owners of the machine brought proceedings in the Supreme Court claiming damages in excess of $50 million.