Justin Crick is a principal with Baker Tilly’s forensic, litigation and valuation services practice. He is a skilled and experienced forensic accountant. Working with many of the leading insurance companies and law firms around the world, Justin has quantified losses for business interruption claims in more than 70 countries and has been involved in more than 1,000 large and complex international assignments involving multimillion-dollar losses.
He specializes in the quantification of major and complex losses in energy and power generation, mining/mineral processing, oil, gas and petrochemicals, industrial manufacturing and production, telecommunications and construction. He is frequently called on to assist in the quantification of upstream and downstream oil, gas and petrochemical losses. He also regularly acts on mining/mineral processing and power generation (conventional and renewable) losses. He has acted on a number of the largest energy losses the energy insurance market has faced over the last few years, several of which have been more than $1 billion.
Mining
- Acted on numerous mining and mineral processing losses throughout the world including cases in South Africa, Canada, the U.S., Chile, Botswana, Australia, Sierra Leone, Sweden, Russia and the U.K. The losses include but are not limited to: Diamonds, gold, copper, titanium dioxide, iron ore, bauxite, PGMs, coal, rutile, magnetite and uranium.
Upstream energy - Reviewed and quantified the loss of production income following the failure of a turret on a floating production storage and offloading (FPSO) vessel. The review required detailed review and analysis of historic production, reservoir plans and operational reports. The claimed loss was over $500 million.
- Reviewed and quantified the loss of production income following the failure of a compressor which led to a production shortfall at an offshore facility in the North Sea. The review was complicated by the platform in question being a ‘swing producer’ which lacked a scheduled reservoir plan. The claim totaled over of $300 million and a swift and amicable settlement was reached.
Downstream energy (refining/petrochemicals) - A refinery suffered a significant fire and consequently suffered a very substantial loss of profits (nearly $250 million). The claim was prepared via the use of a Linear Program. Reviewed the claim presented and calculated the believed loss of profits, historic and incident-affected production levels at the damaged refinery and other owned refineries in northern Europe to ensure that a loss had been sustained. We also had to consider the impact that reduced production levels had on the European Emissions Trading Scheme (carbon credits). A settlement was reached, and all parties were happy with the outcome.
- A large vapor cloud explosion led to very significant damage at a refinery in Russia. This resulted in a considerable and prolonged business interruption loss. Justin led the firm’s which quantified the loss alongside several authorities from different companies. Despite the size and complexity of the case it was amicably concluded prior to the expiration of the maximum indemnity period.
- An African oil refinery suffered an explosion in its visbreaker unit. This resulted in a higher yield of lower quality products and an erosion of margin. In order to mitigate the loss the refinery changed its crude slate for a more expensive crude resulting in an improved product yield. In addition to reviewing the impact that the event had on margins, we also reviewed whether purchases of refined products were because of the incident (i.e., tied into the loss of production) or if they would have been purchased in any event.
Conventional power generation - Three incidents led to a portfolio merchant generator losing three coal units. Claim was based on the impact to the portfolio as a whole and an optimization model which did not separate the impact per unit. We prepared an alternative model to calculate the loss by unit which lead to a swift, amicable conclusion.
- An incident at a combine cycle plant in Spain resulted in the loss of the unit. The owner and operator of the unit was also the gas supplier. The review required detailed analysis of both the power and gas markets in Spain and the various gas supply agreements that were in place. During the review it became clear that it was inappropriate to apply the average gas price in the rate of gross profit for the lost unit as claimed, as purchases from the most expensive gas supply agreement had in fact reduced. After considerable debate, a settlement was reached around our measurement of the loss.
- A transformer failure at a four-unit, gas-fired, combined-cycle plant in Mexico resulted in total outage and significant business interruption losses. The revenue flows were dictated by a Power Purchase Agreement and a detailed review was required to quantify the loss focusing on the plant availability and the impact of force majeure. A swift and amicable settlement was reached.
- The construction of a power plant in North Africa was delayed and losses of over $100 million were claimed. The plant’s operations were governed by a PPA therefore, the review required a detailed understanding of the agreement along with a detailed review of the Liquidated Damages provision under the EPC contract was also required to quantify the loss. We prepared a detailed model of the potential revenue flows and the impact of various scenarios which led to an amicable settlement.
Legal energy disputes - Advised the defendant solicitors on a constructive, total-loss claim involving a Mobile offshore production unit (MOPU) in the North Sea. The accounting issues surrounded the valuation of the MOPU in the financial statements, the various impairments that had been recognized and the future viability of the project. The claim was originally over $1 billion and settled shortly before trial.
- Acted as an expert accountant in relation to the valuation of an umbilical which formed an unrepaired damage claim and was also retained to value the resultant consequent loss. The matter settled during mediation.
- The failure of a control panel in a refinery lead to a production and profit loss which was originally claimed to be over $10 million. Appointed as the accounting expert witness in the resultant litigation by the defendants. Issues identified in the review included a normal variable to plan, duplication in items claimed and a lack of supporting evidence. The matter settled during mediation.
- Advised insurers on a significant loss of profits (in excess of $50 million) from a fire at a refinery in the Middle East which occurred during a planned turnaround. Acted as the accounting expert witness at the subsequent arbitration when the first-party claim was subrogated leading to a favorable award for the instructing party.
- Appointed in arbitration to review the accounting expert witness evidence presented to date and to form an independent view on the quantum. The case involved the quantification of losses at a gas supplier arising from several incidents involving customers of the gas supplier.
- Appointed in a reinsurance dispute to review the losses of profits at a mine. Instructed to review the insurance settlement from a reinsurance perspective, Justin presented written and oral evidence at trial in Canada. The claim and eventual settlement of the insured loss was over $100 million.
Renewable power generation - Acted on numerous renewable-energy losses including wind farms (onshore and offshore), solar (photovoltaic and CSP) and hydroelectric (run of river and dam storage).
Contingent business interruption (CBI) - Acted on numerous CBI cases throughout the world. These have resulted from both natural disasters and one-off events such as fires and explosions. Losses required a detailed review and analysis of supply and sales agreements in place, historic and actual performance and whether the impacted party has been able to mitigate its losses by purchasing products from elsewhere or via changing, “normal” operating regime.
- The Institute of Chartered Accountants in England and Wales, fellow
- The Chartered Institute of Arbitrators, associate
- Justin has presented at numerous internal and external seminars covering various aspects related to the quantification of energy losses. He has also presented at a number of conferences including, The Lillehammer Energy Conference, the On-shore Energy Conference, the Clyde & Co Energy Conference and the Oil, Petrochemical, Energy and Risk Association
