Lloyd's as amended by the Association of Average Adjusters, 1890, 1891, viz. :—

The deduction for new work in place of old is fixed by custom at one-third, with the following exceptions :-

Anchors are allowed in full. Chain cables are subject to onesixth only.

The rule applies to iron as well as to wooden ships, and to labour as well as material. It does not apply to the expense of straightening bent ironwork, and to the labour of taking out and replacing it.

It does not apply to graving-dock expenses and removals, cartages, use of shears, stages, and graving-dock materials. It does not apply to a ship's first voyage.

Old Materials. Where damage is repaired by replacing old materials by new the value of the old is credited to the underwriter. This credit is in England entered after the deduction of the third from the cost of the new; in America before the deduction; the difference to the underwriter is one-third of the value of the old materials.

Incidental Expenses.-As the repairing of a vessel at a port other than her home port involves the shipowner in certain expenses for the superintendence of repairs, these are allowed by underwriters when the cost of repairs is such as to constitute a claim on the policy. If a vessel is repaired at her home port no charge is admitted for the services of a superintendent in the permanent employment of the shipowner. Wherever the repairs are executed no amount is allowed to the shipowner as commission, but bank commission on the amount of the disbursement is paid; nothing is allowed to him for payments made or services rendered at the port where he resides.

The costs of surveys and adjustment are apportioned over the interests concerned.

Adjustment. It is evident from the preceding that the task of separating the items of account that should be charged to the merchant and shipowner from those that should fall in whole or in part on the underwriter is one that demands great care and skill. The result of the difficulty of drawing up such an account is that it has become necessary to found a profession of specialists who devote

themselves entirely to the adjustment of marine losses. They dissect the accounts item by item, apportioning the amounts (in the case of a partciular average on ship) between ship, ship less one-third, and owner. In the end all that is chargeable to the two former heads is apportioned over the insured value of the ship, each underwriter paying the same proportion of the amount that his subscription bears to the insured value of the ship. No account is taken of the actual value of the ship as distinguished from the insured value, ship being treated differently from goods in that respect:

Summary of Documents.—For the substantiation of a claim for particular average the following documents are required

(1) Protest of master or log-book.

(2) Set of bills of lading (cargo claims).

(3) Policy or certificate of insurance (endorsed if necessary).

(4) Certified statements in detail of actual cash value at destination of goods in damaged state, all charges paid.

Certified statements in detail of sound value at destination of goods on same day, all charges paid. Or original vouchers of costs of repair of ship, all discounts, rebates, allowances, and returns deducted. (5) In United States, subrogation to underwriters of damaged goods.

CHAPTER XIII

PARTICULAR CHARGES: SUING AND LABOURING

EXPENSES

Particular Charges.-Expenses incurred in reconditioning cargo at destination have already been discussed as a form of particular average. Such expenses are sometimes incurred at an intermediate point of the voyage. In the absence of any special contract regarding costs of reconditioning, it seems to be equitable that they should be borne by the person who would have been liable for the damage which was prevented or diminished by the reconditioning.

Other expenses may be incurred at an intermediate port for the preservation or recovery of the property insured, besides reconditioning expenses; such are warehouse rent, cost of reshipping, cost of forwarding.

or

In the case of Kidston v. Empire Marine, 1866 and 18671 (see below, p. 223), the jury found that expenses of this character are known as "particular charges," and that they are in their nature entirely distinct from particular average, the latter denoting merely actual damage (diminution and/o deterioration), but not expenses incurred in recovering or saving the property.2 As these expenses are not particular average they are not excluded by the memorandum or any other equivalent clause from the liabilities of the underwriter, and for the same reason their incidence is not

1 L. R. I C.P. 535; L. R. 2 C. P. 357.

2 This distinction in English law corresponds to the distinction drawn in France between "avarie particulière matérielle" and "avarie particulière en frais."

limited by any consideration of franchise. are also known as "special charges."

These expenses

It has already been noticed (p. 187) that the latest form of the F.P.A. clause contains the words :

Underwriters, notwithstanding this warranty, to pay for any damage or loss caused by collision with any other ship or craft, and any special charges for warehouse rent, reshipping, or forwarding, for which they would otherwise be liable.

The effect of stating nominatim warehouse rent, reshipping, and forwarding as special charges for which liability is assumed is to exclude from the operation of the clause all other special or particular charges, such as reconditioning. Other forms of the clause occur which give a much wider extent to the underwriter's liability, for instance, one which runs

To pay warehousing, forwarding, and other special charges if incurred.

Under this a policy warranted F.P.A. would be subject to claim for even such special charges as are incurred to avert damage of the nature of particular average. This form of the clause, therefore, seems to go beyond what was originally the intention of assured and underwriter in the arrangement of the insurance on F.P.A. terms.1

If particular charges are the direct outcome of a peril insured against they are recoverable from the underwriter.

Sue and Labour Clause.-Particular charges are also recoverable on the policy in case they are incurred under the circumstances detailed in the sue and labour clause (see p. 120), viz.—

1 In Meyer v. Ralli, 1876, 1 C. P. D. 358, in an action on a policy covering a cargo of rye, F. P.A., it was held that underwriters were liable for the amount of expenses necessarily incurred to avert a total loss on that part of the cargo which, after reconditioning, was capable of being forwarded to destination.

In Great India Peninsula Railway Company v. Saunders, 1861, 30 L.J. Q.B. 218, forwarding charges on railway iron, insured F.P.A., were held not to be recoverable from underwriters as they were not incurred to avert a total loss on the iron.

And in case of any loss or misfortune it shall be lawful to the assured, their factors, servants, and assigns, to sue, labour, and travel for, in, and about the defence, safeguard, and recovery of the said goods and merchandises and ship, etc., or any part thereof, without prejudice to this insurance; to the charges whereof the said company will contribute in proportion to the sum herein assured.

Probably the best way to arrive at a knowledge of the import of the clause is to examine the three leading cases connected with it.

(1) In Kidston v. Empire Marine Insurance Company, 1866 and 1867,1 the action was brought on a policy insuring chartered freight free of particular average, but with the sue and labour clause. The vessel was condemned at an intermediate port, but a ship was found to take the cargo on to destination at an expense less than the original freight. The assured claimed from the underwriters their proportion of the costs incurred in so forwarding the cargo, on the ground that by this forwarding they averted the danger of a total loss on the policy; they based their claim on the words of the sue and labour clause, and were held to be in the right. The expenses in question were incurred on behalf of one particular interest, freight, to avert what would otherwise have been a loss on the policy insuring that interest, and the steps taken, resulting in the incurring of these expenses, were taken by the assured, their factors, servants, or assigns.

It may be remarked that in the wording of this clause in the policy there is an almost unavoidable ambiguity. The words run—

For, in, and about the defence, safeguard, and recovery of the said goods and merchandises and ship, or any part thereof.

This would almost make it appear (and were it not for the words "or any part thereof" it certainly would appear) that the clause was intended to cover only cases in which efforts were made to recover both ship and cargo. But this is not correct, it is not in consonance with the decisions. It must be remembered that the policy was originally

1 L. R. 1 C.P. 535; L.R. 2 C.P. 357.