or vessel. The clause thus extended is known as the fourfourths running-down clause. Other Liabilities. It has been already pointed out that in consequence of the restricted responsibility assumed by underwriters for collision and other liabilities, shipowners felt themselves compelled to resort to mutual associations for fuller protection. The position taken up by underwriters has been described as the result of lack of enterprise and initiative, in fact, of failure to appreciate the necessities of the shipowner's position. However this may be, it is worth recording that in 1886 three Liverpool Marine Insurance Companies the British and Foreign, the Union, and the International-introduced what they called a full protection policy, which was in effect a Lloyd's policy on the hull of a vessel without the collision clause, but with clauses added dealing with all the important liabilities of the shipowner.1 The part of this document dealing with liabilities commences as follows: And so far as concerns the aforesaid insurance against liabilities the company promises and agrees as follows: that is to say, that the company will protect and indemnify the insured against any such liabilities incurred by him or them (without his or their actual fault or privity) at any time while the ship is insured by this policy as aforementioned, in respect of his or their ownership of or other interest in the insured ship, or in respect of any contract for the carriage of any goods or passengers in the insured ship, for any losses, claims, demands, damages, or expenses which may arise from or in consequence of certain losses and damages which are detailed in six paragraphs following. The first two of these go to the root of collision liabilities with a directness that is quite refreshing after the tedious roundabouts of the running-down clause, whether three-fourths or four-fourths, limited to £8 a ton or unlimited : (1) Any loss of life or injury to any person whomsoever or any life salvage. (2) Any loss of or damage to any other ship or boat or any goods, merchandise, or other things whatsoever on board any other ship or boat. 1 The full text of this policy is given in Appendix F. The item of life salvage is one of importance, as the reward for the saving of life at sea forms the first lien on the ship and goods saved. In the case of passenger steamers the shipowner might have a large amount to pay for life salvage, without having any means of enforcing from any of the lives saved any contribution to the costs of their salvage.1 As was stated above, the dictum of Lord Coleridge in Richardson v. Burrows 2 restricts the meaning of "collision " in the running-down clause to collision with another ship or vessel. But it is notorious that harbour boards, pierowners, telegraph cable companies, and the General Post Office (as the owner of British inland and cross-channel telegraphs) are entitled to make claims for damage done to their property: consequently, cover is granted in § 3 for (3) Any damage done to any harbour, dock, pier, quay, jetty, stage, buoy, telegraph cable, or other fixed or moveable thing whatsoever, or to any goods or property being thereon. These sections exhaust the liabilities of the shipowner for loss of or damage to things outside the ship. The policy then turns to what is carried in the ship : (4) Any loss or damage of or to any goods, merchandise, or other things whatsoever, whether on board the said ship or not, which may arise from any unauthorised deviation of the said ship, or from any improper navigation of that or any other ship or boat. But this is not to include any loss or damage which may arise proximately or otherwise from improper stowage, or by any emanation from or action of any part of the cargo or any previous cargo, or from any uncleanliness of the ship when loading, or from any want of proper ventilation. This clause practically grants to the shipowner indemnity as regards all claims brought by parties interested in cargo, whether already loaded or not, in consequence of the action of the shipmaster when beyond the owner's control. The clause is very wide-reaching; it is extremely hard to imagine what may not be included under the words "im 1 Life salvage not recoverable under Lloyd's' policy, see The Arno, Ct. Appeal, 14th May 1896. 2 See Lowndes, Law M. I. p. 199. proper navigation of that or any other ship or boat." Probably the meaning would be made clearer by the addition of some such words as "in the course of the voyage insured." In connection with the words "improper navigation," it is right to remark that in the case of the Warkworth (Court of Appeal, June 1884, Esher, M.R., Bowen and Fry, L. JJ.) it was held that when a collision for which a vessel is held to blame is caused solely by a defect in her steam steering-gear, negligently repaired ashore by people employed by the shipowner, that constitutes "improper navigation" within the meaning of the Merchant Shipping Act. In connection with paragraph 5, dealing with removal of wreck, there are three cases of interest : (a) In the case Earl of Eglinton v. Norman (Court of Appeal, April 1877)1 it was held that when harbour officials, in pursuance of the provisions of the Harbour Acts of 1847, remove wreck which blocks the entrance or approach of a harbour, the "owner," who by the Act has to bear the expense of this, is the shipowner to whom the vessel belonged when she was wrecked, and not the underwriter on the ordinary marine policy who has paid a total loss and claimed the salvage. This decision has been in part overruled by the decision of the House of Lords in The Crystal (Arrow Shipping Co. v. Tyne Commissioners June 1894: 10 Times L.R. 551), but in that decision the Lord Chancellor (Herschell) said: "It is unnecessary to determine whether the underwriters are to be treated as the owners within the meaning of the statute." 3 (b) In Castellain v. Thompson (Common Bench, November 1862)2 it was held that when a flatowner raised his sunken flat and her cargo without getting the cargo-owner's consent or approval of the incurring of the expenses necessarily involved, he was bound to deliver the cargo in return for the 1 3 Asp. Mar. L. C. 471. 2 7 L. T. N.S. 424. 3 See Barraclough v. Brown, 1896, 12 Times L. R. 250, agreed freight and without any lien for share of expenses. (c) In a somewhat similar case, Prehn v. Bailey (Court of Appeal, 20th July 1881, Jessel, M.R.),1 it was held that when the Thames Conservancy lifted a vessel and cargo, sunk in collision by the vessel's own fault, and delivered them to the shipowner on payment of the cost of raising, the shipowner (having limited his liability) had no lien on the cargo and no claim on it for a share of the expenses. The hardship of the position of the shipowner in the three cases cited is justification enough for any attempts on the part of underwriters to protect him from such liabilities those described. In paragraph 5 we consequently find as (5) Any attempted or actual raising, removal, or destruction of the wreck of the said ship or the cargo thereof, or any neglect or failure to raise, remove, or destroy the same, but deducting the value of any salvage, wreck, or cargo which may be recovered by the insured, or which may be available for or chargeable with such claims or expenses. Having exhausted the liabilities the policy proceeds to deal in paragraph 6 with— (6) The costs and expenses incurred by the insured in resisting any claims covered by this policy, or in any legal proceedings in relation to any such claims, provided such costs or expenses shall have been incurred with the consent in writing of the company. Thereafter special provision is made for excluding all claims below £10, except claims for costs; and excluding absolutely all claims arising from improper stowage, the latter no doubt on the ground that the stowage is entirely within the control of the shipowner or his agents. Next follows a section obliging the assured to limit his liability where he can legally do so, under penalty of the company being free to refuse him any indemnity beyond 1 6 P.D. 127 that to which he would have been entitled had he so limited his liability. Thereafter comes the important clause :— In no case shall the aggregate amount of the indemnity to be made or contributed to by the company in respect of any one occasion exceed in all (including interests and costs) £30 per ton on the gross tonnage of the insured ship. These are the sole limitations to the scope of the protection afforded by the special policy in question. The document is, as far as the insurance of liabilities goes, simple and to all appearance adequate. It is at least an attempt on the part of professional underwriters to give to the shipowners an insurance of their tonnage both against the perils may be exposed to and the liabilities it may incur, and to give this in one document combining the traditional form of Lloyd's policy and a form designed to meet the reasonable wants of protection with respect to liabilities which are extremely serious and press on shipowners with unmistakable weight. it |