consideration is taken of insured values in fixing the basis of contribution, arrived values only being material. Passengers' luggage and effects not shipped under a bill of lading do not pay anything in general average. The amount to be made good in general average is the loss sustained by the owner based upon market values on arrival, less, of course, the requisite proportion of the sacrifice. This applies to both codes.

The survey of the York-Antwerp Rules in combination with those of the Association of Average Adjusters is now complete, and most of the latter's provisions with regard to general average have been covered. Many of the Rules of Practice which have not been considered deal with comparatively unimportant matters, but others require careful attention. Rules 1 to 6 contain general directions to average adjusters, it being provided that allowance is not to be made of the cost of a new propeller or shaft unless evidence of what has become of the old propeller or shaft is forthcoming, that the adjuster is generally to see that repair costs are kept down as much as possible, and that the certificate of a disinterested engineer as to the extent and cause of damage shall be produced. It is provided by Rule 37 that a statement of amounts payable by insurers shall not be included in an adjustment unless the policies or copies be produced to the adjuster. The direct liability of an insurer for a general average loss is defined by Rule 38, and it is provided that such loss, not being particular average, is not taken into account in computing memorandum percentages. Rule 40 states that a particular average etc. claim paid by underwriters must be deducted from the insured value in order to ascertain the basis of insurers' liability for general average contribution.

Some mention of the method of collection and distribution of general average assessments is also desirable. When a general average act has occurred on a voyage the shipowner is responsible for seeing that an adjustment is made up. Before he will give consignees a clearance for their goods he requires their signature to a "general average bond," and usually claims a general average deposit " of so much per cent. of the value of the goods estimated to cover the

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amount to be made good. On production of receipt for this amount underwriters will at once honour their proportion of the liability. Collection of additional amounts after adjustment may be made if necessary. Underwriters in practice meet their proportion of the sacrifice as a loss on their policies, and collect, in due course, any amounts to be made good. Thus the policy-holder is protected in every possible way.

An important decision has recently been arrived at with reference to general average deposits. There is no legal liability on underwriters to honour their proportion of deposit made by assured on account of general average on production of the receipt. Although this is generally done it has been held that there is no compulsion by customary process, and that an underwriter is entitled to await the making-up of a statement of adjustment before making settlement of general average contribution payable by him.

In order to eliminate the hardship to assured if they were required to be out of pocket to the amount of a general average contribution until the making up of the adjustment, of late years a practice has grown up for shipowners to accept the signature of the various insurers on cargo to a general average guarantee, by which underwriters admit their liability for their proportion of general average contribution and guarantee its payment when it shall have been ascertained.

As has been indicated, several of the Rules of Practice deal with particular average. Rule 54 states that it is customary to adjust particular average on tea, tobacco, coffee, wine and spirits imported into this country on bonded and not on duty-paid prices. This has a similar effect to the net values clause (q.v.). Similar provision is made in general as regards goods sold in bond (Rule 55).

The allowance to be made in respect of water in certain goods if arriving damaged is defined as follows:

In Liverpool the allowance in respect of country damaged cotton is one-sixth.

Rule No. 46, relating to the apportionment of collision claims, should receive special attention, as should the fact that extra charges follow the claim only if the stipulated percentage of the franchise is reached without them. Special charges incurred at the port of destination they are recoverable in full from underwriters, but if at an intermediate port they receive the same treatment in respect to insured and contributory values as general average charges.

Losses Admitted and not Admitted in General Average. If all the essentials of a general average are present the following are admitted:

Jettison of under-deck cargo.

Jettison of on-deck cargo (ex. York-Antwerp
Rules).

Water damage entering holds during jettison and
damage to ship during act of jettisoning in
general average.

Damage to items not ignited during attempts to extinguish fire.

Damage to articles being used for purposes other than for which they were provided.

Loss of freight on items sacrificed.

Expenses directly consequent on a general average

act.

The following are not admitted:

Losses arising out of the neglect of the shipowner
or his servants unless the contract of affreight-
ment includes the negligence clause.
Losses due to the wilful default of the shipper.
Jettison of goods owing to their inherent vice.
Sacrifice of items potentially lost.

Losses not directly occasioned by a general
average act.

Expenses incurred by a shipowner in accordance with his duties under the affreightment

contract.

CHAPTER XI.

COLLISION LIABILITIES.

THE liability at law of a shipowner for damage, etc. arising out of the negligent navigation of his vessel has previously been considered, and it is now proposed to review the protection offered to him by the normal form of Running Down Clause as inserted in the usual hull policy. Its wording is as follows:

"And it is further agreed that if the Ship hereby Insured shall come into collision with any other Ship or Vessel, and the Assured shall in consequence thereof become liable to pay, and shall pay by way of damages to any other person or persons any sum or sums not exceeding in respect of any one such collision the value of the Ship hereby Insured, this Company will pay the Assured such proportion of three-fourths of such sum or sums so paid as its subscription hereto bears to the value of the Ship hereby Insured, and in cases in which the liability of the Ship has been contested, or proceedings have been taken to limit liability, with the consent in writing of this Company, the Company will also pay a like proportion of three-fourths of the costs which the Assured shall thereby incur, or be compelled to pay; but when both Vessels are to blame, then unless the liability of the Owners of one or both of such Vessels becomes limited by law, claims under this clause shall be settled on the principle of cross-liabilities as if the Owners of each Vessel had been compelled to pay to the Owners of the other of such Vessels such one-half or other proportion of the latter's damages as may have

been properly allowed in ascertaining the balance or sum payable by or to the Assured in consequence of such collision."

It is to be observed that this clause places on the insurers only a limited section of a shipowner's liabilities. The policy's contribution is restricted to insurer's proportion of three-fourths of the shipowner's payment in respect of damage done to another ship or vessel together with a like proportion of its demurrage, but in all not exceeding three-fourths of the insured value of the insured vessel can be recovered from hull underwriters. Insurers pay a similar proportion of the costs of proceedings undertaken with their written consent with the object of contesting or limiting the liability of the insured vessel. The clause expressly excludes liability for damage done to immobile objects or in respect of loss of life or personal injury in these words:

"Provided always that this Clause shall in no case extend to any sum which the Assured may become liable to pay, or shall pay for removal of obstructions under statutory powers, for injury to harbours, wharves, piers, stages, and similar structures consequent on such collision, or in respect to the Cargo or engagements of the Insured Vessel, or for loss of life or personal injury."

If one vessel be alone to blame for the collision the method of settling the claim is naturally by one payment. Where both vessels are to blame, whether in equal or differing degrees of fault, the method of settlement in accordance with the Merchant Shipping Act, 1894, also involves one payment only (vide Chapter II). Such a method of adjusting liabilities naturally reduces the amount which passes hands, and similarly underwriters' liability under the Running Down Clause. As this would defeat the whole intentions of the clause, unless the liability of one or both of the vessels becomes limited by law, when such an adjustment would be impracticable, the R.D.C. calls for the application of a cross-liabilities method of settling the dual liability of the defaulting vessels.