Maritime Insurance Law

Transcription

1 LW6175E Maritime Insurance Law Part I Course Duration: One semester Credit Units: 3 Level: P6 Medium of Instruction: English Prerequisites: (Course Code and Title) Nil Precursors: (Course Code and Title) Nil Equivalent Courses: (Course Code and Title) Nil Exclusive Courses: (Course Code and Title) Nil Part II Course Aims This course aims to provide an analysis of the foundations and fundamental concepts relating to the insurance of ships, cargoes, and freight. The law considered is predominantly the English law as codified in the Marine Insurance Act 1906 where the Marine Insurance Ordinance (Cap. 329) is primarily based upon. Throughout the course, the respective positions of assureds, brokers, underwriters are analysed, as also are the special feature of a marine insurance contract, the risks covered, the excluded cover, the causation, and the types of loss. Course Intended Learning Outcomes (CILOs) (state what the student is expected to be able to do at the end of the course according to a given standard of performance) Upon successful completion of this course, students should be able to: No. CILOs 1. Analyse relevant legal materials, including statutes, case law and standard form marine insurance contracts 2. Identify and explain the main commercial and political policies and values underpinning the law relating to marine insurance. 3. Apply insurance law principles and authorities to solve complex factual problems Weighting (if applicable) Alignment of CILOs with PILOs Stream PILO No. Contributed to MTL 1, 2, 3 MTL 1, 2, 3 MTL 1, 2, 3 1

2 4. Draft legal advice based on complex factual problems 5. Appraise and critically evaluate existing debates on maritime law in UK and Hong Kong 6. Display clarity and objectivity in written and oral interactions and communications. MTL 1, 3, 4 MTL 1, 2, 4 MTL 1, 2, 3, 4 Teaching and Learning Activities (TLAs) (Indicative of likely activities and tasks designed to facilitate students achievement of the CILOs. Final details will be provided to students in their first week of attendance in this course) CILO No. TLAs Hours/week (if applicable) CILO 1 Discussion of marine insurance contracts and when they terminate 3 including such issues as warranties, insurable interests, brokers duties, duties to act in good faith, held covered clauses and the characteristics of the different types of insurance CILO 2 Discussion of key legal and policy issues in their particular context. CILO 3 Case study of complex factual scenarios with reference to the relevant legal principles and authorities. CILO 4 Demonstration of specific skills to provide legal advice to clients based upon analysis of factual scenarios. CILO 5 Discussion of existing areas of debate about what the law is and ought to be in England and Hong Kong CILO 6 Individual project / assignment to demonstrate concisely written and accurate legal advice on projected changes in the law. Discussion of relevant bodies of law, jurisprudence and legal principles. Assessment Tasks/Activities (Indicative of likely activities and tasks designed to assess how well the students achieve the CILOs. Final details will be provided to students in their first week of attendance in this course) AT No. Type of Assessment Tasks/Activities Weighting (if applicable) CILO Assessed Remarks (exam duration, etc) AT 1 Coursework 50% 1-6 AT 2 Examination 50% 1, 2, 3, 6 3 hours Students are required to attend at least 70% of the classes (lectures, seminars, presentations). If a student does not meet this requirement, he/she may be disqualified for assessment. Students must obtain a minimum mark of 40% in both coursework and examination and an overall mark of 40% in order to pass the course. Grading of Student Achievement: Standard (A+, A, A-...F). Grading is based on student performance in assessment tasks/activities. 2

3 Part III Keyword Syllabus Insurable interest, Non-Disclosure, Misrepresentation, Utmost Good Faith, Held-Covered Clauses, Fraudulent Claims, Late Notification of Claims, Late Payment of Claims, Warranties, Proximate Causation, Actual Total Loss, Constructive Total Loss, Abandonment Detailed Syllabus This course considers the main legal principles involved in (marine) insurance law and the rich case law associated with this area. Whilst the Marine Insurance Act 1906 (and in this sense the Marine Insurance Ordinance (Cap.329) is said to codify the law relating to marine insurance, it is however accepted that this piece of legislation partly codifies common law relating to insurance, not only in a marine context. Hence, knowledge of marine insurance law will be transferrable to other types of insurance as well. In the first lecture, we will give broad overview of what marine insurance is. This has become an issue in Australia in Gibbs v Mercantile Mutual Insurance (Australia) Ltd (2003) HCA 39, (2003) 199 ALR 497 although same question may not come under consideration in the United Kingdom or in Hong Kong where there is no such different regimes governing marine insurance law and other types of insurance. We will also briefly look at history of marine insurance law and why the London Market has obtained such a predominant position in marine insurance industry. It will look at the process of marine insurance placing in London. In the second lecture, we will look into the concept of insurable interest and assess whether the concept is actually required in light of the fact that a marine insurance contract is a contract of indemnity where the assured must prove losses. We will look into the broad approach to insurable interest as adopted in The Moonacre [1992] 2 Lloyd s Rep. 501 and The Martin P [2004] 1 Lloyd s Rep. 389 and also the problem of insurable interest from the transfer of risk in cargo insurance. The issue came in focus in NSW Leather Co Pty Ltd v Vanguard Insurance Co Ltd (1991) 11 NSWLR 699 in Australia and Hong Kong Nylon Enterprises Ltd & Others v QBE Insurance (Hong Kong) Ltd [2003] HKEC 199, HCCL 46/199 in Hong Kong although in the latter case one may ask whether Stone J. correctly considered the point of law. In the third lecture, the concept of the pre-contractual duty of disclosure will be analysed. It is an issue which has generated many case laws and extensive discussions 3

4 among judges and academic commentators. It is one of the areas where potential reform is considered in the joint project of the Law Commission and the Scottish Law Reform Commission. We will examine how material fact to be disclosed is determine in light of the decisions from C.T.I v Oceanus [1982] 2 Lloyd s Rep. 178 (QB) to C.T.I v Oceanus [1984] 1 Lloyd s Rep. 476 (CA) to Pan Atlantic v Pine Top [1994] 2 Lloyd s Rep. 427 (HL). We will also analyse the requirement of inducement as implied into the law by the House of Lords in the Pan Atlantic case and some case laws which address this issue afterwards including St Paul Fire & Marine v McConnell [1995] 2 Lloyd s Rep. 116 (CA), Drake Insurance v Provident Insurance [2003] EWCA Civ 1834, [2004] 1 Lloyd s Rep. 268 (CA), Laker Vent v Templeton Insurance [2009] EWCA Civ 62, [2009] 2 All ER (Comm) 755. Yet, one should be reminded that the duty of utmost good faith is mutual. In this respect, La Banque Financiere v Westgate [1988] 2 Lloyd s Rep. 513 (CA) will be discussed. Continuing from the third lecture, the fourth lecture will consider the issues of the post-contractual utmost good faith which came to be recognised in The Litsion Pride [1985] 1 Lloyd s Rep. 437 which since then has stirred legal arguments and academic discourses up to the House of Lords in The Star Sea [2001] UKHL 1, [2001] 1 Lloyd s Rep. 389, the judgment of which was further clarified somewhat in The Mercandian Continent [2001] EWCA Civ 1275, [2001] 2 Lloyd s Rep. 563 and The Aegeon [2002] EWCA Civ. 247, [2002] 2 Lloyd s Rep. 42. One of the issues which the post-contractual utmost good faith has created is uncertainty whether the law relating to fraudulent claims assumes its distinct legal status or whether it is indeed a part of the post-contractual utmost good faith. The fifth lecture will deal with the issues of fraudulent claims and also the potential liability of the insurers in late consideration and payment of claims. Lecture six will turn to deal with warranty in marine insurance. In the context of marine insurance law, a warranty gains a special legal status different from the term as understood in general contract law. It requires strict compliance. The effect of a breach of warranty is considered in The Good Luck [1991] 2 Lloyd s Rep 191 (House of Lords), a case which needs to be discussed. In Lecture seven, we will consider the perils of the sea, including the issue of piracy which has been a sharp focus in recent years due to the aggravating problems around Somalia and the Gulf of Aden. We will look into the war risk insurance and kidnap & ransom insurance which has been developed to deal with this issue. The recent case of 4

5 Masefield AG v Amlin Corporate Member Limited [2010] EWHC 280 (Comm) will be analysed. In Lecture eight, we will consider the issue of causation for as to be able to claim for the loss, it must be proved that the loss was caused by the peril insured against. Cases including The Miss Jay Jay [1987] 1 Lloyd s Rep. 32 and Midland Mainline v Eagle Star Insurance Co Ltd [2004] EWCA Civ 1042, and The Popi M [1985] 2 Lloyd s Rep. 1 will be dicussed. Lecture nine will consider the excluded risks, i.e. losses which cannot be covered. These can be due to wilful misconduct, inherent vice, ordinary wear and tear, or delay. Taking this opportunity, we will also consider the issue of alteration of risks, for example when there is aggravating of risk during the policy or when there is a deviation. In Lecture ten, we will consider the issues of marine losses and treatment of different types of marine losses, i.e. actual loss, constructive total loss, partial loss, particular average, and general average. A brief overview of the York-Antwerp Rules in the context of general average will be touched upon in this lecture. In Lecture eleven, we will outline the Protection and Indemnity (P & I) cover and how the P & I Clubs are operated. In the context of marine insurance, taking P & I coverage for vessels is common. The scope of this type of coverage is wide as it includes third party liabilities, liabilities from collision, and also liabilities for marine pollution. In Lecture twelve, we will conclude by looking at the trend on statutory reform as it is being discussed in the UK. Any amendment to the Marine Insurance Act 1906 will affect Hong Kong in one way or the other not least because the Marine Insurance Ordinance is based on the Marine Insurance Act 1906 and most Hong Kong underwriters do not have enough capacity to write large risks and hence they tend to be the following underwriters with the leading underwriters in the London Market with terms and conditions governed by English law. Recommended Reading A list of recommended reading will be given prior to each lecture. However, in general, students may wish to consult: 5

6 Books: Francis D. Rose, Marine Insurance Law and Practice (LLP, London 2004) Robert Merkin and others (eds), Colinvaux s Law of Insurance in Hong Kong (Sweet & Maxwell, Hong Kong, 2009) Journals: Journal of Maritime Law and Commerce Lloyd s Maritime & Commercial Law Quarterly The Journal of Business Law The Journal of International Maritime Law Online Resources Westlaw International provides access to both case law and Articles. 6