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conferences were held between its promoters and the representatives of the principal shipowners' and underwriters' associations, when extensive alterations were conceded; but the project, in the form in which it was introduced, had aroused so much hostility, that all efforts to effect a compromise proved abortive and the Bill was eventually withdrawn. A Royal Commission was subsequently appointed to inquire into the loss of life at sea and other subjects with which it had been proposed to deal by means of the abandoned measure.
Such is a brief history of the Merchant Shipping Bill of 1884, the moral of which would appear to be that no satisfactory amendment of the law of marine insurance is to be effected by legislation of an extreme type, having for its principal aim, not the perfecting of the system directly concerned, but the attainment of some ulterior object.
At the same time, it is generally allowed that there are defects in the present system which stand in need of rectification; for, although in theory, marine insurance is a contract of indemnity, in practice it is something different. The shipowner, who is fully insured by open policies on ship and freight to the extent which the law allows, recovers, in the event of total loss, as will be hereinafter shewn (see Ch. IV., sect. 4), an aggregate amount considerably in excess of an indemnity; and the overinsurance thus sanctioned may be practised to a greater extent by means of valued policies. On the other hand, the owner of cargo who effects insurance under an open policy, is not fully compensated upon the broader principle of indemnity in case of loss. It should not be impossible, though it might be difficult, to formulate, with respect to open policies, a scheme for the valuation of the several subjects of insurance which would satisfy every legitimate requirement for the protection of trade without entailing an over-insurance.
In like manner, with respect to valued policies, there should be no insuperable difficulty in devising a plan which would
obviate the abuses to which such contracts are liable, without involving the practical abolition of the binding effect of a valuation, as was originally proposed by the last Merchant Shipping Bill. The practice of inserting in policies, by mutual agreement, the value to be placed upon the interest insured, is one of long standing and great practical convenience. The amount of the valuation affects, not only the sum which the underwriter is liable to pay in case of loss, but also the sum which he is entitled to receive for premium ; so that, if the valuation were to be no longer deemed conclusive, either the insurance could not be effected until the actual value of the interest had been ascertained, or else, in the generality of cases, the amount insured would be subject to alteration after the execution of the policy, or even after the determination of the risk, which would be a fruitful ground of dispute. The disadvantage attaching to such a course would be so great, that it may safely be asserted that neither assurers nor assured would submit to it, and that any endeavour to abolish valued policies by legislation would result in a tacit agreement between all · parties concerned that the amount of the policy should not be objected to, except in case of fraud or grossly excessive overvaluation. But, although any violent change in the law is to be deprecated, there appears no reason why some additional restraint should not be placed upon over-valuation. The clauses of the Merchant Shipping Bill, as amended, contained some valuable suggestions as to the mode in which such safeguards might be obtained. It would be a considerable and possibly a sufficient remedy for the abuse of the principle of valuation, if powers were given to the Court before which any action upon a valued policy was tried, upon proof that the valuation was in excess of a reasonable estimate of the actual value of the interest insured, to reduce such valuation to the sum which would have been declared if the policy had been an open one.
At the same time, it is obvious that no rule for the prevention
of over-insurance can prove effectual, so long as facilities exist for effecting insurance on terms contrary to law by means of “honour policies;" for although the amount legally recoverable under a contract of insurance might be strictly limited to an indemnity, it would be open to any one who might desire to do so to defeat the law by resorting to those facilities. It was provided by the Merchant Shipping Bill that the effecting of any insurance declared illegal by the statute of the 19 Geo. II., or otherwise effected for the purpose of evading or contravening the legislation then proposed, should be prohibited under penalty ; and some such enactment would appear to be needful if the law, even as it stands at present, is to be made effective.
In any proposal to amend the law of marine insurance, atten. tion should be paid to the fact that there are anomalies which operate to the prejudice of the assured as well as those which operate to his advantage. There are many particulars which might be mentioned, in respect of which the law and practice, both of marine insurance and general average, as at present constituted, fail to afford a full indemnity to the owners of ship or cargo in the event of partial or total loss. To take one case by way of example, there is the extra expenditure which the shipowner incurs in the wages and cost of maintenance of the master and crew during the detention of the vessel in a port of refuge which she has entered for the common safety. That expenditure which, according to English practice, devolves upon the shipowner, is according to the law of almost every other country, the subject of general average, and is so treated by the York-Antwerp Rules.
The mention of the York-Antwerp Rules leads me to the last topic upon which I propose to touch in reviewing the questions of interest at the present day which are related to the contract of marine insurance. It is well known that those rules are the outcome of a movement which has been in existence for some time past with the object of establishing an international system of general average. General average, though a branch of the common law of the sea, has been so considerably diversified by the laws and customs of the different maritime states where it is administered, that the unity of the system has been obscured. The project to reconcile these divergencies and establish a uniform method of stating general average in all maritime countries, though it might have seemed at the outset almost utopian, has been steadily promoted, and has at length had some practical result. An outline of the history of the movement has been given by Mr. Lowndes, to whose able and prolonged advocacy the progress which it has attained is largely due, in the appendix to his valuable work on The Law of General Average. In the same volume will be found a comparative table of the laws of the different maritime countries, from the study of which it may be seen how much still remains to be done before complete uniformity can be attained. However, a foundation, upon a fair and moderate basis, has been laid in the rules adopted by the Association for the Reform and Codification of the Law of Nations, particulars of which will be found in Appendix V. The favourable reception accorded to those rules by mercantile men, both in this and other countries, is an indication of the general desire which exists for the removal of those impediments which prevent persons of different nationalities engaged in maritime commerce from contracting on equal terms.
In concluding these preliminary remarks, I have only to repeat that my object in making them has been to direct attention to a few topics, which, though they do not form part of the subject to be treated, are intimately related to it, and, without some notice of which, it appeared to me that no survey of the present position of marine insurance would be complete.
C. M. EXCHANGE BUILDINGS,
LIVERPOOL, November, 1885.