protected, to do an additional insurance against threequarters of collision liabilities only for the difference between the policy valuation of his vessel and her value calculated at £8 a ton. For, as we have seen, in determining the shipowner's collision liability no reckoning is taken of the actual value of his vessel, whatever be her age or condition. IV. The fourth and by far the most difficult case is where both vessels are to blame. In actual experience these cases are far from rare, they have given rise to much the greatest amount of dispute as regards the law of collision. With respect to this class of collisions the English practice of determining the incidence and apportionment of damage differs from that of many other nations. The old Admiralty rule was that where both vessels were to blame, the damages sustained by both were to be added together and the sum halved, and each vessel had to pay one-half. If a case is worked out on this rule it will be found that there are two ways of arriving at the same result : (a) Each ship paying one-half of the total damages into a common fund, and then taking out the amount of the damages sustained by herself. (b) The ship which has suffered less damage paying to the one which has suffered more the difference between the halves of their damages. The first plan requires in all three payments, the second only one. The second became the customary practice of settlement in the Admiralty Court. Abroad, the treatment of cases of both to blame is as follows: 1. 1 Condensed from Marsden's Collisions at Sea, 3rd ed. pp. 158-160. Portugal Egypt court decides in each case whether damages payable by the one to the other and their amount. loss made good by both vessels in proportion to their values. It is evident from this statement that an agreement between the parties concerned in a collision to enter action in the courts of any particular country may enormously affect the amount of damages recoverable and payable. Where the vessels in collision belong to one nationality and the cargoes on board belong to persons of the same nationality, it is quite usual for them to agree to settle in accordance with their national law. Single Liability and Cross Liability.—The practice of settling the damages springing out of a collision in which both vessels are to blame by making one payment, has resulted in the doctrine that the liability in such a case is not a cross liability of each ship to the other, but is a single liability of the less damaged to the more damaged ship. This distinction becomes extremely important when the damage done to both ships and cargoes exceeds £8 per ton of the offending vessels and suit for limitation of liability has been granted. Suppose two large steamers A. and B., each with a valuable cargo, get into collision, each contributing by negligence to the accident. Then the damages to property may easily exceed the statutory limit of £8 a ton, and the question arises whether in the case of each vessel the limit is to be applied to her half of the total damage, or the limit is to be applied, in the case of the less damaged vessel, to the difference between the halves of the respective damages of the two vessels. This point came up in the cases of Chapman v. Royal Netherlands Steam Navigation Company, 1879,1 and of Stoomvaart Maatschappy Nederland v. Peninsular and Oriental Steam Navigation Company (The Voorwaarts and The Khedive).2 The latter case went to the House of Lords in July 1882. 1 L.R. 4 P.D. 157. 2 L. R. 7 App. Cas. 800. It was decided that settlement between the shipowners was to be effected on the principle of single liability. Consequently, when the statutory limitation of liability is granted it is applied to the tonnage of the vessel which has a balance to pay; and this amount (i.e. the maximum statutory liability of the less injured vessel) is divided among the other claimants of damages in proportion to the damage they have suffered. This principle was applied to a policy of insurance in the case of the Balnacraigs (London Steamship Owners' Mutual Insurance Association v. Grampian Steamship Company, 1889 and 1890).1 In Appendices II. and III. of his admirable Contract of Marine Insurance, Mr. M'Arthur has made a special study of collision liabilities and of the effects of the different forms of the running-down clause. The only recent important variation of this clause is the provision contained in the Institute Clause, that when both vessels are to blame for a collision, and neither of them limits her liability, claims under the clause shall be settled on the principle of cross liabilities. It will be found on working out cases of this kind that the assured comes out of a cross liability settlement with results more favourable than a single liability settlement gives. The clause of the Institute of London Underwriters runs 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 principles of cross liabilities, as if the owners of each 1 L. R. 24 Q.B.D. 32 & 663. 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. 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 of the cargo or engagements of the insured vessel, or for loss of life or personal injury. Ships of Same Owners in Collision.-All these arrangements and adjustments of liability apply only when the insured shipowner has become liable to pay and has paid to the other shipowner sums in respect of his responsibilities. The case is somewhat altered when the two ships belong to the same owner. There can be no liability on his part as the owner of the one to pay anything to himself as the owner of the other, he cannot sue himself (see pp. 169, 170). But he is liable to the cargo-owners of both vessels for damage suffered by them. As regards the hulls, although the owner may have insured them with entirely different underwriters, he cannot under the ordinary collision clause recover anything from either set of them in respect of collision liabilities. He consequently has himself to bear his collision damages, unless they exceed 3 per cent, and are claimable as the direct results of a sea peril. To avert difficulties of this kind the following clause is occasionally used: And it is further agreed that the principle involved in this clause shall apply to cases in which the vessels are the property in part or in whole of the same owners. But the cases in which it has come into operation are most infrequent. Vessels in Tow.—An extension has lately been given to the operation of the running-down clause by the decision in the case of the Niobe (M'Cowan v. Baine, 1891).1 The Niobe was being towed by the Flying Serpent steam-tug, which ran into the Valetta. In consequence of bad look-out on board the Niobe her helm was not ported till too late to avert the collision. Had she ported in time she would have so controlled the movements of the Flying Serpent that her course would have been forcibly altered, or she would at least have warned the Flying Serpent of her danger. The Niobe was held to blame for the collision, and the underwriters of the hull of the Niobe were held liable under the running-down clause attached to their policy for their proper proportion of the damages and expenses attaching to the Valetta, from the collision. Generally the doctrine of tug and tow is that the tug is the servant of the tow, being there simply to supply the necessary motive power. But it would seem to be hardly equitable to make a towed vessel responsible for damage done in consequence of the fault of her tug unless she has some way contributed to it or failed to take the proper steps to prevent it. Items included in Collision Claims. It is to be remarked that as the running-down clause is not part of the ordinary policy of marine insurance, but is a separate contract, it is not interpreted with the same strict reference to the doctrine of proximate cause as the policy is. In the running-down clause one is no longer dealing with a contract of indemnity for material damage immediately resulting from certain named perils, but with a guarantee of repayment of a stated proportion of liabilities involuntarily incurred by the assured. Nothing in the wording of the running-down clause excludes claims for loss of time, or loss through failure to meet engagements sustained by the unoffending vessel, and, in fact, it not unfrequently happens that these secondary results of the accident are as great in their amount as the cost of repairing the material damage inflicted in the collision. Four-fourths, R.D.C.-The running-down clause discussed above deals with only three-quarters of the shipowner's liabilities; in a few cases underwriters have consented to extend the provisions of the clause to cover the whole of the assured's liabilities arising out of damage done to property by collision of the insured ship with another ship |