the cost of the more complete method of repair. But it has been decided that if the ship is, after the substituted repairs, as valuable for work or sale as she was before the accident, then the indemnity received by the assured is complete, as he cannot recover more than he has lost (Bristol Steam Navigation Company v. Indemnity Marine Insurance, 1887).1 (8) Concurrent Repairs. When repairs for which underwriters are liable are carried out at the same time as repairs on shipowner's account, certain expenses, such as dock hire, are incurred only once which, unless the repairs were carried on concurrently, would be incurred twice. In the case of the Vancouver, (Marine Insurance Company v. China Trans-Pacific Steamship Company, 1886 2) two sets of repairs, shipowners' and underwriters', quite distinct, but both necessary, were going on in graving-dock at the same time. Three days' dock dues were saved by the jointexecution of the repairs, as the shipowners' work alone would have occupied three days, and the underwriters' alone eight days. The Court of Appeal decided that the first three days' hire should be halved, and the next five should fall entirely on the underwriters, and this decision was affirmed in the House of Lords. In the case of the Ruabon, 1898, the Court of Appeal decided (confirming the decision of Mathew, J., in lower court) that when a vessel, having been docked in connection with the repair of damage caused by perils of the sea insured against, is surveyed on the owner's behalf with a view to reclassification, the principle of the Vancouver, decision applies, and the dock dues are to be apportioned between underwriters and owners. Thirds Deducted. After determining whether any liability attaches to underwriters in the ordinary form of policy for the repair of certain damage, it becomes necessary to inquire to what extent that liability goes. Up till the time when iron ships were introduced, the invariable practice in England was that unless the vessel was new a deduction of one-third was made from the cost of the repairs, this 16 Asp. Mar. L. C. 173. 2 II App. Cas. 573. 3 14 Times L.R. 330 deduction being called an "allowance of one-third new for old." See the remarks of Mr. Justice Brett in Lohre v. Aitchison, 1877, 1879.1 If this is examined it will turn out to be merely another application of the principle already discussed above, namely, that the underwriter is not to be liable for wear and tear. The meaning of excepting from this deduction all repairs to new vessels (or, as the clause was sometimes worded, vessels on their first voyage, or vessels within eighteen months after launching) was that it was not supposed that ordinary use of the hull and materials of a new ship for the first voyage, or for less than eighteen months, would deteriorate them to any appreciable extent. The only cases in which the clause is now customary are those of iron ships getting on in years, in which it is usual for underwriters to stipulate that thirds shall be deducted from the repairs of the parts of the ship that are not iron. The clause runs :— In event of claim, no one-third new for old to be deducted from the cost of ironwork repairs of hull, masts, or spars. In cases in which it is agreed that absolutely no thirds shall be deducted this is expressed in a clause like the following: Average payable on each valuation or on the whole without deduction of thirds, new for old, whether the average be particular or general. Since iron and steel have displaced wood as the material for shipbuilding, the importance of the deduction of thirds is much curtailed by the almost universal adoption in policies of clauses rendering underwriters liable for these thirds,2 but as regards the ship underwriter's liability in respect of general average it is still of effect. In the clause last quoted reference is made to this, so that frequently in statements of average an item occurs, "ship's proportion of thirds deducted in general average." But in the absence of any such clause the practice is based on the custom of 1 2 Q.B.D. 501; 3 Q.B.D. 558. 2 But see Mr. Justice Willes in Lidgett v. Secretan, 1871. Lloyd's as amended by the Association of Average Adjusters 1890, 1891, viz. :—— The deduction for new work in place of old is fixed by custom at one-third, with the following exceptions : Anchors are allowed in full. Chain cables are subject to onesixth only. The rule applies to iron as well as to wooden ships, and to labour as well as material. It does not apply to the expense of straightening bent ironwork, and to the labour of taking out and replacing it. It does not apply to graving-dock expenses and removals, cartages, use of shears, stages, and graving-dock materials. It does not apply to a ship's first voyage.1 Old Materials. Where damage is repaired by replacing old materials by new the value of the old is credited to the underwriter. This credit is in England entered after the deduction of the third from the cost of the new; in America before the deduction; the difference to the underwriter is one-third of the value of the old materials. Incidental Expenses.-As the repairing of a vessel at a port other than her home port involves the shipowner in certain expenses for the superintendence of repairs, these are allowed by underwriters when the cost of repairs is such as to constitute a claim on the policy. If a vessel is repaired at her home port no charge is admitted for the services of a superintendent in the permanent employment of the shipowner. Wherever the repairs are executed no amount is allowed to the shipowner as commission, but bank commission on the amount of the disbursement is paid; nothing is allowed to him for payments made or services rendered at the port where he resides. The costs of surveys and adjustment are apportioned between owner and underwriter over the interests concerned. Adjustment. It is evident from the preceding that the task of separating the items of account that should be charged to the merchant and shipowner from those that should fall in whole or in part on the underwriter is one that demands great care and skill. The result of the difficulty of drawing up such an account is that it has become necessary to found a profession of specialists who devote 1 But the word voyage is very ambiguous; vide p. 236. themselves entirely to the adjustment of marine losses. They dissect the accounts item by item, apportioning the amounts (in the case of a particular average on ship) between ship, ship less one-third, and owner. In the end all that is chargeable to the two former heads is apportioned over the insured value of the ship, each underwriter paying the same proportion of the amount that his subscription bears to the insured value of the ship. No account is taken of the actual value of the ship as distinguished from the insured value, ship being treated differently from goods in that respect. Summary of Documents. For the substantiation of a claim for particular average the following documents are required: (1) Protest of master or log-book. (2) Set of bills of lading (cargo claims). (3) Policy or certificate of insurance (endorsed if necessary). (4) Certified statements in detail of actual cash value at destination of goods in damaged state, all charges paid. Certified statements in detail of sound value at destination of goods on same day, all charges paid. Or original vouchers of costs of repair of ship, all discounts, rebates, allowances, and returns deducted. (5) In United States, subrogation to underwriters of damaged goods. CHAPTER XIII PARTICULAR CHARGES: SUING AND LABOURING EXPENSES Particular Charges.-Expenses incurred in reconditioning cargo at destination have already been discussed as a form of particular average. Such expenses are sometimes incurred at an intermediate point of the voyage. In the absence of any special contract regarding costs of reconditioning, it seems to be equitable that they should be borne by the person who would have been liable for the damage which was prevented or diminished by the reconditioning. Other expenses may be incurred at an intermediate port for the preservation or recovery of the property insured, besides reconditioning expenses; such are warehouse rent, cost of reshipping, cost of forwarding. In the case of Kidston v. Empire Marine, 1866 and 18671 (see below, p. 223), the jury found that expenses of this character are known as "particular charges," and that they are in their nature entirely distinct from particular average, the latter denoting merely actual damage (diminution and/or deterioration), but not expenses incurred in recovering or saving the property.2 As these expenses are not particular average they are not excluded by the memorandum or any other equivalent clause from the liabilities of the underwriter, and for the same reason their incidence is not 1 L. R. I C.P. 535; L. R. 2 C. P. 357. 2 This distinction in English law corresponds to the distinction drawn in France between "avarie particulière matérielle" and "avarie particulière en frais." |