Dr Malcolm Clarke


1. Introduction

This paper has been prepared in response to an invitation to discuss, first, the status, i.e. sources and form, of marine insurance law in relevant common law countries; and, second, some of the problems of law and law reform in such countries. However, on the second matter, the limits of my own knowledge are such that most of what I say concerns English law, i.e., law in force in the United Kingdom.



2. Sources of Marine Insurance Law

If we distinguish countries with legislation which to some degree sets out a code of marine insurance, and those without we find that the first group is considerably larger than the second.

The first group is led by the United Kingdom in the sense that the Marine Insurance Act 1906 (MIA) supplemented by the Institute Clauses has provided a model for other countries in the group. 1/ Like many important pieces of legislation the MIA has required clarification by the courts and comment by writers. Within only the last 3 months two more decisions of the Court of Appeal on the MIA have been reported. 2/ The leading work, Arnould's Law of Marine Insurance and Average, 3/ now runs to over 2000 pages in 3 volumes. Interest remains and, even at a basic level, knowledge of the Act is not enough and there have been two more books for the student of marine insurance law 4/

Other countries in this group include Australia, where the main Commonwealth Statute is the Marine Insurance Act 1908 based on the MIA. 5/ Subsequent statutory reforms of general insurance law 6/ do not apply to marine insurance.

In Canada marine insurance is or has been the subject of specific legislation in certain states, for example, the Insurance (Marine) Act 1979 in British Columbia, the Marine Insurance Act 1987 in Manitoba, and the Marine Insurance Act 1973 in New Brunswick. Federal legislation for Canada is found in the Marine Insurance Act 1993. This is based on but not identical to the MIA. In particular, concerning the duty of disclosure (below 5.1.1), s.20 of the Act is substantially the same as MIA s. 18; and, as regards the materiality of warranties (below 5.1.2), s. 39(1) is substantially the same as MIA s. 33(3).

In Hong Kong the Marine Insurance Ordinance (ch 329) of 1964 is modelled on the MIA. In New Zealand, the position is broadly similar to that in Australia. The Marine Insurance Act of 1908, modelled on the MIA, remains in force.7/ In Singapore the MIA has effect under the Application of English Law Act 1993.

Finally, Japan, which can scarcely be described as a country of common law, has rules of marine insurance that are statutory (articles 815 to 841 of its commercial code) and in commercial matters has been influenced by common law. However, the statutory rules, which are of German origin, are ancient, basic and little used in insurance practice. Marine insurance law in Japan is the law of the contract: standard clauses, largely Lloyd's clauses for cargo insurance and clauses drafted in Japanese for hull insurance but influenced by standard Lloyd's clauses and hence English law.8/ This is not because English law is perceived as anything like perfect but because it is recognised that marine insurance law is international and English law is widely applied at least in substance.

In the second group without statutory provisions, the most prominent member is the USA which, until 1955, applied federal law as developed by decisions of the courts. The courts, however, sought explicitly to keep federal marine insurance law in harmony with marine insurance law in England 9/ - at least when it suited them to do so.


3. Divergence

Today the position in the USA is differences with English law have developed on key points. The divergence can be traced to the decision of the Supreme Court in Wilburn Boat in 1955 10/ that not federal law but state law should apply to the particular policy of marine insurance, in casu as regards the effect of warranties. The Court adopted a rule that federal law should apply in cases of marine insurance only when there was an 'established' (later 'entrenched') rule, absent which state law should apply. This has led to divergence within the USA on which rules were 'established' or 'entrenched' and, when state law applied, on the substance of the law to be applied. 11/ It has also led to divergence between the 'law of the USA', whatever that now is, and the law of England.

As regards England, the main areas of divergence concern misrepresentation, non-disclosure (concealment) and warranties, both express and implied. Less significant points of difference, most of which can be removed by policy clauses, concern insurable interest and 'wagering' policies (MIA s. 4(2)); double insurance (MIA s. 32); cover of delay (MIA s. 55(2); the meaning of constructive total loss (s.60); and direct actions by third parties. For example, in the USA the duty of good faith bites at the time insurance is contracted or renewed and no need is seen for the doctrine as such after that. 12/ English law sees the duty as continuing in various degrees up to and including the point of claim. 13/

A response to the situation in the USA was that in 1993 the Ad Hoc Committee for a US Marine Insurance Act of the Maritime Law Association of the US (MLA) was set up. Its task was to examine the MIA and consider whether it might serve as a model for such legislation at a federal level in the USA. The Committee reported in 1995, it seemed, in favour of legislation. 14/

While it is widely accepted that a comprehensive statute would he the ideal solution, some scepticism has been expressed, in particular, about whether Congress would enact such a statue in time to be of use. 15/ Indeed, the lack of enthusiasm in Congress for other international commercial 'legislation' such as the Hague/Visby Rules and the Vienna Convention on Sales, even though there had been a significant drafting contribution by Americans, lends credence to this scepticism. Be that as it may, in 1998 the stance of the MLA changed in favour of some kind of Restatement.

In conclusion, common law countries have a degree of uniformity law based on English law, however, that uniformity is breaking up. This is the first of the problems from the perspective of common law countries. The other problems raised in the following pages are not exhaustive.



4. Problems of Demarcation

4.1. Marine insurance law and non-marine insurance law

If the first problem is the divergence just referred to, the second problem is to take account of differences in substance between marine insurance law and non-marine insurance law. Unless

it is quite clear that a particular rule applies to marine insurance only, the assumption in England tends to be that the rules are the same. This matters because any legislator who is asked to

make new law for marine insurance law will want to know how far its effects will be felt and, in particular, whether the new rule is to apply also to non-marine insurance law. Indeed, he may also want to know whether it is has any implications for the general law of contract; see below 4.3.

Between marine insurance law and non-marine insurance law there are a number of points on which it is largely accepted that the rules are different. In the event of proposals for legislative

reform and, perhaps, anyway, the reasons for these differences are likely to be a matter for scrutiny and reconsideration. Among the differences are the following.16/

(i) In marine insurance law the amount recoverable is based on values when risk commences 17/ rather than, as in non-marine insurance law, the time of loss.

(ii) In marine insurance law a contract may be ratified after the insured has become aware of the loss. 18/ In non-marine insurance law the same is true in Canada and the USA, however, the position in England is disputed and may be different. 19/

(iii) In marine insurance law statements in the policy are more likely to be construed as warranties. 20/

(iv) In marine insurance law certain kinds of increase in risk automatically discharge the insurer. 21/

(v) In marine insurance law the broker is liable to the insurer for payment of premium. 22/

(vi) The marine doctrine of constructive total loss does not apply in non-marine insurance law. 23/

(vii) Previous declinature of cover is not a material matter for disclosure in marine insurance law.24/

The justification for a number of particular differences, such as (ii), (vi) and (vii), is not obvious to people outside the world of marine insurance law. The general trend within insurance law, however, is one of polarisation so that, if reasons can be given, differences between marine insurance law and non-marine insurance law will not be unacceptable.

4.2. Polarisation or convergence?

Polarisation in practice is most apparent as regards consumers of (non-marine) insurance law. For consumers the forum for disputes in practice is not in the ordinary courts 25/ but in the service set and financed up by the insurance industry, the IOB (Insurance Ombudsman Bureau), which handles between three and four thousand disputed cases a year. 26/ The importance of this for insurance law in general is that under its terms of reference the IOB has regard, not only to the terms of the contract and any applicable rules of law, but also to the general principles of (not only what is but what ought to be) good insurance, investment and marketing practice, and to the Statements and Codes of Insurance Practice published by the Association of British Insurers (ABI). In the event of conflict between the latter and ordinary rules of law, the latter apply when they favour the insured. On this basis the mission of the IOB is to assess what solution would be fair and reasonable in the circumstances of the case. The result is the development of 'rules' quite different from those established in the black letter law of insurance. Moreover, not only the IOB but also the ordinary courts in commercial cases pay some regard to the Codes and Statements of Practice but, of course, without giving them the precedence given them by the IOB.

As for rapprochement of marine and non-marine insurance law the immediate reaction of the market might well be that, of course, the principles of marine insurance law have and should have "characteristics that are specifically orientated to the particular risks inherent in ocean marine insurance". 27/ This is certainly true of hull and machinery cover. 28/ As regards cargo insurance, however, that truth is less obvious now than it has been in the past.

In In re Balfour Maclaine Int Ltd, 29/ for example, a cargo of coffee awaiting export to the USA disappeared from warehouses in Mexico. Once upon a time the warehouse stage would have been seen as a marine risk ancillary to a sea voyage. The decision, however, was different and that the marine good faith doctrine did not apply, because land storage insufficient connection with maritime commerce. The Federal Court, Second Circuit, accepted the argument that "coverage of warehouse storage risks ... are outside the scope of traditional maritime risks, and such coverage is severable from the policy as a whole". 30/ Non-marine insurance law applied Cargo risks may also be distinguished from hull risks by the continuing development of intermodal transport and, with it, calls for integrated intermodal transport law.31/ True, the Multimodal Transport Convention has languished on the shelf since 1980 but that is not because no need for such a convention exists. New moves are now afoot for Europe at least at the heart of the Commission in Brussels.

4.3. Insurance law and contract law

Except perhaps on one point, 32/ English law was clarified on the materiality of the information to be disclosed in the celebrated Pan Atlantic case. 33/ Moreover, with regard to misrepresentation, the insurance rule was deliberately brought into line with the corresponding rule of the general law of contract. This has the attraction that the lawyer new to marine insurance law has some points of reference on what might otherwise have been uncharted seas; and that there can be cultural cross-over: developments and ideas in one sector are available to the other. This trend underlines the importance of the further question of divergence whether and to what extent the law of marine insurance law does or should differ from general contract law.

In contrast with Pan Atlantic stands a recent decision of the Court of Appeal. In Economides, 34/ the Court confirmed that the basic rule for insurance contracts, marine or non-marine, is still that of section 20 of the MIA, that a "representation as to a matter of expectation or belief is true if it is made in good faith". The Court held that the 'good faith' required may contain an element of subjectivity and, contrary to the argument of the insurer, does not carry any necessary implication of objectively reasonable grounds, in the absence of which the representation could be said to be false. On this point section 20 differs from the corresponding rule of general contract law which is that "if the facts are not equally known to both sides, then a statement of opinion by the one who knows the facts best involves very often a statement of a material fact, for he impliedly states that he knows facts which justify his opinion". 35/

On other points, however, such as the effect of breach of warranty, 36/ as well as the requirement that to be operative a misrepresentation must induce the insurer to contract, 37/ courts in recent years have brought insurance law back into line with general contract law. So, my suggestion is simply that, if any reform of marine insurance law is to be accepted in common law countries where commercial and non-commercial law are not segregated, the wider dimension - the implications for both non-marine insurance law and general contract law - will have to be considered.


5. Substantive Law

More problems are posed by existing rules of marine insurance law. First and foremost there is dissatisfaction in some quarters with the rule of disclosure as it applies to marine insurance

(and in England to non-marine insurance). As more will be said about non-disclosure later by Yvonne Batz with reference in particular to the consequences of non-disclosure, I shall confine myself here to non-disclosure itself, and a related rule affecting warranties.

5.1. Investigation

The proposer of insurance is not obliged to disclose material information already known to the insurer. On the one hand, the insurer can not be expected to know much about the particular risk - less than the proposer, whose risk it is. On the other hand, it might be thought that the insurer should have considerable general knowledge of the kind of risk and of the social, commercial and political context in which it is. Indeed, each insurer, said Lord Mansfield, 'is presumed to be acquainted with the practice of the trade he insures'. 38/ For example, the insurer of pleasure boats is taken to know that, if they are laid up for the winter in Spain, a certain level of theft and vandalism is to be expected. 39/ The insurer is expected to be aware of important events occurring at the time of contracting, and to make any connection between those events and the risk proposed. 40/ However, he is not expected to recall events reported in the past, however prominent then, but which appeared to have no bearing on his business at the time but which turn out to be relevant to a risk proposed later, in one case, no more than 3 months later. 41/ Although demands are made of his awareness, little is required of his memory.

This remains an issue of some controversy. Might one not expect insurers, as a matter of sound business practice, to collect and to accumulate information and experience, which not only is but also might be of importance in the future, in retrievable form ? In Bates Cockburn CJ thought not. He stated a traditional view of English law which has not changed since:

"We should be sanctioning an encroachment on a most important principle, ...if we were to hold that a party...may speculate as to what may or may not be in the mind of the underwriter, or as to what may or may not be brought to his mind by the particulars disclosed to him by the insured....If we were to sanction such a course, especially in these days, when parties frequently forget the rules of mercantile faith and honour which used to distinguish this country from any other, we should be lending ourselves to innovations of a dangerous and monstrous character, which I think we ought not to do." 42/

That was in 1867. Mercantile faith and honour may or may not have improved since then but the means of collating, collecting and recalling information have improved greatly. For example, software is now in use which enables any accredited employee of the insurer to call up the claims history of any policy holder, with images of all original documents and thus without the paper chase through the insurer's different departments that was necessary in the past. Of course, the data must be there; but one composite insurer is planning a 'data warehouse' of 200 gigabytes which is expected to reach a terabyte within four years - all this to analyse market data, and with satellite 'data marts' for the use of particular departments. If the composites can do it why not marine underwriters ?

English law, however, is still based on precedents 43/ from a world of paper and pink ribbon. It allows the insurer to plead ignorance of information which he has on file. Can it really be said that an organisation such as Tokyo Marine which, I have been told, has internal communication between its offices by satellite, really needs to be protected in this way ? In other countries it is not. There the law has kept pace with the computer. In the USA and in Canada, for example, if the insurer fails to look in his files, hard or soft, he has waived the information which they contain. 44/

In current jargon, a rational rule of law is said to be the one that minimises 'the joint costs of a potential mistake by assigning the risk of its occurrence to the party who is the better (cheaper) information-gatherer'. 45/ As regards insurance disclosure the Canadian Supreme Court, for example, has encouraged the quest for information by holding that an aviation insurer must scan the public records of accidents that might have a bearing on the risk proposed. 46/ In contrast, the Bates rule is not efficient because it does nothing to encourage the insurer to acquire available information by investigating risk. The insurer knows that, if the risk turns out to be worse than it appears on a superficial presentation, he can plead ignorance and Bates to avoid the contract.

5.2. Materiality

5.1.1. Disclosure

To decide what is material, reference is made to the judgment of the 'prudent insurer', a hypothetical market model. However, there is no single model. Prudence varies from one branch of the market to another. The prudent insurer's judgment differs according to whether, for example, he writes marine insurance or fire insurance. In a particular case, the court receives evidence of market opinion - with both respect and, occasionally, scepticism. Nonetheless the rule has been attacked as harsh in several respects.

First, the proposer might well think that the questions put by the proposal form are the best guide to the matters material to the risk. Indeed, if the insurer does ask questions, whether in the form or on the phone, In some countries such as the USA 47/ there is a presumption, that the questions both indicate and delimit what is material to the risk, but not in England. In England the questions put are neither conclusive nor exhaustive of the information required. The proposer may complete the form with scrupulous care but still find that there was something else material to the prudent insurer which, apparently, the insurer did not think to ask about but which, nonetheless, he is expected to think of and disclose.48/

Second, if the prudent insurer in the English market considers the information material, it is irrelevant that the reasonable proposer would not. In contrast, in Australia, for example, the non-marine rule is one of what the reasonable proposer (or reasonable insured) would consider material; if the insurer wants to know more, it is for the insurer enquire. 49/ Many people think the same rule should apply to marine insurance law as well not only in Australia but also in England.

5.1.2. Warranties

As regards breach of warranty English insurance law, marine and non-marine alike, provides that breach of warranty automatically terminates cover even though the breach was neither material to the risk or to the loss. 50/ It was the objections to such a rule and the desire of the court to do justice in the case which inspired the controversial decision of the Supreme Court of the USA in Wilburn Boat.51/

In that case a small houseboat was destroyed by fire but the claim was refused by the insurer with reference to breach of warranties - one was that the boat would be used only for pleasure purposes - which had no causal connection with the loss. There is little doubt that in England, then and now, the defence would have succeeded. 52/ The Supreme Court, however, held that the breach had not 'contributed' to the loss as required by a Texas statute for fire insurance, and the defence failed.


5.3 Insurable Interest

English insurance law, marine and non-marine, requires insurable interest in property. For this it requires not only a reasonable expectation of economic loss, if the property is lost or damaged, but also a 'legal or equitable relation' between the insured and the property. 53/ Consequently, the FOB or CIF buyer has no insurable interest in goods contracted for until risk has passed (usually on shipment) or (part of) the price has been paid. Generally, the buyer cannot insure goods allocated to his contract, however important they are to his business, in respect of loss or damage before shipment. On this important point English law is out of line with that of the USA, 54/ Canada 55/ and Australia. 56/ The requirement of legal or equitable relation is regarded as unnecessary 57/ and is not required. Goods contracted for are insurable before shipment.

6. The Case for Reform

The case for clarification and, therefore, for reform was put clearly by Sturley 58/ in respect of law in the USA but applies no less to the wider world:

"In the absence of predictability and uniformity, both insurers and the parties who depend on marine insurance are unable to order their affairs with confidence as to what risks they are bearing. The costs of insurance increase, as underwriters must charge a higher premium in light of the uncertainty, but the value of the insurance is diminished, as assureds are less confident they will recover in the event of a loss. Litigation is more often necessary to resolve disputes, once again increasing the costs. Ultimately, all of these costs are borne by the consumers who purchase goods that are transported by sea - goods that are insured under marine policies, carried on insured vessels, and handled by workers whose health and safety are covered by marine insurance."


7. The Problem of legislation.

If legislative reform is sought, in England and to some degree also in other common law countries, problems might be encountered as follows.

7.1. The 'Enthusiasm' of lawyers

The MIA followed "the great codifications of the laws of Partnership, Bills of Exchange and Sale of Goods",59/ in the latter stages of an age in the development of the law in which codification was fashionable and, fortunately, was entrusted in England to the masterly Chalmers. Codification is no longer in fashion. It has given way to champions of the common law of cases such as Professor Cheshire, who spoke of "the paralysing hand of the Parliamentary draftsman"; and the Master of the Rolls, Lord Evershed, who once described the interpretation of statutes as "intellectually exacting but spiritually sterilising". 60/ Such attitudes persist.

Indeed, more open minds have been more or less closed by the force of disillusionment. All of the codes, including the MIA and more notably the Sale of Goods Act, have given rise to extensive litigation and it has been observed that "the larger the body of case law the less successful the statutory provision". 61/ Although this prospect did not deter the Parliament in Canberra from a wholesale reform of non-marine insurance law in Australia in 1984, there has been much reported litigation on it since and one wonders whether Australia would do it again.

Experience has reinforced the more dispassionate objections of sceptics such as Lord Goff, still a figure who commands great respect among lawyers in England. In a celebrated series of lectures over a decade ago, he opined that codification "should only be undertaken where the good it may do is perceived to outweigh the harm it must do", 62/ and referred to the MIA as a case where the good did not outweigh the harm. 63/

The harm he perceived is, first, that, as regards codification of existing law, the law is frozen as in a photograph and that, like a photograph, it usually lies: it is "not possible for any code to provide an absolutely accurate, still less a complete, statement of the law on any topic". In this connection, Lord Goff referred to the 'fallacy of the instant, complete solution'. The law, like everything else, is in a continuous state of development. 64/ In a similar vein one of the English Law Commissioners said more recently of the law of contract that he did not wish to see "the law frozen by widespread legislative intervention" and that he was "far from convinced that it is sensible for there to be a legislative codification" of that law. 65/ Moreover, the Chairman of the Law Commission 66/ has acknowledged "concern about statute law stifling the ability of judges to develop the law". 67/ Legal thinking changes too 68/ but revision of codified statutory law to reflect these developments is difficult.

Second, there is, said Lord Goff, 'the temptation of elegance'. This is the temptation to adopt a solution because we are attracted by elegance of the kind which carries a degree of credibility. Elegance is often associated with simplicity which has its own attractions. Law, said Lord Goff, must "reflect life in all its untidy complexity, and we have to be constantly on our guard against stating principles in terms which do not allow for the possibility of qualifications or exceptions as yet unperceived". 69/

The current Chairman of the Law Commission, 70/ however, has expressed a more positive view of codification. 71/ First, she argues, codification makes the law more accessible. Written in modern language, it can be read by the non-lawyer. This may be true but the point is of limited importance for marine insurance law. Second, she argues, it is in most situations quicker and easier to find the answer to a legal problem in a code - on the assumption that most legal problems do not raise new points of law but can be solved by the application of established rules. "Dispensing with encrustations of case law will make it easier to find the answer". 72/


7.2. The 'Enthusiasm' of politicians

A further problem on the path of legislation is the lack of Parliamentary time and inclination. 73/ A Parliament with members who are subject to re-election prefers to spend time and energy on legislation that is attractive to a significant section of the electorate. In a democracy such as ours, lawyers' law lacks 'sex appeal'. Any movement for reform must overcome a lack of political will. Statutory reform today is likely to be limited to what has been called legislative microsurgery: statutes to correct particular defects. 74/ So, the most realistic plan, as concerns English law, would be to identify particular defects such as non-disclosure and warranties and join the waiting list for microsurgery. This would be more acceptable to "a people temperamentally inclined, perhaps climatically conditioned, to a philosophy of gradualism". 75/ So it is that the strategy of the English Law Commission is the reform of problem areas in 'manageable chunks.' 76/


8. Alternatives to Legislation

If more than microsurgery is required, what are the alternatives to legislation ? "The role of classifying and rationalising - and hence codifying - wide areas of the common law is, in my view, generally best left to academics through the writing of books, or to learned bodies, such as the American Law Institute, through the publication of non-binding 'Restatements'. Non-binding codes are invaluable. Binding codes are dangerous....And it seems to me that, despite European initiatives and despite our statutory duty to consider codification, the political will to support a codification of [general contract law] is now non-existent" in England. Thus spake one of the current Law Commissioners, himself an academic of distinction. 77/ England has nothing as authoritative as a Restatement of the ALI (American Law Institute), so a code it must be. Lord Goff agreed: "the best code is one which is not binding in law", and which states principles followed by illustration and discussion. The example from England best known to this audience would be Scrutton on Charterparties and Bills of Lading. 78/

In the insurance context in the past, as an alternative to legislation, there have been Statements of Practice by the ABI for voluntary adoption by (non-marine) insurers. These, of course, do not require the approval of Parliament and can be updated more easily. Whereas Restatements imply no duty of compliance and have the force only of their prestige and inherent wisdom, statements or codes of practice adopted by trade organisations for their members imply a communal obligation of observance. However, although recently the ABI has arranged for compliance to be monitored, scepticism has been expressed about the extent of compliance in practice and the effectiveness of the monitoring. Moreover, the current plans of the British government for a Financial Services Authority assume that those that provide such services cannot be trusted to comply voluntarily and that some mechanism of enforcement is required. If the solution is a voluntary code, it will have to be well made so that the force of its authority lies in its quality, in the 'reason of the thing'. It will have to carry conviction.


Paper presented to the Marine Insurance Symposium held in Oslo, 4-6 June 1998, by the CMI, the Norwegian Maritime Law Association and the Scandinavian Institute of Maritime Law; and published with other symposium papers in the Institute's Yearbook (Marlus) 1998.

1/ Principally, Institute Cargo Clauses (A) for all risks cover, (B) and (C); Institute Time Clauses - Hulls; Institute War Clauses. For the full list see, for example, Merkin, Annotated Marine Insurance Legislation (London 1997), Appendices; and for commentary, see Arnould (below) vol. 3 part 1. Please note that, although the MIA applies in both countries, on certain points the law of Scotland differs from the law of England. See Forte [1993] LMCLQ 557; Rodger (1992) 109 LQR 570. Further, although common lawyers sometimes speak of Acts such as teh MIA as works of codification, they are not systematic and comprehensive statements of law such as the French Code de commerce, or even the French Code d'assurances.

2/ Royal Boskalis Westminster NV v Mountain [1998] 2 WLR 538, concerning s. 41 (the warranty of legality) and s. 78 (the Suing and Labouring Clause); and Chapman & Co Ltd v Kadirga Denizcilik Ve Ticaret SA, The Times 19 March 1998 (CA) concerning s. 53(1)

(brokers' recovery of premiums).

3/ (16th ed.) 1997, edited Jonathan Gilman QC. See also O'May on Marine Insurance; and Templeman, Marine Insurance.

4/ Bennett, The Law of Marine Insurance (Oxford 1996); Hodges, Law of Marine Insurance (London 1996).

5/ There is also some state legislation on the matter; see Tarr, Liew and Holligan, Australian Insurance Law (2nd ed., Sydney 1991) ch. 14.

6/ Insurance Contracts Act 1984. Note, however, that the Insurance (Agents and Brokers) Act 1984 applies to all intermediaries.

7/ Cf the Insurance Law Reform Act 1977 for non-marine insurance law. The Act did not change the common law as regards non-disclosure.

8/ I am grateful to Satoshi Nakaide of Tokyo Marine for his advice.

9/ Queen Ins of America v Globe & Rutgers Fire Ins Co, 263 US 487 (1924); Calmar SS Corp v Scott 345 US 427 (1953); Lenfest v Coldwell, 525 F 2d 717 (2 Cir, 1975).

10/ Wilburn Boat Co v Fireman's Fund Ins Co, 348 US 310 (1955), as interpreted, in particular, in Albany Ins Co v Anh Thi Kieu 927 F 2d 882 (5 Cir, 1991). The Wilburn Boat case is described below.

11/ See the account of differences in the federal courts by Schoenbaum 29 J Mar L & Com 1, 11 (1998). As regards state law, see ibid p 13. The text immediately following here is partly based on this and other (unpublished) work by Professor Thomas Schoenbaum, whose help is gratefully acknowledged.

12/ Schoenbaum 29 J Mar L & Com 1, 32 (1998).

13/ The Star Sea [1997] 1 Lloyd's Rep. 360 (CA). An appeal to the House of Lords is to be heard early in 1999.

14/ MLA Report, Document no 719, most of which was published in 20 Tul Mar L J 1 (1995) which outlines differences between the MIA and the corresponding rules in the USA.

15/ Sturley, 29 J Mar L & Com 41, 51 (1998). The author's counter proposal is a Restatement of Marine Insurance Law by the American Law Institute.

16/ For a more complete list, see Colinvaux's Law of Insurance (7th ed., London 1997) ch 1-20; or Merkin, Annotated Marine Insurance Legislation (London 1997) p 1.

17/ MIA s. 16

18/ MIA s. 86

19/ Clarke, The Law of Insurance Contracts (3rd ed., London 1997) ch 7-4D1.

20/ See Colinvaux (above) loc cit.

21/ Delay, deviation or change of voyage. Clauses with a similar purpose in non-marine policies have been construed very strictly against the insurer; see, for example, Kausar v Eagle Star Ins Co Ltd [1997] CLC 129 (CA).

22/ MIA s. 53.

23/ Moore v Evans [1918] AC 185.

24/ Glasgow Assurance Corp Ltd v Symondsen (1911) 16 Com Cas 109, 119 per Scrutton LJ (CA). This is probably a consequence of facts about Lloyd's which, in view of the corporate membership today, is due for review.

25/ The County Court has a jurisdiction for 'small claims' but it seem that in practice it does not hear many insurance cases.

26/ See the Annual Report, 1997

27/ Miller p 10295 in a paper appended to the MLA Report: above n. 16.

28/ See Miller pp 10334 ff.

29/ 873 F Supp 862 (SD NY, 1995), affirmed 85 F 3d 68, 74 (2 Cir, 1996). Criticised by Schoenbaum 29 J Mar L & Com 1, 12 (1998).

30/ p 81. "According to New York law, the severability of a contract is a question of parties intent": ibid. Such intent was easier to infer in casu than it might be in other cases.

31/ See, for example, Pesce (1997) 32 ETL 503; Clarke, Tilburg Lectures (Baden-Baden 1998) pp 101-134.

32/ The so-called 'presumption of inducement' (p 549 and p 551 per Lord Mustill) has resulted in some scratching of heads: see Schoenbaum 29 J Mar L & Com 1, 29, who describes the reference as a 'careless remark'; see also Clarke ch 23-2A.

33/ Pan Atlantic Ins Co v Pine Top Ins Co [1995] AC 501

34/ Economides v Commercial Union Assurance plc [1997] 3 WLR 1066 (CA); Clarke [1998] CLJ 24.

35/ Smith v Land and House Property Corp (1884) 28 Ch D 7, 15 per Bowen LJ (CA).

36/ The Good Luck [1992] 1 AC 233.

37/ Pan Atlantic (above).

38/ Noble v Kennaway (1780) 2 Doug 511, 513.

39/ The Moonacre [1992] 2 Lloyd's Rep 501, 517.

40/ Lean v Hall (1923) 16 Ll.L.Rep. 100

41/ Bates v Hewitt (1867) L.R. 2 Q.B. 595.

42/ p 606-7.

43/ London General Ins. Co. v General Marine Underwriters' Assn. [1921] 1 K.B. 104 (C.A.) and Greenhill v Federal Ins. Co. [1927] 1 K.B. 65 (C.A.). But cf Stone v Reliance Mutual Ins. Sy. Ltd [1972] 1 Lloyd's Rep. 469 (C.A.).

44/ Columbia National Life Ins. Co.v Rodgers 116 F 2d 705 (10 Cir, 1940), cert den 314 US 637. Coronation Ins. Co. v Taku Air Transport Ltd. (1991) 85 D.L.R. (4th) 609, 623.

45/ A. T. Kronman, 'Mistake, Disclosure, Information, and the Law of Contracts' 7 J Legal Studies 1, 4 (1978). R. Posner, Economic Analysis of Law (3rd ed., 1986) p 97.

46/ Taku Air (above n.46). Also that a liability insurer should have been aware of the dangers of asbestos at a time when these dangers had become a matter of notoriety in the press, both technical and general: Canadian Indemnity Co. v Canadian Johns-Manville Co. (1990) 72 D.L.R. (4th) 478.

47/ INA v US Gypsum, 870 F 2d 148, 153 (4 Cir., 1989). Albany Ins Co v Anh Thi Kieu 927 F 2d 882 (5 Cir, 1991); Schoenbaum 29 J Mar L & Com 1, 25-26 (1998). Also, I believe, in Finland, (Insurance Act 1994 s.22.) and Germany (BGH 25 March 1992, NJW 1992.1506.). In England, cf Greenhill v Federal Ins Co Ltd [1927] 1 KB 65 (CA); Marc Rich & Co AG v Portman [1996] 1 Lloyd's Rep 430. But cf also Court v Martineau (1782) 3 Dougl 161, 163 per Lord Mansfield.

48/ The IOB, which has jurisdiction which permits it to do what is fair and reasonable, takes a different line; if the insurer does not ask clear questions about something, the insurer has waived disclosure of the matter; see text at note 28.

49/ Insurance Contract Act 1984 s. 21. Also the unimplemented recommendation of the English Law Reform Committee, Cmnd 62 (1957) 7.

50/ As regards marine insurance law see MIA s.33. As regards non-marine insurance law, see Clarke ch 20.

51/ Above n. 10. See Goldstien, 28 J Mar L & Com 395, 410 ff (1997) concerning the Court's view of the justice of the case.

52/ Foley v Tabor (1861) 2 F & F 663, 672 per Erle CJ. Idem in non-marine insurance law: Thomson v Weems (1884) 9 App Cas 671, 685 per Lord Blackburn. Clarke (above) ch 20-3B.

53/ Macaura v Northern Assurance Co [1925] AC 619.

54/ Hayes v Milford Mutual 49 NE 754 (1898).

55/ Constitution Ins Co v Kosmopoulos [1987] 1 SCR 2.

56/ ICA 1984 s. 17.

57/ The case against English law was well put by Wilson J in Kosmopoulos (pp 17 ff).

58/ 29 J Mar L & Com 41, 45 (1998). See also Miller pp 10296, 10302 ff and 10336 ff, in a paper appended to the MLA Report: above n. 16.

59/ Beatson [1997] CLJ 291, 299.

60/ Ibid

61/ Beatson p 302.

62/ (1983) Proc Brit Acad 169, 172-173 (emphasis added).

63/ p 174. He did not explain.

64/ p 174.

65/ Professor Burrows speaking in late 1995: (1997) 1 ELR 155, 156.

66/ Dame Mary Arden, one of Her Majesty's judges.

67/ [1997] CLJ 516, 532

68/ p 173. He illustrates with thinking about the effect of mistakes on contract which moved from a subjective acceptance that remedy should be available to an objective view which is more restrictive.

69/ p 174.

70/ See above n. 63.

71/ [1997] CLJ 516, 532 ff

72/ p 533. I wonder whether finding 'the answer' will not become much easier when law can be searched electronically. She also argues that codification enables the law to be updated and modernised but does not answer the point about 'freezing the action'; see text at n. 61. Her other arguments can also be made for 'micro-surgery' of identified defects. She concludes (p 536) in favour of a commercial law code enacted in stages.

73/ The length of the process can be gauged from the description given by Arden [1997] CLJ 516, 535.

74/ Beatson p 301. Even these have proved problematical and unclear. See for example the short but troublesome Misrepresentation Act 1967, and the arcane hotchpotch of the Unfair Contract Terms Act 1977.

75/ Goff p 169.

76/ See Burrows (1997) 1 ELR 155.

77/ Professor Burrows speaking in late 1995: (1997) 1 ELR 155, 156 and 179. For the duty of the Commission, see Law Commissions Act 1965, s 3(1). However, the government is not obliged to follow the advice of the Commission. In the view of the Chairman (March 1997), the "case for a criminal code is unanswerable" but met little support from the (then) government: Arden [1997] CLJ 516, 536.

78/ 20th ed 1996. Lord Goff referred (p 174) not to this but to Dicey & Morris on the Conflict of Laws and Bowstead on Agency. Another possibility might lie in model insurance clauses such as the Institute clauses or those drafted by UNCTAD. Unlike the former the latter have not been much used in England.