Report No. 21
3. Desirability of following the English Marine Insurance Act, 1906.-
We are also of opinion that the statute should, in general, follow the (English) Marine Insurance Act, 1906. The law as embodied therein represents the experience of a leading maritime nation, extending over nearly three centuries. Marine insurance policy as embodied in the Lloyd's was settled in its present form in 1779, but many of its provisions go back to a much earlier date. Lloyd's policy has been criticised as "an absurd and incoherent instrument",1 "a very strange instrument",2 and its language as "crabbed and obscure".3
But it is based on usage and has been in vogue in the commercial world for too long a period, now to be lightly disturbed. There are numerous decisions of courts, some of them by the House of Lords, construing its provisions, and the rules of interpretation applicable to them may now be taken to be fairly well-settled, and they are embodied in the Schedule to the English Act.
We are aware of the criticisms levelled against the English Act, that it embodies only some of the legal principles governing marine insurance, that its language is cryptic, wide and indefinite, with the result that to understand its true import one has to refer to the law as it stood at the time of the enactment, as expressed in the decided cases.4 But then it has to be remembered that the statute has stood the test of time, having worked satisfactorily for more than half a century, and that it has been adopted in the Commonwealth countries such as Australia and Canada, so much so it can well be said to have assumed the status of a law of nations. As the topic is one which is international in character, both convenience and expediency require that our law should, as far as possible, be in conformity with it.
In fact, business in maritime insurance in this country follows closely the English pattern. Our marine insurance policies are drawn up on the model of Lloyd's policy. Many of our policies are re-insured in England, and these reinsurance policies are governed by the English law. Moreover, when our goods are exported, they are insured, and when those goods are transferred, the relative insurance policies have to be assigned for protecting the rights of the transferee and it will facilitate business if there is uniformity of law. We have therefore decided to follow, in general, the pattern of the (English) Marine Insurance Act, 1906.
1. Per Buller, J., in Brough v. Whitmore, (1791) 4 TR 210.
2. Per Mansfield, C.J., in Lo Cheminant v. Pearson, (1812) 4 Taunt 380.
3. Chalmers' Marine Insurance Act, 1906, 5th Edn., p. 3.
4. Riskards v. Forestal Laud Co., (1942/3) All ER 62 (76): 1942 AC 50 (House of Lords).