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Report No. 21

Clause 79

General.-This deals with "suing and labouring" charges. "Suing" is perhaps an abbreviation of "pursuing".

Meaning of the section.-The so-called sue and labour clause in a policy reads as follows:-

"And in case of any loss or misfortune it shall be lawful to the assured, their factors, servants and assignees to sue, in and above the defence, safeguard, and recovery of the said goods and merchandise and ship etc., or any part thereof without prejudice to this insurance. To the charges whereof, we, the insurers, will contribute each one according to the rate and quantity of the sum herein assured".

Object.-The object behind this clause1 is to enable the assured to recover costs incurred for preservation of the subject-matter insured. Actually it benefits the insurer because his Liability is reduced if the assured etc., take prompt action for preservation.2

Relation to particular charge.-Sue and labour charges are a species of particular charges.3

Examples.-Examples of charges which fall under this section are- (i) charges under a salvage agreement, (ii) costs incurred to recondition damaged goods, (iii) expenses of forwarding goods by another ship to save freight.

Sue and Labour Charges, Salvage Charges and General Average Expenditure, Distinguished.- The following chart will show the distinction between the various classes of charges:-

Salvage Section 65

General Average Section 66

Sue and Labour Section 78

Arising by Maritime Law Arising by Maritime Law Incurred under an express clause.
Incurred by others May be incurred by the assured or by others. Incurred by the assured or his agents.
Is governed by the policy Is governed by the policy. Is regarded as an independent agreement.
Measure of indemnity is is limited by general provisions. Measure of indemnity is limited by general provisions. Is payable notwithstanding that the insurer may have paid for a total loss.
S. 65 expressly excludes from salvage charges expenses rendered by the assured or his agents for averting peril insured Against. Section 78 (2) expressly excludes general average losses and contribution and salvage charges from the Sue and Labour Clause.
Is incurred for preventing loss and consists of positive expenditure. Is incurred for preserving the property imperilled in common adventure and consists either of sacrifice or positive expenditure. Consists of positive charges for the defence, safe-guard and recovery of the goods, etc
Incurred for the benefit of the whole adventure. Incurred for the benefit of a particular subject matter.4

1. Lord Chorley Shipping Law, 3rd Edn., p. 319.

2. For a full discussion, see Keate, p. 72-73 and Dover, pp. 270-272.

3. See notes to clause 65.

4. See Keate, p. 73 and Dover, p. 270.

4. See Keate, p. 73 and Dover, p. 270.

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