Key Divergences Between English and American Law of Marine Insurance: A Comparative Study

by Schoenbaum, Thomas J.

• ISBN13: 9780870335228
• ISBN10: 0870335227
• Format: Hardcover
• Copyright: 2000-01-01
• Publisher: Cornell Maritime Pr/Tidewater Pub

Summary

From the time of Elizabeth I in the second half of the sixteenth century, London has dominated the marine insurance markets. This led the English to develop a law of marine insurance as well: a Chamber of Assurances was established in England in 1575, and the law of marine insurance, rooted in custom, developed through the cases decided by the courts.

In the United States, marine insurance underwriting began in the eighteenth century, although British firms continued to dominate. The American law of marine insurance took its cue from English law; English legal precedents were cited routinely in American courts. For fifty years after the English law was codified in the Marine Insurance Act 1906 (MIA), it could truly be said that there was a unified Anglo-American law of marine insurance, and that English law was part of the "general maritime law" of the United States.

The unity of the Anglo-American law, which was so beneficial to the functioning of the international marine insurance industry, was broken abruptly in 1955 by the decision of the United States

Table of Contents

Preface	ix
Table of Cases-English	xi
Table of Cases-American	xviii
Table of Cases-Other	xxviii
Table of Statutes, Statutory Instruments, and Conventions	xxix
Introduction	3	(17)
The Scope of Marine Insurance	3	(1)
The Marine Insurance Policy	4	(8)
Hull Insurance	5	(1)
Cargo Insurance	6	(3)
Freight Insurance	9	(1)
Protection and Indemnity Insurance	9	(3)
Objectives and Purpose of This Study	12	(1)
The Breakdown of Uniformity	13	(2)
An Overview of the Substantive Extent of the Breakdown of Uniformity	15	(2)
Thesis and Theoretical Framework	17	(2)
Toward a New Convergence of Anglo-American Law	19	(1)
The Wilburn Boat Case and the Breakdown of the Uniformity of English and American Law	20	(19)
Background: The Influence of History	20	(8)
England	20	(3)
United States	23	(1)
Tort Jurisdiction	24	(1)
Jurisdiction over Contracts and Marine Insurance	25	(3)
The Challenge to Uniformity: State Law and Considerations of Federalism	28	(5)
A Jurisprudential Interpretation of Wilburn Boat	33	(2)
Legacy of Wilburn Boat: Conflicts and Confusion	35	(2)
Conclusion	37	(2)
Jurisdictional and Definitional Considerations	39	(25)
Wilburn Boat and Admiralty Jurisdiction	39	(2)
Introduction	39	(1)
An Illustrative Example: Youell v. Exxon Corporation	40	(1)
Federal Admiralty Jurisdiction over Marine Insurance Contracts in the United States	41	(3)
Choice of Law and Jurisdiction in English Law	44	(2)
Resolution of the Crisis: A Statutory Definition of Marine Insurance	46	(17)
The Point of Departure: The Definition of Marine Insurance under the British Marine Insurance Act	47	(3)
Insurable Interest	50	(5)
Direct Actions	55	(4)
The Subject Matters of Marine Insurance	59	(4)
Conclusion	63	(1)
Effecting The Contract	64	(21)
A Bit of History	64	(2)
Contract Formation	66	(3)
Effecting Insurance at Lloyd's	66	(1)
Selected Contract Formation Issues	67	(2)
The Policy	69	(8)
Introduction	69	(1)
Policy Requirements	70	(1)
Subject Matter	70	(1)
Duration	71	(1)
Valued and Unvalued Policies	72	(1)
The Relationship between the Policy and the Slip	73	(4)
Marine Insurance Intermediaries	77	(7)
Introduction	77	(1)
The Broker's Agency Relationship	77	(2)
The Broker's Duty to Carry Out the Assured's Instructions	79	(1)
The Broker's Duty of Care	80	(1)
The Fiduciary Duties of the Broker	80	(1)
The Broker's Liability to Third Parties	80	(2)
Payment and Return of the Premium	82	(2)
Conclusion	84	(1)
The Duty of Utmost Good Faith	85	(45)
Introduction	85	(3)
The Duty of Utmost Good Faith---General Considerations	88	(10)
The Source of the Duty	88	(1)
English Law	89	(3)
American Law	92	(1)
The Development of the Rule of Utmost Good Faith in the United States	92	(2)
Avoidance of the Rule: State Law and the Wilburn Boat Decision	94	(4)
The Particular Elements of the Duty of Utmost Good Faith	98	(30)
Misrepresentation	98	(3)
Non-Disclosure	101	(6)
Mutuality	107	(1)
Materiality	107	(1)
English Law	107	(9)
American Law	116	(1)
Inducement (Reliance and Causation)	117	(2)
Burden of Proof and the Presumption of Inducement	119	(2)
The Role of Agents	121	(1)
The Duration of the Duty	122	(2)
Waiver	124	(1)
The Legal Effect of the Breach	125	(1)
Rescission	125	(1)
Proportionality	126	(1)
Damages	127	(1)
Conclusion	128	(2)
Warranties	130	(42)
Introduction	130	(2)
The Historical Development of Warranty: The Interrelationship with Promise, Condition, and Misrepresentation	132	(7)
Land Law	132	(1)
Trespass (Deceit) on the Case	133	(1)
Assumpsit	134	(4)
Warranty in the Law of Marine Insurance	138	(1)
The Contemporary Law of Warranties	139	(20)
The Nature and Function of Warranty	139	(2)
Creation of Warranties	141	(1)
The Literal Compliance Rule	142	(1)
English Law	142	(1)
American Law	142	(3)
The Consequences of Breach	145	(1)
English Law: The Rule of Automatic Discharge	145	(3)
American Law: Coverage is Suspended and Voidable	148	(2)
Which Rule Is to Be Preferred? Preliminary Considerations	150	(1)
Warranty and Promise	151	(1)
Warranty and Condition	151	(1)
Conclusion: The Voidability Rule	152	(2)
Mitigation Doctrines	154	(1)
Cure of the Breach	154	(1)
Cause	155	(1)
Materiality: Affirmative Versus Promissory Warranties	155	(2)
Judicial Construction	157	(1)
``Held Covered'' Clauses	157	(1)
Waiver	158	(1)
Case Study: The Warranty of Seaworthiness	159	(11)
The Definition of the Duty	160	(1)
Burden of Proof	161	(2)
The Scope of the Duty	163	(1)
English Law	163	(3)
American Law	166	(1)
Time Policies---The ``American'' Rule	167	(3)
Conclusion	170	(2)
Conclusions	172	(7)
Introduction	172	(1)
The Source of the Divergence of the Law	172	(1)
The Causes of Divergence	173	(2)
The Extent of Divergence	175	(1)
The Duty of Utmost Good Faith	176	(1)
Warranties	177	(1)
Restoring Uniformity	178	(1)
Bibliography	179	(6)
Index	185