Resolute insurance decision overturned

01 Feb 2009

In the December 2008/January 2009 issue, World Fishing reported upon the problems posed by the High Court decision in respect of an insurance claim made following the loss of the trawler Resolute (page 23).

The facts of the case are set out in the article, but in summary, the owner’s claim following loss of his vessel by fire in port was declined by his insurers Aigaion Insurance Company SA because the policy contained a warranty provision “warranted owner and/or owner’s experienced skipper on board and in charge at all times and an experienced crew member”. The fire, thought to have been due to an electrical malfunction, occurred whilst the vessel was safely tied up in port, the skipper/owner and crew having gone ashore.

The High Court judge held that the warranty had not been strictly complied with and found in favour of the insurers.

Silas Taylor, consultant with Hull based fishery solicitors, Andrew Jackson, now advises that this decision has, happily, been overturned by the Court of Appeal.

In his leading judgment the Senior Court of Appeal Judge - the Master of the Rolls, Sir Anthony Clarke, held that to make sense of the warranty provision some qualification of the words “at all times” must have been intended. He felt that the purpose behind the provision was to ensure that there were appropriate competent people on board when the vessel was being navigated. Had insurers wanted the crew to be on board at all times even with the vessel laid up in port, then they should have made a specific stipulation to that effect.

One of the other appeal judges pointed out that the policy covered the vessel even when she was aground or being dismantled. It could never have been thought that the vessel would still have to be crewed in such circumstances.

Mr Taylor comments: “The Court of Appeal took a commendably common sense approach to resolving this case. There is a lot of complicated case law relating to insurance warranties but the Court of Appeal took proper account of the practical difficulties faced by those trying to operate their vessels in a sensible and safe way. No doubt the decision will come as a relief to those who had been worried by the original High Court decision.”

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