Miller's Marine War Risks

Michael Davey; James Davey and Oliver Caplin

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CHAPTER 24 War risks and marine insurance legislation

24.1 Most marine insurance legislation applies to war risks policies as it does to other marine policies and, as such, is described throughout this work in the relevant places. This chapter deals with three distinct matters, namely the nature of the legislation and its effect on common law principles; the duty of fair presentation of the risk; and the control of risk management clauses, including insurance warranties.

The Marine Insurance Act 1906: construction and effect on the common law

24.2 The 1906 Act took a very long time to reach the statute book. However, after more than a century as the primary statutory source, it was amended by the Insurance Act 2015 with effect from 12 August 2016. In addition to reforming key aspects of marine insurance law, the 2015 Act established a new procedure for contracting out of those reformulated statutory defaults. The applicable law is determined by the date of the policy. The English courts have not yet had to contend with policies made under the 2015 Act1 although cases have been decided under the corresponding changes to aspects of consumer insurance law under the Consumer Insurance (Disclosure & Representations) Act 2012, which came into force on 6 April 2013.2 The current period is therefore a transitional one, with the majority of disputes arising on the basis of policies agreed under the 1906 Act alone, but with the likelihood of disputes arising under policies issued under the 2015 Act. Which Act applies is of considerable legal significance not only because of the changes made to the substantive rules, but also in the nature of the legislation. 24.3 At the time that the Marine Insurance Bill was first introduced in 1894, moves were afoot to codify the common law and the law merchant that were founded upon the decisions of the judges, sometimes stretching over centuries.3 Codifying Acts had appeared on such matters as partnership, arbitration and sale of goods. The intention in the codification advanced by Sir Mackenzie Chalmers was to produce the existing law in a code contained in an Act of Parliament with as few changes as possible, except in instances where the existing case law had ceased to represent the public perception of what the law

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ought to be. Another feature of the codifying Acts is that it is perfectly permissible to contract out of their provisions. The adoption of the Insurance Act 2015 changes these general principles, at least in those areas now governed by the new statute. First, it provides a specific regime for contracting out of its provisions which is prima facie more restrictive than the approach under the 1906 Act. Second, the 2015 Act was not generally codifying in nature but reforming in that it sought to rebalance certain duties and remedies.

Interpretation of the 1906 Act as a codifying statute

24.4 The Marine Insurance Act 1906 was (in part) a codifying Act. This has an influence on the process of statutory interpretation, although this effect should not be overstated. Bennion states the rules as:

(1) In the first instance, a codifying Act is to be construed in the same way as any other Act, without reference to the earlier legislation or case law.
(2) If, however, real doubt arises as to its legal meaning:
- (a) …
- (b) in so far as the Act constitutes codification (with or without amendment) of common-law rules, relevant case law may be referred to.
(3) Where a common law rule is replaced by an enactment that is not intended to codify the rule, the enactment should be construed without reference to earlier case law.4

24.5 The 1906 Act describes itself in its long title as a codifying Act. As stated in Bennion, the presumptions made about a statute of this kind only apply where there is real doubt as to the meaning of a provision. This is known as Lord Herschell’s rule, after his statement to this end in Bank of England v. Vagliano Bros:

I think the proper course is in the first instance to examine the language of the statute and to ask what is its natural meaning, uninfluenced by any considerations derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view.5

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