Lloyd's Maritime and Commercial Law Quarterly
BOOK REVIEW - THE INSTITUTE CLAUSES HANDBOOK
THE INSTITUTE CLAUSES HANDBOOK by N.G. Hudson M.A. and J.C. Allen F.C.I.I., Members of the Association of Average Adjusters. Lloyd’s of London Press, London (1986, xv and 217 pp., plus 5 pp. Index). Hardback £28.50.
The interpretation of the new Institute Clauses raises a number of problems. First, while many of their provisions are familiar, and are firmly rooted in the law and practice of the old S.G. form of policy, others are either substantially reworded (see, e.g. the Duty of the Assured Clause in the Cargo Clauses (ICC) and Hulls Clauses (IHC) or are completely new (e.g. the Increased Value Clause in the ICC). Thus, there arise the issues of adapting old doctrines to new words, and the evolution of new bodies of interpretative doctrine. Secondly, in cargo insurance, the old F.P.A. and W.A. Clauses have replaced by the ICC “B” and “C” Clauses, thereby shifting the issue of recovery from the amount of loss covered by the policy to the limit of the risks covered. Thirdly, the new Institute Clauses are drawn up by committees comprised of marine insurance practitioners, who aim to produce standard terms that lay down the customary conditions of insurance cover in a clear and commercially relevant way. The resultant drafting may not satisfy lawyers, who may prefer greater technical precision. Fourthly, the new Clauses are to be used with the new MAR form of policy which, unlike the old S.G. form, contains few substantive provisions and, therefore, cannot act as a guide to interpretation.
Thus, the potential for controversies as to meaning is present in the new Institute Clauses. An authoritative commentary written by practitioners in the industry—as this book is—should, therefore, be of considerable interest to lawyers as a source of information about how practitioners in the industry understand the Clauses and fit them into the framework of marine insurance law. The present book meets this requirement very well.
The work is divided into five parts. It starts with an introduction to the new Clauses, describes their origin in discussions following UNCTAD’s review of the legal and documentary aspects of marine insurance in 1978, and considers the new MAR form of policy, which is reproduced at pp. 4–5. This is followed by four sections of detailed analysis of the Clauses themselves, divided between: marine cargo forms (“A”, “B” and “C” and specialized forms for particular commodities); marine hull forms (the Time and Voyage Clauses, full and restricted cover versions); additional insurances for shipowners (including excess liabilities, disbursements and freight); and war and strikes risks forms (cargo and hull). In each part, the relevant Clauses are discussed in numerical order, with helpful sub-headings grouping related Clauses together. This makes the book easy to follow and to use for a quick reference to particular issues or to individual Clauses. Under each Clause, the relevant words and/or phrases are singled out and their legal interpretation is described and analysed. Where no such authoritative interpretation exists, the authors give clear and helpful analysis of what they believe to be the commercially relevant meaning. Furthermore, they do not shrink from criticism where they feel that the Clause in question does not provide adequate guidance to the parties. This is a major strength of the book, which should help it to become an authoritative guide to interpretation in its own right.
Finally, the book contains a number of valuable features which make it particularly useful as an aid to understanding the Institute Clauses. In particular, a most pleasing feature is the book’s attempt to provide some historical context to the Institute Clauses. Each substantive part begins with an overview of the development of the standard terms in question. These
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