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Lloyd's Maritime and Commercial Law Quarterly

GENERAL AVERAGE—DEFENCES AND “DUE DILIGENCE” DISPUTES

A New Approach Needed

N. Geoffrey Hudson

M.A., Barrister, Member and Past Chairman of the Association of Average Adjusters.

Introductory—the law

Whenever there is a general average, the party sustaining the sacrifice or incurring the expense is entitled to claim a rateable contribution thereto from the other parties to the adventure. But, although a contribution may be “due,” the claimant will be unable to recover it when the situation which occasioned the general average act arose through his own fault1. So, although a general average adjustment may still be required in order to justify and quantify the claim, parties not at fault may deny their liability to pay.
“Fault” means actionable fault, so under English law a shipowner can rely upon the exceptions clause in the contract of carriage to make good his claim when the situation which occasioned the general average act arose from an excepted peril2.
But if the general average situation has arisen as a result of the ship’s unseaworthiness, or since the Carriage of Goods by Sea Act 1924 (COGSA), in consequence of a breach of the (marginally) more limited warranty to exercise due diligence to make the ship seaworthy, then the exceptions provided in the contract of carriage, and the immunities set out in art. 4 of The Hague Rules, will not avail the shipowner.
In the United States, any clause purporting to exempt a carrier from the consequences of his own or his servants’ negligence was, until the Harter Act of 1893, contrary to public policy; since that Act and the U.S. Carriage of Goods by Sea Act 1936, the shipowner is entitled to the benefit of such exemptions provided he has used due diligence to provide a seaworthy ship. So far as general average is concerned, this benefit is not the natural corollary of the statute, and contracts of carriage must include the Jason or New Jason clauses to overcome the effect of The Irrawaddy and to place the shipowner in (approximately) the same position as his counterpart under English law3.

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