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.
1 Schloss v. Heriot (1863) 14 C.B. (N.S.) 59; Strang Steel & Co. v. Scott (1889) 14 App. Cas. 601.
2 “Negligence for which [the shipowner] is not responsible is as foreign to him as to the party who has suffered by it”, per Sir James Hannen; The Carron Park (1890) 15 P.D. 203.
3 On this subject generally, see Buglass, General Average and the York/Antwerp Rules 1974, pp. 115-119. In The Irrawaddy (171 U.S. 187), the U.S. Supreme Court held that the Harter Act did not confer affimative rights to the shipowner in a case of general average resulting from his servants’ negligence. The Jason Clause was framed to nullify this decision, and is so called after the case in which the clause was held to be valid.
The New Jason Clause was drafted post-COGSA and reads:
“In the event of accident, danger, damage, or disaster, before or after commencement of the voyage resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the Carrier is not responsible by statute, contract or otherwise, the goods, shippers, consignees, or owners of the goods shall contribute with the Carrier in general average to the payment of any sacrifices, losses, or expenses of a general average nature that may be made or incurred, and shall pay salvage and special charges incurred in respect of the goods.”
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