Sue and Labour Clause in H&M and P&I Insurances – A Comparative Study of Its Practical Operation and Efficiency
Abstract: Section 78(4) of the Marine Insurance Act 1906 (hereinafter referred to as the “MIA 1906”) imposes a duty on the assured “in all cases to take such measures as may be reasonable for the purpose of averting or minimising a loss”. In addition to this statutory duty, under the most widely used H&M (hull and machinery) forms as well as in accordance with the so-called P&I (protection and indemnity) Club Rule-books (hereinafter referred to as the “P&I Club Rules”) the assured is under a corresponding contractual obligation. Notwithstanding the applicability of the MIA 1906 to the H&M insurance policies as well as to the P&I Club Rules subjected to English law, the practical operation of the sue and labour clause utilized by the two types of insurers is not identical. This thesis explores the similarities and differences between the operation of the sue and labour clause in the H&M and P&I insurances, the possibility of ascribing their existence to the nature of the H&M and P&I insurance covers, as well as it analyses the impact of the above mentioned differences on the efficiency of the sue and labour clause in motivating the assured to duly exercise his duty to sue and labour under the particular type of insurance cover.
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