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Jurisprudence impacts marine insurance rulings, argues QC

Contending schools of jurisprudence can have a big impact on decisions in marine insurance cases, says a leading shipping barrister

Some judges stick to the letter of Institute Clause wordings while others take the wider context into account, according to prominent shipping barrister Guy Blackwood

CONTENDING schools of jurisprudence can have a big impact on decisions in marine insurance cases, a leading shipping barrister has argued.

Guy Blackwood QC was speaking at a London International Shipping Week event in London, organised by Quadrant Chambers, where he is based.

In particular, he singled out the ongoing debate between textualist judges, who tend to base rulings entirely on the wording of a law, and contextualists such as Lord Hoffman, who take other factors into account as appropriate.

Mr Blackwood described himself as a “practical lawyer”, and favoured the former approach.

Lord Clarke’s ruling in the Rainy Sky case in 2011, which centred on refund guarantees in shipbuilding, is an example in which the contextualist approach prevailed.

While the words may have been taken to indicate only a partial guarantee, Clarke J held that it was objectively more reasonable that there be a full guarantee.

Mr Blackwood also addressed jurisprudence issues raised by the B Atlantic cocaine smuggling case, in which he acted for the insurer, and accused Hugo Chavez, president of Venezuela in 2007, of wanting to secure control of the vessel on his own behalf.

As a result, proper inspections never took place, and the judiciary was intimidated into refusing to release the vessel, he maintained.

Mr Justice Flaux, at first instance, offered a contextualist interpretation of an important Institute Clauses exclusion, namely the infringement of customs or trading regulations.

The infringement of customs regulations in B Atlantic arose from the insured peril of a malicious act, namely the attempt to smuggle cocaine, and thus should not invalidate cover.

Mr Blackwood countered that the wording should be held to mean exactly what it said. The vessel was detained for a customs infringement; customs infringement is an exclusion; and the exclusion should therefore stand.

Three judges at the Court of Appeal and five judges at the Supreme Court backed Mr Blackwood’s textualist position.

Part of the argument was based on the so-called Wayne Tank Principle, which applied where a casualty has two causes, one covered and one an exception. Traditionally, the insurer can rely on the exception.

Lord Mance ruled: “Here the two potential causes were the malicious act and the seizure and detainment. The malicious act would not have caused the loss without the seizure and detainment. It was the combination of the two that was fatal.

“The seizure and detainment arose from the excluded peril of infringement of customs regulations, and the owner’s claim fails.”

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