§ MARITIME CONTRACTS considered in Committee.
§ (In the Committee.)
§ THE CHANCELLOR OF THE EXCHEQUER
, in rising to move. That the Chairman be directed to move the House, that leave be given to bring in a Bill to amend the Law relating to Insurances and other Maritime Contracts, said: Sir, the Committee are well aware from the terms of the Queen's Speech that it is the intention of the Government at the very commencement of this Session to invite the attention of Parliament to the question of legislation with respect to Merchant Shipping, and my right hon. Friend the President of the Board of Trade has given Notice that he will this evening move to introduce a Bill upon the subject. But, in the course of the careful consideration which the Government have given to this subject during the Recess, it has appeared to them that any legislation upon 143 this matter would be incomplete unless it extended beyond the subjects which will be included in the Bill which my right hon. Friend has to introduce, and upon that consideration they have come to the conclusion that it would be desirable that two measures should be introduced, independent one of the other, but forming, when taken together, a complete exposition of their views as to the legislation which is required and which is possible at the present time upon this great question. I will not weary the Committee—indeed, I should be trespassing on the province of my right hon. Friend if I were to do so—by going into anything like a general review of the course of legislation with regard to Merchant Shipping of late years. I will only say this much with regard to it. The Committee will bear in mind that for 30 or 40 years the attention of Parliament has been directed at constantly recurring intervals to measures for improving the condition of our Merchant Shipping, and especially for preserving life at sea; that a large code of laws has been created within that time, and that year after year the attention of the public has been called to it. Now the principles upon which the Government and successive Governments have proceeded in this matter seem to have been very much of this character—they have felt that it was the duty of Parliament, as far as possible, to give facilities for the improvement of the Mercantile Marine, and to pass such measures as should enforce the responsibility of shipowners and of those who have the conduct of the great Merchant Service of this country. But they have felt that it was rather in the direction of assisting on the one hand, and of enforcing on the other the duties of shipowners, than to direct intervention on the part of the Government by laying them under the restraints of penal legislation, that satisfactory results were to be looked for. And that certainly is the feeling which animates Her Majesty's present Advisers upon this matter. A great deal has been done in the way of improving the character of masters and mates, of improving the condition of seamen, and other matters with which hon. Gentlemen are familiar. Important measures have been taken for inquiring into the apportionment of the proper punishment in cases where it was required, and moreover, of late years, a new step has been 144 taken in the direction of Government interference which may be shortly described as the initiation of a policy of detention—that is to say, powers have been given to the Government to detain ships when it appears they cannot proceed safely to sea, or when there is any reason to suspect they are at all unsea-worthy. Last Session a measure was proposed which would have carried further that policy; but under circumstances to which I do not advert at any length, that measure was not proceeded with as had been intended, but a temporary measure—a short one—was passed towards the end of the Session, which will expire in the course of the present year. Now, the principles on which the Government propose to legislate this year will be in harmony with those which they professed last year. My right hon. Friend will by-and-by introduce a Bill which will be found in principle similar to the temporary measure which was passed at the close of last Session, but which will be found to meet some of the defects and difficulties which have been experienced in the working of that short temporary Act. But, in addition to that, it is the opinion of the Government that we should take a step further. That will be a step for enforcing more strictly than at present the liability of shipowners and throwing on them more distinctly the duty of taking care that their ships and the lives of their seamen on board of them are properly provided for. As I said before, whatever the Government can do in this matter the Government is attempting to do; but, after all, what the Government can do is as nothing compared with what the shipowners themselves can do. The Government may stop one or two patent leaks or prevent one or two patent evils; but, after all, it cannot take that care—that continuing, that efficient care—which a shipowner is himself liable and bound to take of his vessel; and it is, therefore, to the exertions of the shipowner that we are mainly to look for improvements in this matter. I wish, on the part of the Government, to say that we have approached this subject with an anxious desire to do justly and deal fairly with what may be called both of the parties interested in this controversy, if I may so describe it. We are, above all things, anxious to preserve and protect the valuable lives of our sea- 145 men. We are, on the other hand, anxious to take care that no unnecessary inconvenience is inflicted and no injury is done to that great interest on the prosperity and welfare of which so much of the prosperity of this Kingdom depends. We feel that a natural, a noble, and a generous impulse has led the people of this country to call loudly for the protection of those whose lives are, perhaps, more exposed to danger than the lives of most other classes, and who from various circumstances possess a peculiar interest in the eyes of Englishmen. And it may be that in some of the expressions which have been used and some of the proposals which have been made for the purpose of obtaining that great object something in the nature of injustice has from time to time been done to a body of men as honourable, as desirous to promote the welfare of those dependent on them, and as deserving of the consideration and attention of Parliament as any body of men in this country can possibly be. We have, therefore, been anxious to guard ourselves in what we may do from anything that may appear to reflect unfairly or in any way to be prejudicial to the great body of the shipowners. And, in saying that, I feel that we are not in any sense chargeable with the imputation that we are setting property against life, because not only is the property of the shipowner concerned in this matter and the national welfare greatly concerned, too, but also the interests of the seaman himself are involved in the maintenance of the general prosperity of that great interest in which he ranks as one of the component parts. If you destroy or materially injure the Merchant Service of this country, I need not ask what would be the effect on the merchant seaman. You cannot injure the shipowner without materially damaging and injuring the sailor; and not only is that in a general way the case, but it is also obvious that you may by over-restriction and over-regulation directly defeat your own object, because, inasmuch as you cannot prevent all mischief, if you lay too many restrictions and impose too many burdens on the shipowner he may defend himself by taking less care in those matters where you are not able to reach him. Now, looking at the subject from the simplest point of view, I think we may say that our seamen and all connected with ships would natu- 146 rally have their great protection in the interest the shipowner must have in the preservation of his ship. Naturally, and in the absence of any legislation or of any system which might prevent the operation of that law, there would be a law by which the shipowner is more desirous of preserving his ship than any other person can be, because if his ship is lost he loses that which constitutes his property. But there has long prevailed in this country and elsewhere a system of insurance the effect of which is that if a man partially insures his ship he mitigates his loss; if he wholly insures her he covers his loss; and if he over-insures her it is possible that his loss may even become his gain. Therefore, unless proper attention is paid to this subject, and care is taken to prevent as far as possible the over-insurance of ships, it is possible that a system most excellent in its intentions, most valuable in its working, may be the cause of great abuse and evil. There is another point which I may also mention. Besides the natural interest which the shipowner would have but for the system of insurance in the protection and preservation of his ship, he is under obligation to the shippers who have consigned their cargoes to his care, and he would be responsible to those persons for any loss that might occur. He would, therefore, for the sake of protecting himself against that liability, naturally be anxious to take all possible pains to see that his ship was well found, well navigated, and of such a character as would enable him to accomplish the undertaking into which he has entered. But a practice has, as we know, arisen in many cases in which shipowners have found it possible to contract themselves out of this obligation by the introduction into their bills of lading of stipulations protecting them against losses which may occur to the cargoes committed to their charge. Well, Her Majesty's Government have carefully considered in what way it would be right to deal with these questions, and I wish to say that we have not attempted in any way to set aside the great principles of insurance or to deal on what may be called cardinal and doctrinaire principles with a matter which is of such old standing, which has so many ramifications, and is connected with so many interests. We feel that it would be a very serious thing—in- 147 deed, a very improper thing—rashly and ill any violent manner to tamper with the system of insurance. We do not propose any great radical or revolutionary change in that system. We have not attempted to alter the principles upon which it rests, but we have endeavoured in the measure we shall submit to the Committee to meet certain of the objections which appear to us to be on the face of the case and to be the most easily dealt with. It may be said—"Why do you touch contracts of this kind at all? Why cannot you leave the underwriters and the shipowners to regulate such matters as contracts of insurance in their own way?" Well, we recognize and feel the fact that it is a very serious thing indeed to interfere under any circumstances with full freedom of contract; and where contracts are made between parties who are competent on both sides to enter into them, and where they do not affect the interests and rights of other persons, we feel that it would be wrong and contrary to sound policy to meddle with freedom of contract. But when contracts are of such a nature that the interests of third persons are or may be involved in them, and those persons are not parties to or able to control those contracts, it may and does become the duty of the Legislature, at all events, to protect the rights of those who may suffer as third persons between the two parties. For example, not to speak of other matters less cognate to the present subject, you have in this very instance of Marine Insurance a provision of law that a seaman is unable to insure his wages. A seaman is interested in the wages which he will earn by the voyage in which he engages. It would be natural, considering that he is embarking in a very venturous and risky occupation, that he should be allowed to insure the wages he will receive if the voyage is completed. But the law does not allow Mm to do it, and for this reason—that it is thought if he were to insure his wages, and were sure of getting them whatever might happen to the ship, he would be rendered less careful in the discharge of his duty. And, therefore, for the sake of the interests of the owner of the ship, and also of the persons whose goods are in it, you restrain the seaman from that contract into which he naturally would have every right to enter. Well, if you employ law in this 148 way against the seaman, it may also possibly be a consideration with you whether it would not be right that he in his turn should be protected in the application of that same system of insurance between other persons. I will not, however, detain the Committee by going at any length into theory on this matter. I think I shall best consult its convenience by describing very briefly the provisions of the Bill I am about to ask leave to introduce. It is a very short measure, and its provisions are not so numerous as its clauses. It contains, I think, 12 clauses, of which two or three are merely formal, and others only consequential. It deals with six points. In the first place, it treats of the question of warranty and of those stipulations in bills of lading by which shipowners are able to contract themselves out of their liability to the shippers of cargo. The Bill deals also with another class of interests which is not at present provided for. At the present time, supposing there be no provision in the bill of lading to take the case out of the Common Law of the land, the shipowner is liable for the safety of the cargo, but not for that of passengers. Therefore, in the 4th clause of the Bill, which is the first of any importance, it is provided that—In every contract made after the commencement of this Act for the carriage of goods or persons by sea there shall, by virtue of this Act, be an implied warranty by the shipowner, charterer, or other person contracting, that the ship is seaworthy at the commencement of the voyage to be performed under the contract.This is a novelty, for the passenger, in short, is here put on the same footing as the cargo. Then provision is made for rendering this warranty efficacious—that is to say, for preventing the shipowner from contracting himself out of his liability, for the clause further provides that any contract made after the commencement of the Act contrary to, or inconsistent with, such warranty is to that extent void. Passing over some minor points in the Bill, we come to Clause 8, dealing with the case of valued policies, about which there has been much controversy. In the case of open policies the shipowner insures his ship for such a sum as he thinks right, and in the event of a dispute arising, steps are taken to ascertain the ship's value, in accordance with principles which have been clearly laid down in a series of 149 judicial decisions. We Jo not intend to interfere in that matter, except in some minor particulars which I need not here mention. But, in the ease of valued policies the shipowner and underwriter at the commencement of the contract agree upon a certain sum—which may or may not be the fair and full value of the ship—as the value of the ship in the event of her loss. Well, this is, no doubt, a convenient practice. It saves, I dare say, a great deal of trouble and controversy, and if the valuation is fairly stated it is a practice with which no one would wish to interfere. But, on the other hand, it may be made to cover an excessive and unreasonable over-valuation, and it is perfectly clear that, if a man having a ship worth £10,000 insures her on a valued policy of £20,000, it may be more to his interest to lose her than that she should safely complete her voyage. God forbid that I should impute to shipowners as a class, or, indeed, to any man, that he would deliberately send his ship to sea overvalued in the hope that she maybe lost; but I would point out that this practice of over-valuation exposes shipowners to very great temptation. And not only has it that effect, but it produces on seamen and the public at large an unsatisfactory feeling—namely, that the loss of a ship may be an actual gain to her owner, a feeling which cannot be at all good for the service. It cannot be satisfactory that that which is loss of life and property to a great mass of the population, should be not only no loss but a subject of gain to any one class of that population. It may be said that this over-valuation does not often occur, and that it is exceedingly difficult to say what the true value of a ship is. She may be of more value to one man than to another, or her value may vary according to the service in which she is engaged. In fact, there may be a great many considerations which render it difficult to fix the value of a ship with precision. Yet that difficulty has to be overcome, and is overcome every day by processes with which those who conduct them have become familiar. It may surprise some persons unacquainted with the working of the law in this matter to learn the discrepancy which sometimes comes out between the real value and the estimated value of a ship. There is a case, I suppose of not infrequent oc- 150 currence, which prominently brings out this point. A ship having been seriously damaged, the question arises whether she is to be treated as a total loss. In Courts of Law this case is known as "constructive total loss." The principle of it is this:—If a ship has been so much damaged that it would cost more to repair her than her full value when repaired would be, she is judged to be totally lost, and if the policy is a valued one the underwriter has to pay the total amount for which she was insured. Well, if the ship is partially lost, the owner claims to receive the amount of the valuation, on the ground that she is totally lost. He is asked to prove that she is totally lost, and to do so he proves in the first place what the ship is really-worth, and, secondly, what it would cost to repair her. In this way it sometimes comes out that what it would cost to repair a ship and what the owner proves she is really worth is very far below the amount at which he has valued her, and which he is entitled to recover. Let me just give an illustration of this. Some little time ago a case of constructive total loss was tried in respect of a ship valued at £36,000. The ship had been materially injured, and the owner endeavoured to prove that she was a total loss. With that view he showed that it would cost £15,000 to repair her, and that when repaired she would not be worth more than that sum. If he could make out that the ship was not worth more than £15,000 altogether, what is it to be supposed he would receive for her loss? Not £15,000, her true value, but £36,000, her assumed value. Probably cases of this kind are not numerous, but that they can occur is in itself sufficient evidence of the evil tendency of over-valuation. In the case I have just mentioned the Lord Chief Justice, who was trying it, was so much struck by the discrepancy between the real and the estimated value of the ship, that he adjourned the proceedings in order to give counsel an opportunity of considering what course they would pursue. How are we to deal with this kind of possible over-valuation? It has been suggested by some that we should prohibit valued policies altogether, but that is out of the question; others have recommended that the underwriter should at any time have power to open the valued policy. Well, we do not encourage that. 151 The provision we make is a very guarded, and, I think, a very reasonable one; and I do not know that I could state it better or more clearly than by reading the clause itself—Where, in an action on a contract of insurance on ship or freight made after the commencement of this Act by a Valued policy, it appears to the Court, at any stage of the action, whether application in this behalf is made by the defendant or not, that there is ground to believe that the valuation is unreasonably in excess of the real value of the subject-matter of insurance, the Court may, if it thinks fit, direct an inquiry before referees, on such terms and conditions respecting costs and other matters as to the Court seem just, to ascertain what would have been the value of the interest of the insured, if the policy had boon an open one. If, on the report of the referees, it appears to the Court that the valuation is unreasonably in excess of the real value of the subject-matter of insurance, then the insured shall not be entitled to recover in the action more than the value as ascertained by the referees.It goes upon the principle that the natural kind of policy is the open one, which, as construed by successive decisions, gives to the insurer the amount to which he is fairly entitled as compensation for the loss of his ship, and no more. The valuation policy is a device introduced for the convenience of parties. So far as it is legitimate we have no wish to interfere with it; but if the Court has reason to suppose that it is abused, then it sets it aside, and throws the insurance policy back into the natural position of an open policy. That is the most important and most striking provision in the Bill. The next clause relates to the case of freight. Now, with regard to freight it is, of course, right and necessary for the shipowner to insure, not only the body of the ship, but that which makes the ship valuable—the freight which it has to earn for the voyage in which it is engaged. A man expects when he sends his ship from London to Calcutta, or when he sends it from Calcutta to London, perhaps, with the view of the ship coming back, he expects to make certain profits out of the voyage. At present he may secure the gross amount of the freight which he has to receive, and certain expenses which he may have to incur. If, for instance, he expects to incur expenses to the amount of £500 and make a profit of £500, he will insure for £1,000, and if the voyage is complete he receives that which he is entitled to receive. But it may happen that before the ship has got 152 far on her voyage she may be lost, and he will then be saved a great proportion of the expenses he would have to incur, and yet he would be entitled to receive the total amount at which he valued the gross freight, although not liable to various deductions to which, had the ship reached its destination, the freight would have been subject. "We propose, therefore, to provide against that by the following clause:—Where there is an insurance on freight effected after the commencement of this Act, the insured shall not be entitled to recover in respect of any freight lost without allowing for the proportion of expenses remaining, at the time of the loss, to be incurred in earning such freight. The amount to be so allowed shall be ascertained or estimated as the Court, in any action on the contract, directs.I think that that is a condition naturally equitable, which will commend itself to any one who will take the trouble to consider the point. The next point which it is proposed to deal with is what is called double insurance—or I should rather say, insuring the same thing twice over in different forms, for the term "double insurance" has a different meaning. It is, I believe, understood that when a man insures his ship in the ordinary course he insures not only the ship itself, but also what is known as the outfit—the furniture, I think, is the usual expression; "furniture" being used to cover various items, such as wages of seamen and other charges. But as this outfit might also be reckoned over again in the insurance of freight, it may happen that a man may first of all insure this, and afterwards get it insured over again in his freight. It is obvious that that ought not to be so, and the mode in which we propose to deal with it is to provide that—Where an insurance on freight effected after the commencement of this Act covers cost of wages, outfit, and other charges, and that cost is also insured by any other policy effected by the same person, that cost shall be deemed to be the subject of a double insurance. So much of the cost aforesaid as has hitherto been covered by an open policy on ship shall, in case of a policy upon ship, whether open or valued, effected after the commencement of this Act, be deemed to be covered by that policy, unless expressly excluded thereby.Double insurance means that if a man insures his ship in one office, and then goes and insures it again in another office, he can only recover from one of 153 these offices, and the other office may claim from the office to which he does not apply its contribution towards the amount insured. Suppose a man under the present system insures for £500 in two offices, he could only recover £500 in the whole; but suppose he insures his outfit once under the insurance of the ship, and again under the insurance of freight, he would be able under the present law to recover the sum twice over; but under this provision he will only be able to recover once. There is but one other point to which I need refer, and that is the question of time policies. There are two different policies—voyage policies and time policies. Voyage policies cover a ship from one port to another, and when a ship is insured for voyage only, a warranty is given on the part of the shipowner to the underwriter, that the ship is seaworthy at the commencement of her voyage. But there is another kind of policy which, I believe, is coming very much into use, and that is what is called a time policy. A man insures, not for a particular voyage, but for a particular period of time, generally for a year. That is the outside time for which a man can insure a ship. In the case of insurance by a time policy he is not understood to give any warranty whatever with regard to seaworthiness, and there are good enough reasons for that, because a ship might be in the middle of the ocean, and in that case it would be unreasonable to give a warranty. It is no doubt a harder thing to deal with insurance by time than insurance by voyage, because in the case of a voyage policy we know what upon the whole is likely to be the work the ship will have to perform, and what perils she will have to encounter. In the case of a time policy it is difficult to say what the work may be in the course of a year; therefore the provision we propose to make is this—ThatWhere an insurance on behalf of a shipowner on ship or freight by time is effected after the commencement of this Act, the insured shall not be entitled to recover in respect of any loss occurring, if the loss would not have occurred but for the unseaworthiness of the ship, and that unseaworthiness existed at the time of the ship leaving the port or place of safety (if any) in which she was at the commencement of the risk, or the port or place of safety in which she was last before the commencement of the risk, and could have been 154 prevented by the exercise of reasonable care on. the part of the owner or of the master of the ship, or of any agent of the owner, charged, as such, with the loading of the ship, or with the sending of her to sea from that port or place.There is a further provision thatFor the purposes of this section, unseaworthiness arising from the defective condition of the hull, equipments, or machinery of the ship, or by reason of overloading or improper loading, shall alone be deemed unseaworthiness.I have now endeavoured to explain the objects of the Bill, and I have explained what the proposals are that we have to submit. If we were now for the first time forming a code of Marine Insurance we might probably be inclined to frame somewhat different machinery, but we have kept in view the existing state of things and endeavoured to avoid the introduction of new terms or systems. "We have endeavoured to amend patent and obvious blots, and we hope that the measure which we submit, which is the product of great thought and anxious consideration, however it may meet theoretical objections, will be found of considerable practical advantage in the direction in which we wish to go. I do not know whether hon. Gentlemen wish to discuss the clauses of the Bill; I have no desire to limit discussion, but it may be more advantageous if the Bill is allowed to be printed before there is any general discussion. At the same time the matter is one of so much importance, and affects so many interests that I am anxious no mistake should be made, and that is why I have read the ipsissima verba of the clauses to which I have referred. If there is any point on which I have not made myself clear, I shall be most happy to answer whatever questions may be asked, but knowing that the House is anxious to hear my right hon. Friend, who will cover a large range of the subject, I have to apologize to him for having stood in the way of his more interesting statement. The right hon. Gentleman concluded by moving the Resolution.
§ MR. NORWOOD
said, he had no desire to anticipate the full discussion of the measure that must ensue on the second reading of the Bill; but after its introduction by a speech of considerable length, enunciating the views of the Government on so important a subject, he wished to offer a few observations. He had not a word of disparagement to say with reference to the general tone 155 of the speech of the right hon. Gentleman, or the description he had given of the feeling that animated the Government in approaching the subject, and, speaking for his class, he (Mr. Norwood) could say that it was the desire of the shipping interest, not only to have a final and satisfactory settlement of this large question this Session, but, as far as possible, to work heartily and cordially with the Government in obtaining it. He regretted that the Government had decided upon entering upon so intricate, delicate, and difficult a subject as the alteration of the Law of Marine Insurance—which had been raised, not by statute, but by a series of decisions of past years by able Judges, confirmed by the highest Courts of Appeal, clearly understood and acted upon—without first having a full and complete investigation into the whole of the subject. There were strong and valid reasons why some of the Government propositions should not be carried out. As a member of Lloyd's and of several insurance clubs, he was able to state that the evils resulting from over-valuation were extremely light; not a dozen cases of the kind had come under his observation, and the view taken by the Royal Commission on this part of the subject ought to have some little weight in guiding the decision of Parliament. The Royal Commissioners did not recommend an alteration in the law as to total loss on valued policies, and said it would be unwise and unjust to interfere with contracts between the assured and underwriters, unless our whole system of Marine Insurance were completely revised and amended; and, further, that the revision of such laws was a task of great difficulty, requiring evidence of an exhaustive character, and careful and lengthy investigations, which did not fall within the scope of a Royal Commission. The right hon. Gentleman had not informed the House whether he intended to make any breach of the proposed law punishable by fine and imprisonment; but without it how could he prevent shipowners from joining together for mutual insurance or resorting to honour policies, and was he prepared to prevent, under severe penalty, any shipowner from insuring his vessel abroad, as was done now in Paris, Vienna, and St. Petersburg, and even in Switzerland? There was, then, ex- 156 treme danger in interfering with our present system of Marine Insurance by the machinery described by the right hon. Gentleman, as it might open the door to constant dispute and litigation. The effect would simply be, that instead of going to Lloyd's to insure, shipowners would adopt mutual insurances to a greater extent, and instead of effecting legal policies would enter into honour policies, under which they were more secure than any other form of policy. The right hon. Gentleman did not propose to deal with partial losses and other matters of much interest. He would not then go into details by which he could throw a different aspect on the description and elucidation of the right hen. Gentleman; but with regard to the tone in which he had introduced the subject he had not the slightest objection, and he had shown considerable mastery of a subject of a technical and detailed character. The interference with the law of contract as proposed was an interference that would be strongly objected to not only by shipowners, but by underwriters also, and as a member of Lloyd's he could say that there was a general objection to this interference. The whole of the shipowning body of the country were sincerely desirous to have a settlement of this question upon a broad basis that would satisfy the country, but they seriously objected to a question of such extreme difficulty and danger being opened without a full and complete inquiry, which they thought the importance of the subject deserved. So far as he was personally concerned, he would not take any step until he had perused the Bill; but he was disposed to anticipate it would be the duty of those who represented the shipping interest to move, on the second reading, that it was inexpedient to alter the present law without a full and complete investigation into the whole subject, either by a Royal Commission or a Committee of that House.
§ MR. WATKIN WILLIAMS
congratulated the Government on having resolved to legislate on the important subject before the House, and upon the extreme moderation and caution with which they seemed to have approached it. The shipowners of this country were, he admitted, as a rule, a noble-minded body of men, but then they were not free from 157 the evil to which every other great interest or profession was liable—that the profits which they realized attracted to them a certain number of persons who were unscrupulous and reckless, and who did not care what they did in order to put money in their pockets. Even the profession to which he had the honour to belong included some members whom they were sorry to see amongst them. Those who were experienced in the subject knew perfectly well that there were three great sources of danger to life in the carrying on of the shipping business. In the first place, the practice which had sprung up within the last 15 years, by which the shipowners exonerated themselves from every species of liability to persons who put goods on board their ships, had a tendency to cause recklessness not only on the part of the shipowners, but of the mariners themselves. That was in itself a source of danger, and, having had much to do professionally with that class of bills of lading, he had years ago warned shipowners and shipping companies that the day would come when the Government would interpose and put a stop to this practise of exonerating themselves from responsibility. He was glad the Government had had the courage to deal with the subject of bills of lading. As to valued policies, he thought the matter was too clear for argument, and he could not help thinking that his hon. Friend the Member for Hull (Mr. Norwood) must have prepared his observations with the idea that a Bill of a totally different kind was about to be introduced into the House. Indeed, his objections seemed altogether contradictory, for first of all, the hon. Member seemed to ignore the existence of such things as excessive insurances, and then he said that this Bill would be nugatory, for that the insurers would go to Austria, to Switzerland, to Italy, and elsewhere. What was the meaning of that, if the evil struck at by the clause in question did not exist? He (Mr. Williams) was under the impression, from what he had heard out-of-doors, that the Government was about to introduce a much more violent change in the law, but they seemed to him to have prudently abstained from going the length that some had urged them to do, and had presented to the House a moderate and useful measure. By the Bill valued 158 policies were not forbidden; it was not said that assurers should not recover, but that if it should appear to the tribunal before which the question came to be tried that there were good grounds for believing that there had been an excessive and improper valuation, that tribunal should have the power, not of declaring the insurance to be illegal, but of causing an independent inquiry as to whether there had not been an abuse of this convenient practice, and the consequence would be that the insurer would only recover what amounted to an honest indemnity. He could not conceive any objection to that provision. No honest man would be injured by it. He might remind his hon. Friend that cases of excessive insurance might occur inadvertently, as, for example, the case of the Sir William Eyre, on which an insurance on a valued policy of £15,000 was effected. It was not known at the time to the assured or the underwriters that the ship was practically a wreck. She went on shore at New Zealand, and the injury the ship had received was so great that it had reduced her value so that she was not worth £1,500. She was destroyed by fire, and the assured sought to recover on the policy, not £1,500, but £15,000, and it was held that he was entitled to recover the larger sum. He never could see the sense of that, and he should hail with pleasure any law which would prevent the recovery of the amount insured under such circumstances. He congratulated the Government for the courage which they had shown in introducing that clause, and he hoped they would persevere with their Bill, which, as far his judgment wont, was a moderate and useful measure.
§ MR. E. J. REED
said, he was of opinion that the Government in this measure had gone the shortest possible distance in the way of satisfying public expectation. When the right hon. Gentleman the Chancellor of the Exchequer first gave an intimation of his intention, it was expected that, in order to meet a great public demand, some limitation would be placed on the amount to be allowed to be insured—say three-fourths of the value. If any such limitation had been proposed, he should have objected to it, because he should have regarded it is an undue restriction upon trade and commerce. Every one free from prejudice who had listened to the 159 right hon. Gentleman must have felt that, if he had erred at all, he had proposed a Bill which erred wholly on the side of moderation, and he regretted it did not go far enough in protecting the other classes concerned. He was sorry to hear his hon. Friend the Member for Hull (Mr. Norwood) threaten an opposition to the Bill on the part of the shipowners. The Government would, he feared, experience difficulties from not shaping their measure sufficiently in accordance with the other classes interested. For himself, he objected to hear the honourableness of shipowners so much insisted upon in that House. Parliament, in its legislation, did not assume dishonourableness in any particular class, and the House had no right to be told so often, and its time ought not to be taken up by so many assertions of the honour of the shipowning class, when legislation for that interest was rendered necessary by the conduct of some of them. But, as so much was said about the honour of the shipowners' class, he should take the liberty of mentioning a circumstance which did not speak well for the conduct of certain persons belonging to that body. Last year Parliament passed an Act to compel the shipowners to mark their vessels with a load-line. That was a moderate proposal; yet it was stated the other day by The Times that in one of the Northern ports the shipowners had marked the load-line in a manner, not only to evade the Act, but to bring legislation on the subject into ridicule or inoperativeness. There was an absence of want of proper feeling and a proper sense of honour on the part of certain of the representatives of that class. They were represented in that House by Gentlemen of eminence, and honour, and probity; but they ought to be free to discuss that question like any other, without having it assumed that in shaping their protective legislation they were attacking the honour of the class to be affected by it, and he hoped that in future debates they would hear a little less of it and a little more of sympathy for the other classes concerned. The right hon. Gentleman, in his speech that evening, deprecated the bringing in of any measures on the Opposition side of the House having a tendency to injure the shipping interest.
§ THE CHANCELLOR OF THE EXCHEQUER
I did not say that they were 160 introduced with the intention of injuring the shipping interest, but that they might have that effect.
§ MR. E. J. REED
said, that any measures of the kind alluded to were brought in and supported with the idea, not of injuring, but improving the shipping interest, and the House had heard at a most untimely moment the old threat that the effect would be to drive British trade from being carried on under the British flag. He believed it would be found, on the contrary, that the effect would be to protect and invite trade to stop under the British flag. He was glad the Foreign Office had received assurances from some of the most important of the Governments of Europe that they were quite disposed to go with us in our legislation for the protection of ships and sailors. He hoped that, so far from driving any ships from under the British flag, temperate and careful legislation of this kind would have an opposite effect. He hoped that the Government would not look too much to the shipowning interest of the House, while treating it with all due respect, but would remember that there were others in the country beside shipowners; and, in conclusion would say that, although the clauses of the Bill did not go so far as some might wish, he thought the honourable and moderate efforts of the Government to modify legislation in the direction of promoting the saving of life at sea could be effected without the least injury to any shipowner whatever.
§ SIR ANDREW LUSK
said, there were very few shipowners in the House, and of late very little attention had been paid to them when their interests were under discussion. In bringing the subject forward the Chancellor of the Exchequer had put things in the best light he could. It must be remembered that the Bill went in the direction of unsettling many important matters that had come to be understood; and, having once begun to do that, it would be difficult to know where to end. It would be an incessant annoyance to shipowners if they had to fight disputes with underwriters about value. Many of the shipping laws, like those of the British Constitution, had never been passed by Parliament. In legislating about insurance they would be dealing with men who were quite able to take care of themselves; but the attempt raised the ques- 161 tion of all kinds of insurance, including, he submitted, fire and life, and went on the principle that a man could not properly judge for himself. The hon. Member for Hull (Mr. Norwood) was therefore surely justified in explaining the way in which the measure would affect him and the interest he represented, and he thought the hon. Member for Pembroke (Mr. E. J. Reed) had been a little hard on him. The tendency of the proposed legislation was to throw all the shipping interest into the hands of the great shipowners, and to place difficulties in the way of poor men who, perhaps, owned only one or two ships, and were trying to rise in the world, which would prevent the consummation of their desires.
§ MR. GOSCHEN
, while admitting the propriety of the appeal made by the right hon. Gentleman the Chancellor of the Exchequer that they should discuss the Bill as little as possible now, said, no one could complain that shipowners should rise and state their views, and he would appeal with confidence to the Committee to admit that shipowners need not shrink from stating their views with perfect frankness. Those who represented the land or other interests that were affected by legislation would be heard patiently on every point; and a like indulgence would be granted to shipowners. From inquiries he had made, he found that a large body of underwriters considered that they had no pecuniary interest in the settlement of the question, and they would not be disposed to offer any opposition to legislation which would not lead to litigation. What the underwriters feared more than anything else was the possibility of litigation, and they would desire to oppose the Bill only so far as the changes involved might lead to the hindrances arising from the unnecessary interference of the legal profession. There was one point which would be acceptable to underwriters, and that was the implied warranty which already existed in other cases. He hoped the Bill would be examined mainly with the object of seeing how far it accomplished the object at which it aimed, and whether it would lead to so much litigation as to make it unworkable. The main task of the Government would be to prove that their measure would be effectual, and that it could not be evaded, as it would pro- 162 bably be if it were not very precise. The hon. Member for Hull (Mr. Norwood), for instance, had himself pointed out one danger which might possibly arise when he suggested that honour policies would supersede legal policies. He hoped the Bill would be examined carefully with a disposition to meet the Government, if it could be done without injury to the great interests involved, and with the certainty that saving of life would result from the changes proposed.
§ SIR JOHN LUBBOCK
thought that the hon. Baronet the Member for Finsbury (Sir Andrew Lusk) was on the horns of a dilemma; either excessive valuation was frequent—which he himself did not believe—in which case some such Bill was surely necessary, or it was confined to rare cases of fraud, in which case the Bill would not affect honest shipowners; but, on the contrary, by diminishing marine risk, would tend to benefit them by lowering premiums. As chairman of a Marine Insurance Society, he was not afraid that this portion of the Bill would drive insurance abroad or to clubs, for clubs would not permit excessive overvaluation. It must be remembered that the Bill tended to assimilate the law of marine assurance to that of fire and life, in neither of which overvaluation was permitted. He had made inquiries of two of the principal fire offices as to the danger of litigation, and he was informed that there were very few cases of litigation arising out of overvaluation in fire insurances; still fire insurance offices would be sorry to alter the existing law, for the power of opening the question of valuation had in many instances led to the detection of gross frauds which would otherwise have been successful. He believed such would be the effect of the clause in the present Bill, and that shipowners, instead of being injured, would be benefited by the proposed measure. If fraud were stopped by the Bill the honest shipowner would be the gainer. As regarded the question of freight and the other clauses, the matter required careful consideration, but he could not but hope that on the whole the Bill would prove a valuable measure.
§ THE CHANCELLOR OF THE EXCHEQUER
thanked the Committee for the manner in which they had received the Bill, and said he could assure the hon. Member for Hull (Mr. Norwood) that in 163 what he said at the conclusion of his speech he had no wish to prevent hon. Gentlemen who were interested from making any remarks they pleased. What he was anxious for was that they should, in the first place, go on with the interesting subject which his right hon. Friend the President of the Board of Trade (Sir Charles Adderley) would have to bring forward, and also that hon. Gentlemen should not be in a hurry to commit themselves with regard to this Bill until they had had time to think it over, because he apprehended it was of a character somewhat different from that which many hon. Gentlemen might have expected. It would require some little consideration and study as to the way in which it would work before they could form an opinion of its effect, and how far it met the circumstances of the case. He was as anxious as the hon. Member for Hull that no prejudice should be raised, and that they should consider the Bill calmly and see how far it really would work. In reply to the remark of the hon. Member for Pembroke (Mr. E. J. Reed), that he had said too much of shipowners and too little of another class, he desired to say that he was anxious to avoid raising anything like feeling in this matter, which it was desirable to consider calmly and carefully and without respect to classes; and he was also anxious to say, in reply to other remarks, that the measure was not brought forward in any spirit of hostility to shipowners. He was asked whether it would be effective, and he hoped it would, for it would give the sanction of an Act of Parliament to proper principles, which in this, as in other cases, was in itself a desirable object to accomplish.
§ Motion agreed to.
§ Resolved, That the Chairman he directed to move the House, that leave he given to bring in a Bill to amend the Law relating to Insurances and other Maritime Contracts.
§ Resolution reported:—Bill ordered to he brought in by Mr. RAIKRES, Mr. CHANCELLOR of the EXCHEQUER, and Mr. ATTORNEY GENERAL.
§ Bill presented, and read the first time. [Bill 50.]