HL Deb 23 June 1982 vol 431 cc1117-8

Lord Mottistoneasked Her Majesty's Government:

What arrangements are being made to meet claims for loss or damage arising from hostile action against merchant ships requisitioned or chartered in support of the task force for the Falkland Islands.

The Secretary of State for Trade (Lord Cockfield)

Claims will be met from the Marine and Aviation Insurance (War Risks) Fund which was established under Section 5 of the Marine and Aviation Insurance (War Risks) Act 1952. The balance of the fund is currently £5.25 million. Claims for the loss of the "Atlantic Conveyer" exceed that amount and Parliament's approval will be sought in a Supplementary Estimate to make good the deficit in the fund. In the meantime repayable advances of up to £4.5 million will be made from the Contingencies Fund so that settlement of these claims may be made in the next few days. The Department of Trade's cash limit will be increased by £2,800,000 from £160,750,000 to £163,550,000. This increase will be met from the Contingency Reserve and will not therefore add to total public expenditure.

Lord Boyd-Carpenter asked Her Majesty's Government:

What compensation will be payable by it in respect of the requisitioning of ships for use in the South Atlantic.

Lord Cockfield

Compensation will be payable to shipowners as provided for under Section 4 of the Compensation (Defence) Act 1939 in respect of:

  1. (1) the loss of use of the vessel during the period of requisition. This will be a bare boat charter rate which will include a profit element for the ship owner;
  2. (2) expenses in connection with the running of the vessel in cases where it has been agreed that this service will be provided;
  3. (3) the cost of making good any damage to the vessel;
  4. (4) in a case of a total loss of the vessel, a sum equal to its value immediately before occurence of the damage causing its loss;
  5. (5) expenses reasonably incurred for the purpose of complying with the Requisition Order.

In addition the Government are willing to enter into agreements with shipowners as envisaged in Section 15 of the 1939 Act which will provide for payments to be made in respect of:

  1. (6) any profit which might reasonably have been expected to be earned by the ship during the period of requisition in so far as that profit is not covered by Section 4;
  2. (7) payments in respect of the period of requisition due to third parties, arising from contractual obligations entered into prior to the requisition, directly connected with the operation of the ship, and not covered by Section 4;
  3. (8) other expenses reasonably incurred during the the period of and attributable to the requisition;
  4. (9) loss of profit for a period not exceeding six months after the period of requisition being profit which might, but for the requisition, have reasonably been expected to be earned by the ship;
  5. (10) any other loss suffered by the claimant during a period of not more than six months after the period of requisition if that loss was reasonably foreseeable as a result of the requisition.

The provisions covered in (6)—(10) above are subject to the proviso that no account will be taken of any loss if the claimant has not taken all reasonable steps to avoid or minimise that loss. The period of six months in (9) and (10) above has been chosen as one in which any loss directly resulting from the requisition could be expected to arise. In exceptional circumstances and where loss which is clearly a result of the requisition arises after this perod of six months, the Government will give special consideration to the claim. The Lord Chancellor is taking steps to reconstitute the Shipping Claims Tribunal provided for under the 1939 Act which will be asked to determine disputes.

House adjourned at twenty-six minutes before nine o'clock.