The shipowners appealed a decision that the underwriters were not liable under collision liability clause. Their ship had collided with another at Dunkirk when the steering gear failed. Under french law the pilot was not liable since he had not been grossly negligent.
Held: The appeal failed.
Sir Wilfred Greene MR said: ‘the clause does not extend to every pecuniary liability arising in respect of the collision but only to such liabilities as arise by way of damages. The word ‘damages’ is one which to an English lawyer conveys a sufficiently precise meaning. This document is an English contract which falls to be construed according to English law. That does not, of course, mean that in its application to liabilities arising under foreign law (an application which the parties, of course, clearly contemplated as possible) the operation of the clause is to be excluded merely because some liability arising under foreign law as a result of a collision does not precisely coincide with the liability which is recognised in the Courts of this country. Nevertheless it is necessary in my opinion, in construing a document of this kind, to give to the word ‘damages’ its ordinary meaning in English law. ‘Damages’ to an English lawyer imports this idea, that the sums payable by way of damages are sums which fall to be paid by reason of some breach of duty or obligation, whether that duty or obligation is imposed by contract, by the general law, or legislation.
Now, the measure of the duty, of course, will depend upon the particular law. A statute may impose an absolute obligation not to do certain things, and as the result of that the person injured by the doing of such a thing may have a right to damages. That is a question of the measure of the duty. An example which was referred to in the course of the discussion is to be found in the Air Navigation Act, 1920, s.9, sub-s I, under which damages are recoverable from the owner of aircraft who causes damage irrespective of negligence or intention: it is a standard of duty not to do certain things imposed by that statute. Looking at it from another point of view, there are certain classes of liability to make pecuniary payments which clearly fall outside the word ‘damages’. For instance, compensation paid under the Land Clauses Act or a matter of that kind is certainly not damages. Workmen’s compensation payments are certainly not damages in the ordinary sense of the word, and in spite of Mr McNair’s argument to the contrary I find it quite impossible to suppose that workmen’s compensation payments are included in the word ‘damages’ in this clause. The foundation of that class of liability is something entirely different from the foundation of the liability which gives rise to a claim for damages.’
Sir Wilfrid Greene MR
[1939] 1 KB 748
Citing:
Appeal from – Hall Brothers Steamship Company Limited v Young 1938
The insured vessel, Trident, went to Dunkirk and engaged a French pilot whose pilot boat developed a fault in its steering gear which caused her to collide with Trident without Trident being in any way to blame. French law had a provision that . .
Cited by:
Cited – Yorkshire Water Services Ltd v Sun Alliance and London Insurance Plc and Others (1) CA 20-Aug-1996
The court was asked whether the costs of flood alleviation works were recoverable under public liability insurance policies.
Held: A claim for the costs of remedial action taken to mitigate future losses were not covered by the terms of the . .
Cited – Bedfordshire Police Authority v Constable and others ComC 20-Jun-2008
The authority insured its primary liability for compensation under the 1886 Act through the claimants and the excess of liability through re-insurers. The parties sought clarification from the court of the respective liabilities of the insurance . .
Cited – Bedfordshire Police Authority v Constable CA 12-Feb-2009
The police had responded to a riot at Yarlswood detention centre. They had insurance to cover their liability under the 1886 Act, but the re-insurers said that the insurance did not cover the event, saying that the liability was for statutory . .
Lists of cited by and citing cases may be incomplete.
Damages, Insurance
Updated: 23 November 2021; Ref: scu.270262