Total losses and the peril of piracy in English law of marine insurance

• Published in: WMU journal of maritime affairs Vol. 11; no. 1; pp. 115 - 128
• Main Author: Gauci, Gotthard
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer-Verlag 01.04.2012
• Subjects: Environmental Law/Policy/Ecojustice; Law; Law and Criminology; Marine & Freshwater Sciences; Offshore Engineering; Public International Law; Marine insurance; UK; Piracy
• ISSN: 1651-436X; 1654-1642
• DOI: 10.1007/s13437-012-0024-3

Whereas the Marine Insurance Act 1906 provides substantial detail about total losses, very little is provided in relation to piracy in the said statute. The recent judgments in Masefield v Amlin by Steel J ([2010] 1Lloyd's Rep. IR 345) and then by the English Court of Appeal ([2011] EWCA Civ 24) have highlighted the difficulties associated with determining whether a seizure of the subject-matter of insurance, in this case cargo, by pirates, demanding a ransom, can give rise to a claim for a total loss. This is a very important matter which also raises issues of legality and public policy. This article examines the implications of this judgment against the backdrop of the English marine insurance definition of piracy and the intricacies of the law relating to constructive and actual total losses. The article concludes with the suggestion that possibly the marine insurance definition of piracy should tally with that in the domain of public international law, and further, that legislative intervention should be considered for the purpose of ascertaining the point in time whether and when seizure by pirates can constitute a total loss.