Mending Holes: Slip and Policy

AuthorVasiliki Digoni
SSLR Mending holes: slip and policy Vol 1(2)
Mending Holes: Slip and Policy
Vasiliki Digoni
he Marine Insurance Act 1906 carefully distinguishes between a ‘slip’
and a ‘policy’, the borderline of which can be found in s 22. The recent
judgment of HIH Casualty & General Insurance v New Hampshire 1 on
the other hand seems to have created a strong challenge to the statutory
provision. But for now, this statement is just a hypothesis. What is true is that
the decision of the Court of Appeal has muddled the long-held relationship
between a slip and a policy. The following discussion will first examine the two
concepts and will then move on to the relative judgment of HIH and its role in
the issue. Subsequently, the status of s 22 and its impractical (or undesirable)
effect will be self-evident.
The background of the distinction between a slip and a policy
Section 22 states that ‘a contract of marine insurance is inadmissible in
evidence unless embodied in a marine policy’. For the purposes of this
provision, the contract of insurance is formed2 when the insurers initial the
slip which is a summary of the risk, while the policy is the formal expression
of that contract with, if necessary, additional relevant material bearing on the
The formality requirement as enforced was in line with the stamp duty
legislation3, which rendered an unstamped insurance policy ‘null and void’.4
In turn, s 89 of the 1906 Act allowed the court to look at the slip, only if there
was a ‘duly stamped policy’. However, following the abolition of the stamp
duty in 1970, the distinction envisaged in the 1906 Act has become more
conceptual than of legal effect. It can thus be argued that even if back then the
legal distinction could be said to be clear, recent developments ring a bell for a
radical review of the issue.
The judgment in HIH
In his judgment in HIH, Lord Justice Rix argues that there is no binding
authority to preclude one from referring to the slip when construing a policy,
and for this reason it is admissible to have regard to the slip as part of the
‘factual matrix’5 of the policy itself. In developing his argument further, he
submits that the ‘parol evidence rule’, which rejects any (oral) supplementary
1 [2001] EWCA Civ 735 [Hereinafter HIH]
2 General Reinsurance Corp v Forsakringsaktiebolaget Fennia Patria [1982] QB 1022
3 Stamp Act 1795 s 22; Stamp Act 1891 s 93
4 Stamp Act 1795 s 11
5 Per Rix LJ, at 1485

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