The Policy-Slip (Dis)connect
| Author | Karishma A. Galliara |
| Pages | 59-64 |
SSLR The policy-slip (dis)connect Vol 1(2)
59
The Policy-Slip (Dis)connect
Karishma A. Galliara
Introduction
he recently proposed repeal of s 22 of the Marine Insurance Act 1906
(the 1906 Act) which provides for the existence of a formal marine
policy, on grounds of being a ‘technicality with potentially drastic
consequences for the insured’, set out in the Law Commissions’ Issues Paper
9,1 immediately confirms the logical conflict created in one’s mind when
examining the provisions of the 1906 Act. The imminent question as to the
status of the slip and its relationship to the policy presents one with several
fascinating aspects. It is trite law that a slip, once scratched, concludes the
contract of insurance between the assured and the insurer.2 It is also common
knowledge that, in the words of Professor Bennett, ‘fiscal barriers’ 3 to
enforcement of marine insurance contracts exist no longer. Would then, the
quintessential statutory requirement for the existence of a marine policy imply
that a slip is a ‘contract binding in honour’ only? If that be so, then surely any
attempt by either party to unilaterally alter its terms ought not to be
prohibited in law.4 Furthermore, what accelerates the need for a definitive
answer to this question is the fact that actions have been brought on slips,
albeit not in marine insurance;5 the requirement in marine insurance of a
‘marine policy’ thus seems to remain a ‘technical glitch’.
This article seeks to support the Law Commissions’ proposal for reform in this
aspect of marine insurance law by re-examining the ‘then’ and questioning the
‘now’ rationale of s 22 of the 1906 Act and considering the development of
case law on the ever haunting question of the exact relationship between the
slip and the policy.
1 The Law Commission and Scottish Law Commission, Issues Paper 9: The Requirement for a Formal
Marine Policy: Should Section 22 Be Repealed? available at
http://www.lawcom.gov.uk/docs/IP9_web.pdf (last visited 14 November 2010).
2 General Reinsurance Corporation and Others v. Forsakringsaktiebolaget Fennia Patria [1983] 2
affirmed on appeal (1872) LR 7 QB 517; Pindos Shipping Corporation v. Frederick Charles Raven
(The “Mata Hari”) [1983] 2 Lloyd’s Rep 449.
3 Bennett, HN, The Law of Marine Insurance 2nd ed (Oxford, Oxford University Press, 2006) [3.68]
4 But see General Reinsurance Corporation and Others v. Forsakringsaktiebolaget Fennia Patria
[1983] 2 Lloyd’s Rep 287, where the Court of Appeal confirmed that no party to a scratched slip has
the unilateral right to alter its terms.
5 Thompson v. Adams (1889)24 Q.B.D 361: signature of the slip led to a complete contract of insurance
binding in law, on which action could be maintained even in the absence of a signed policy; Burrows v.
Jamaica Private Power Company Co Ltd [2002] Lloyd’s Rep IR 466.
T
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