REFORMING INSURANCE LAW: - Law Commission

waters, 391 that the classification of offshore platforms was uncertain 392 and that the increasing use
of multimodal transport rendered the distinction between marine and other transport policies
artificial. Its ultimate conclusion was that this change would involve extensive amendment of
both the 1909 and 1984 Acts and fell outside its terms of reference, but that the idea should not
be ruled out for the future. 393 The ALRC summarily dismissed the fusion of all forms of
insurance into a single legal regime: 394 its concern was merely whether particular risks should be
transferred from the general insurance to the marine insurance regime by way of clarification. 395
8.3 The ALRC did make a number of recommendations for the improvement of the marine
insurance legislation, although these were based on the assumption that the 1909 Act retained an
existence separate from the Insurance Contracts Act 1984. The most important of the
recommendations include the following. (1) It should be permissible to hear an action on a
marine contract without the policy being produced, so that s 22 of the 1906 Act should be
repealed. The recommendation is largely irrelevant given that the London Market Principles and
Contract Certainty principles adopted in England in recent years require a timely issue of a
policy, and s 22 has all but been sidestepped by the decision of the Court of Appeal in Eide UK
Ltd v Lowndes Lambert Group Ltd, The Sun Tender. 396 (2) The statutory formalities required of
marine policies – specifying the name of the assured and the signature by the insurers (ss 23 and
24 of the 1906 Act) – should no longer go to validity. (3) The Rules of Construction set out in
schedule to the 1906 Act should be repealed and re-enacted in a new definitions section in the
1906 Act: no change of substance was involved here. Other provisions which might have been
expected to come under scrutiny, in particular the anomalous (and for the most part now
inapplicable) rule in s 16 of the 1906 Act that the measure of indemnity under an unvalued
policy is based on value at the date of inception rather than value immediately prior to the loss,
391 Raptis & Son v South Australia (1977) 138 CLR 356.
392 In England these are insured under marine policies. ALRC 91, para 8.96, recommended that they should not be
covered by the Marine Insurance Act 1906.
393 ALRC 91, paras 3.24-3.34.
394 ALRC 91, paras 3.12-3.23 and 8.50. But note the use of the word “regrettably” in para 8.97 with respect to the
continuation of a dual regime.
395 The differences between the two systems are noted in ALRC 2001, chapter 8. ALRC 91 ultimately
recommended that: (1) all contracts of insurance for the transportation by water of goods other than those being
transported for the purposes of a business, trade, profession or occupation carried on or engaged in by the assured
should be covered by the 1984 Act, consistently with that Act having been amended by the insertion of s 9A to
cover pleasure craft – this recommendation was subsequently adopted in Treasury Review II, 2004, recommendation
1.5; (2) the 1909 Act should be amended to cover air risks incidental to a marine voyage; (3) the 1909 Act should be
amended to refer to losses arising from the repair of a vessel; and (4) the 1909 Act should be extended to inland
waterways, a recommendation which anticipated the decision in Gibbs v Mercantile Mutual Insurance (Australia)
Ltd [2003] HCA 39 – Treasury Review II, 2004, para 1.33 felt that there was no need to change the law in the light
of this ruling and the ALRC’s recommendation. The ALRC found no support for the transfer of cover for small
fishing vessels to the 1984 Act. Treasury Review II’s recommendations have found their way into the draft
Insurance Contracts Amendment Bill 2007. Proposed new s 9A(1A) states that the Marine Insurance Act 1909 does
not apply to a contract of marine insurance which covers water transportation of property that is wholly or
substantially used for personal, domestic or household purposes by the insured, a relative of the insured or any
person with whom the insured resides, thereby bringing such policies within the 1984 Act.
396 [1998] 1 Lloyd’s Rep 389.
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