Narcotics

“InterClub Agreement” whereby a clause is often inserted into Time Charter parties which states that liability for cargo claims is to be shared between the shipowner and the time charterer. The exact proportion to be borne by each party depending upon the circumstances giving rise to the claim. This is another area in which the Clubs have been active on their members’ behalf in the past year or so.  In particular, the provisions of the US Anti Drug Abuse Act placed very onerous responsibilities onto shipowners trading to the United States, and the Clubs were quick to respond with advice and support for their members.  Shipping companies were urged by their Clubs to enter into a “Carrier Initiative Agreement” with US Customs, while Club Rules were quickly re-drafted to ensure that adequate cover was available for all members.  This is a good example of the flexibility inherent in the mutual system, where insured and insurer are one and the same and share a common interest. Many P & I Clubs offer defence cover to owners as a separate class of insurance running parallel to P & I cover.  Defence (sometimes called “Freight, Demurrage and Defence”) cover is in respect of legal costs incurred by the shipowner in defending claims or bringing actions against other parties.  Again the defence cover is arranged on a mutual basis and the same principles of mutuality apply as mentioned at the beginning of this lesson. Legal costs arising out of P & I claims (i.e those covered by the Rules) are paid by the Club in any case, but Defence cover as a separate entity comes into play in “commercial” situations where P & I Rules do not apply. Nevertheless, there are sometimes “grey areas” in which Club support is usually available. Examples of areas where defence cover can be applied include charter party disputes, claims against contractors such as stevedores or ship repairers, claims against ship builders for vessels failing to meet specifications, and many others.  When handling defence claims, the Clubs reserve the right to appoint, or at any rate approve, the appointment of lawyers and other experts acting on behalf of the member.  As matters of principle are frequently involved, defence claims are almost invariably considered individually by the Club Board of Directors at each stage of the case as it progresses.