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Elizabeth Blackburn QC co-authors article on joint insurance issues in Lloyd's Maritime and Commercial Quarterly

Elizabeth Blackburn QC has co-authored an article with Andrew Dinsmore titled “Joint Insurance Issues in The Ocean Victory: The Roads Not Taken” in the February edition of the Lloyd’s Maritime and Commercial Quarterly, (2018) L.M.L.C.Q 50.

The paper analyses the obiter decision of the Supreme Court on the joint insurance issues which arose between the insurers of co-insured head and demise charterers and a third party sub-charterer, in particular Lord Sumption’s reasoning in his dissenting judgment, and goes on to discuss whether a term should be implied in the co-insureds’ contract that the relevant claims are to be treated as excluded if they have been covered by appropriate insurance and they remain excluded for so long as the insurance remains in place unless and until a payment is made by an insurer whereby any and all payments from an insurer to one co-insured entirely satisfies any and all obligations of the other co-insured inter se regardless of whether the loss suffered by the payee is greater than the payment, unless the co-insured is guilty of wilful misconduct.

The paper then deals with three points which were also not argued before the Supreme Court, namely (i) the demise charterers’ potential claims based on possessory title; (ii) the possible application of the “transferred loss principle” as developed in The Albazero, Linden Gardens v Lenesta, Darlington v Wiltshier and Alfred McAlpine v Panatown; and (iii) the possible application of the “performance interest principle” as initially developed by Lord Griffiths as his “broader ground” in Linden Gardens, and discussed in Panatown and the recent decision of the Supreme Court in Swynson v Lowick Rose.

The paper concludes that, if such facts arise in future, whilst the above implied term approach is preferable to the approach adopted by Lord Sumption, insurers would be best advised to advance a subrogated claim based on the demise charterer’s possessory claim in contract as their primary case.

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