The Italia Express

The plaintiff in this case had been given two ships by his father. One of them, a ro-ro vessel called the Italia Express, was sunk by explosives attached to her hull while undergoing repairs and refurbishment near Piraeus. Until the 37th day of the trial, the plaintiff’s insurance claim was resisted on the ground of wilful misconduct, but then the Lloyd’s underwriters withdrew that defence and accepted liability. Evidently the plaintiff had not enjoyed the eight-and-a-half day’s cross-examination in the High Court in England designed to show that he was a crook. In addition to indemnity and interest, the plaintiff claimed damages: not only for loss of income which would have been earned, if the insurance money had been paid on time, but also for hardship, inconvenience and mental distress. However, although the judge, Hirst, J., made it clear that the plaintiff left the court without a stain on his character, he also left without damages. The judge decided for the underwriters, mainly on the basis that ss. 67 and 68 of the Marine Insurance Act 1906, which provide that the measure of indemnity shall be “the sum fixed by the policy”, are “conclusively definitive of the extent of the liability of the insurer for loss of the vessel under a valued policy”. He was also concerned with the construction of the relevant P. & I. Rules. However, the argument and the judgment went beyond the Act and the Rules and raised important questions of insurance law.

In The Italia Express,1 the judge took the view that the insurer’s obligation was to “prevent” the insured from suffering the loss in question and that this obligation was broken the very moment that the insured did suffer loss; “as soon as the loss has occurred (in the present case by the sinking) the primary obligation is broken,