About Average - Common ground over the reform of general average

About Average

CO-OPERATION with the insurance industry to find common ground over the reform of general average was advocated recently by the chairman of the Association of Average Adjusters in London, David Pannell. Speaking at the association's annual meeting, Mr Pannell said that, although there had been criticism of general average from some sectors of the industry, it was unlikely to be eliminated from legal systems all over the world.

Am I the only person in the world to find ironic amusement in the fact that there is a perceived lack of common ground among insurers on a measure which owes its very existence to establishing common ground? (No answer necessary).

General average was developed to provide an equitable system to allocate costs which compensate for measures taken at sea to avert or minimise loss. As such, it should be supported, even if it seems a bit unfair on those whose cargo hasn't caused any problems or befallen a terrible accident. Trouble is, worthiness is no guarantee of popularity. In today's monstrously competitive marine insurance industry, which is driven almost entirely by greed, it comes way down the pecking order.

General average has had a bad press over the years. Too lengthy. Too expensive. Too complicated. Subject to abuse. Unnecessary. These are some of the nicer things which have been said about it. Much of that is unfair, but so is life.

David Pannell wants his association, together with average adjusters all over the world, to work with the International Union of Marine Insurance to find "common ground and a way forward whereby the best elements of general average may be retained, while those that are considered anachronistic or unnecessary may be consigned to history". Such an approach, says Mr Pannell, "gives us the best hope of reforming general average to the ultimate benefit of us all."

Those of us who have developed a ridiculous affection for General Average over the years must hope that Mr Pannell is wrong. In fact, I insist that he is wrong. Anybody whose best hope lies with IUMI doesn't get out often enough. Best hopes lodged with IUM are about as unlikely as a dissent in a sole arbitration. IUMI is an annually rotating bunfight which specialises in blunting the edges of some of the best brains in marine insurance. In its long, enjoyable history it has achieved absolutely nothing that could be bound within the pages of an insurance textbook. Long may it continue, but let nobody pin any hopes on it.

I am reliably informed that IUMI has set up a working group to report on reform of general average by 2002. I rest my case.

Well suited

THE Greek shipping community is as well-known in London as it is in Greece. It was fitting, then, that the Greek Shipping Co-operation Committee should hold a reception at the Baltic Exchange in London recently to celebrate Greek shipping in the City. The committee is 63 years old this year and its chairman, John Hadjipateras, is even older and even better-known than that - truly one of the grand men of shipping.

At the Baltic reception, during the course of a short address on behalf of UK shipping, Ince & Co senior partner Richard Sayer contributed a delightful anecdote about the family of his fellow speaker Pandy Embiricos. He explained that Pandy's family came initially from Constantinople before moving to Chios and later to Andros. Pandy is a fifth-generation shipping man, descended from Linardos Embiricos. Pandy tells a story of Linardos's son Constantine, his great grandfather. He became a successful politician, while his brothers went to Romania, where they did rather well as grain merchants.

They invited Costas to visit them. To their horror he arrived wearing his rather peasant-like Andros suit. The brothers insisted Constantine buy himself a new Romanian suit, but he refused because it would have cost him five pounds. He was a little tight with his money, like the rest of the family. The brothers then plotted with another tailor. He was to quote Constantine a lower price, and they would privately pay him the difference. But Constantine wasn't stupid, even if his brothers thought he was. He replied at once, "That's perfect. I'll order ten suits."

Costly business

IN New York, the MLA Arbitration Committee has recently approved recommendations covering the awarding of attorneys fees at arbitration. This is seen by some as a singular development in a city where arbitrators have traditionally had a reputation for failing to award costs to the prevailing party. But consider these statistics.

In 53 per cent of the last one hundred final awards issued by the Society of Maritime Arbitrators in New York, some allowance towards attorneys' fees has been made to the prevailing party. Of these one hundred awards, attorneys' fees were awarded on forty-seven occasions and denied on forty-two occasions, while in eleven cases the panels issued partial final awards deferring a decision concerning fees until the final award was made. And if you look at the last twenty-five awards only, the trend is even more pronounced, with the percentage of final awards in which attorneys' fees were granted up as high as sixty per cent.

So New York is not quite the tyro it has been painted in terms of awarding costs at arbitration. The decision of the MLA and the SMA to publish recommendations is a sensible initiative for those arbitrators who feel they need some helpful hints in this respect. It shouldn't be interpreted as an indication that New York is trying to tell its arbitrators what to do, or how to think. And it shouldn't be seen as an attempt by New York to step into line with London on the awarding of costs at arbitration. London has its own way of handling this issue, and it doesn't issue recommendations. There is justification for both approaches to the awarding of attorneys' fees to survive alongside each other in the conduct of international maritime arbitration. Sadly, the same cannot be said about the publication of arbitration awards, where London continues not to follow where New York and others lead.

Act now

UK government reforms to cut delay and costs in the civil justice system will mean more emphasis being placed on the written word. This in turn will mean that lawyers will have to learn to be less verbose, and oral evidence will decline proportionately.

In what laughingly passes for a career, I have read more words written by both lawyers and freelance journalists than any legal clerk or City editor can have absorbed in a lifetime of proof reading. Lawyers are paid by the hour, and freelance writers by the word. Neither fee base is conducive to good writing. In lawyers, the earnings culture hardly discourages verbosity.

Lawyers as writers have other failings, too, including an unbreakable addiction to footnotes longer than the main body of their work, a fatal attraction for capital letters, and the need to protect their livelihood by inserting in their text references so obscure that only they can possibly shed any light on them. Any move towards making lawyers more focused in their writing must be welcomed with open arms.

It would be sad to think that this emphasis on the written word will mean that less value is placed on the traditional art of advocacy. Such, hopefully, will not be the case, and I am indebted to the London Times for news of a course run by the Inner Temple in London to improve the communications and presentation skills of would-be barristers, using the services of actors from the London Academy of Music and Dramatic Art.

It seems to me richly appropriate that advocates should be learning stage skills as part of their training for the courtroom. The two professions are entirely compatible, and both require hides of rhinoceros proportions, so that cruel comparisons between lawyers and thespians will carry no weight. Samuel Johnson's characterisation of actors as "no better than creatures set upon tables and joint stools to make faces and produce laughter, like dancing dogs is unlikely to upset any lawyer of my acquaintance.

Stepping stones

LONDON in July. England out of the World Cup. Cold front sweeps across Wimbledon. And shipping takes a major step forward, matched by an equally large step backwards.

On one side of London, at IMO, Bill O'Neil was welcoming the fact that eighty-seven per cent of ships were now run by companies which had been approved under the ISM Code. The fact that shipping regulators are now focusing on the way ships are run, rather than on the number of widgets they have to be fitted with, must be a major step forward.

On the other side of London, buried deep in Docklands, the ITF was taking a determined step back into a past which never existed. The launch party of the ITF's floating exhibition and campaign ship had everything, except logic. There was a minister to hang up the Red Ensign, there were vicars galore to bless the ship, there was a brass band and there were hundreds of trade unionists from all over the world. And there was champagne. Very nice, and I shed a nostalgic tear at the sight of hatch tents, something last seen in practical use over twenty-five years ago. Uniformed officers, films of Doxford diesels, and a campaign against foc ships which loses more ground every day. The delicious irony of using an old Bank Line ship to campaign against using low-paid non-national crews was lost on the celebrating crowds. But some of us remembered that Bank Line had UK officers, some of the worst-paid in the business, and Indian ratings, who were paid less than one-tenth of the wage paid to their white counterparts on other UK ships.

It would be a real step forward if the ITF and IMO, and everything else beginning with I', could join forces and campaign against substandard ships. The ITF has got the right idea. It provides lots of work for lawyers, it has got lots of shipowners' money to spend, but it is fighting the wrong battle.

Common market

LAWYERS are obviously falling under the sway of the compelling mantra of the marketing gurus. Swish new newsletters from law firms are springing up at every turn. The latest is from Richards Butler. It is also one of the best I have seen.

This is all very well. In fact, it's fantastic. But law firms still have a lot to learn about marketing. Coincidentally, Mark Chester, the person in charge of business development at Richards Butler in London, who is the first point of contact for media enquiries, has consistently failed to return our telephone calls now for three months or more. What use is a swish newsletter when you have goodwill leaking away like mad at the other end?

On a more general level, lots of London law firms still have a lot to learn about marketing. If you ring and ask for the name of the marketing partner, the switchboard refuses to give you the name. If you ring back and ask to speak to the marketing partner, the switchboard tells you that it is not allowed to put you through unless you have the name of the person you want to speak to. What should you do then? 'Write to the marketing partner,' replies the switchboard.

These people are well-trained in all the wrong principles. Where is the marketing book that says you have to treat people like dirt?

Likes and dislikes

I AM not getting any younger, and the list of things that annoy me is now beginning to assume worrying proportions. The list already includes cats, people who speak in question marks, niches, people who speak in quotation marks, olives, people who speak in cinemas, paradigms, people who pretend they are allergic to cigarette smoke, barbecues, dark cabbage, and individual summer puddings from Tesco. Now I am forced to add to my list people who put their fax numbers before the phone numbers on their headed paper. It is making me deaf.

New format

CREDIT where it's due. I was very critical of the newsletter of the London Maritime Arbitrators Association. It was a terrible piece of old tat. Now it has been remodelled, and it is a thousand per cent better. In fact I rather like it. I don't suppose it was done just to please me, but well done the LMAA anyway.

This just leaves the SMA newsletter in New York, which was much worse to start with and which at times has plumbed lows never before achieved by any other newsletter anywhere in the world. I live in hope that the SMA will eventually see sense.

Worse than its bite

I AM indebted, not for the first time in my life, to Burlingram, the excellent newsletter of New York law firm Burlingham Underwood, which is a continuing source of really useful information.

In a recent issue, Burlingham advises that, "Where the arrest of a boat on a trailer in the owner's backyard was obstructed by the defendant's dog, a Canadian judge allowed the sheriff to serve the warrant by leaving it in the shipowner's mailbox". The warrant that is, not the dog.

Dead and alive

THE suggestion was recently made that Latin be abolished from the language of court proceedings. I'm not so sure. Some legal phrases, like all operas, sound ridiculous when translated into English. Latin may be a dead language, but it has somehow retained its passion beyond the grave. What has happened in the last hundred years to render Latin any more redundant than it was hitherto? Nil, I would suggest.

Far better, I think, to concentrate on abuses visited on English, largely on the grounds that it is a living language. I am, for example, indebted to the business section of the Budapest Sun for news that the rate of the forint's crawling peg devaluation has been lowered by 0.1 per cent. Moreover, smallholders apparently want to scrap the crawling peg in favour of the dirty floating of the forint. Better off dead, I would say.

Managing garbage

IT will not be everybody's idea of news, but you can read in this issue about how all ships worthy of the name now have to carry a garbage management plan. But consider this. On a cruiseship carrying 3,000 passengers and crew, more than seven tonnes of garbage may be generated on a daily basis, including three tonnes of combustible waste, three tonnes of glass and one tonne of wet food waste. Even I can see that this amount of rubbish has to be managed, since at this rate of accumulation it would very quickly sink the ship.