Duty of Disclosure in English and Norwegian P&I Contracts

This text analyses the requirements laid down in the contracts of insurance of Norwegian and English P&I clubs. Such a comparative analysis provides an understanding of the convergence and divergence of the rules applied by the selected clubs in the two jurisdictions. There are three basic motivations for a discourse on this topic. Firstly, the detailed understanding of the disclosure requirements provided in this text is of practical importance for a shipowner entering a contract of insurance in one of the clubs. The comparative analysis will explore whether entry with either of the clubs, or in either of the jurisdictions, carries any form of benefit for an assured shipowner. Secondly, an analysis of disclosure requirements is of interests in light of the International Group’s framework of agreements. This framework requires, inter alia, all participating P&I clubs to provide insurance under similar conditions and requirements. This text aims to investigate whether this holds true for the requirements of the duty of disclosure. Thirdly, the text contributes to the discourse on P&I rules applicable in Norway. This is of practical significance due to a rather limited amount of texts dealing with P&I insurance in light of Norwegian and English law. The text is structured into five chapters, which should provide a clear and concise approach to the main issues. In Chapter 2 the text introduces the legal sources applicable in respect of the duty of disclosure in P&I insurance contracts. It is explained that while Norwegian P&I clubs rely on the insurance contract as the main source of law, the English P&I clubs’ contracts are silent on the issue and it is therefore regulated by the pertinent statute. In this part of the text it is discussed what constitutes the relevant background law for the purpose of Norwegian P&I contracts, as this maybe unclear due to an express exclusion of the generally applicable Norwegian Insurance Contracts Act. Chapter 3 provides an introduction and background to the functioning of the P&I insurance market. For this purpose a presentation of the historical development of P&I clubs and of the framework of international co-operation of P&I clubs is given. The background information also includes a presentation of the risks covered by P&I insurance, the standard manner of concluding P&I insurance contracts as well as the parties to the contract. Chapter 4 explores the principal legal issues within the duty of disclosure. In particular it is explained how the different jurisdictions establish what information is subject to disclosure and what legal tests are applied in establishing this. A presentation of some practical examples of information that has to be disclosed by the shipowner also follows for both jurisdictions. An inherent qualification of every duty are remedies available to the innocent party in case of a breach and therefore these are also presented in Chapter 4. Chapter 5 will conclude the discussion and it will be submitted that the regulation of the duty of disclosure is to a large extent convergent, however could be simplified by a direct regulation in the insurance contract of English clubs.