1. Dr Özlem Gürses University of Southampton
The Sue and Labour Clauses – intention to save the subject matter insured
Dr Özlem Gürses
University of Southampton

2. Sue and Labour Expenses in Marine Policies
Marine Insurance Act 1906
S.78(4) “It is the duty of the assured and his agents, in all cases, to take such measures as may be reasonable for the purpose of averting or minimising a loss.”

3. SG Policy
“in case of any loss or misfortune, it should be lawful to the assured, their factors, servants, and assigns, to sue, labour, and travel for, in, and about the defence, safeguard, and recovery of the said goods and merchandises and ship, &c., or any part thereof, without prejudice to that insurance, to the charges whereof the assurers should contribute each one according to the rate and quantity of his sum assured.”

4. ICC 2009 (A,B,C), Cl 16
‘MINIMISING LOSSES Duty of Assured’: “It is the duty of the Assured and their employees and agents in respect of loss recoverable hereunder
16.1 to take such measures as may be reasonable for the purpose of averting or minimising such loss, and
16.2 to ensure that all rights against carriers, bailees or other third parties are properly preserved and exercised and the Insurers will, in addition to any loss recoverable hereunder, reimburse the Assured for any charges properly and reasonably incurred in pursuance of these duties.”

5. Aitchison v Lohre (1879) 4 App. Cas. 755
The sue and labour clause is a wholly independent contract in the policy from the contract to pay a certain sum in respect of damage done to the subject-matter of insurance
It applies, whatever be the amount of such damage, and whether indeed any such damage occur or not.

6. An intention as to benefit the underwriters is not required.
Aitchison v Lohre
An intention as to benefit the underwriters is not required.
The required conditions are
there was a danger of damage to the subject insured by reason of perils insured against, and
unusual or extraordinary efforts made or expenditure incurred in consequence of such efforts made to attempt to prevent such damage
Royal Boskalis Westminster v Mountain [1997] L.R.L.R. 523

7. Kidston v. Empire Insurance Co., (1866) L.R. 1 C.P. 535
Mr. Justice Willes: “There is … a loss or misfortune threatening the safety of the subject- matter of the insurance, and by the operation of which, unless averted by labour, that subject- matter will be imperilled and the underwriters may become liable.”

8. The scope of the policy The Marine Insurance Act 1906 s.78(3) states:
“Expenses incurred for the purpose of averting or diminishing any loss not covered by the policy are not recoverable under the suing and labouring clause.”

9. Loss which is not covered by the policy
The Great Indian Peninsular Railway Company v. Saunders (1862) 2 B. & S. 266
“The expenses that can be recovered under the suing, labouring, and travelling clause are expenses incurred to prevent impending loss within the meaning, of the policy”

10. Loss which is not covered by the policy
Booth v. Gair (1863) 15 C.B. N.S. 291
Kidston v Empire Marine Insurance Co ( ) L.R. 1 C.P. 535

11. All risks policies
Integrated Container Service v British Traders Insurance Co [1981] 2 Lloyd's Rep. 460
“If the assured has established the existence of a threat of loss or damage, no matter if that threat resulted from the insolvency of the lessee, he is entitled to recover monies laid out to avert a loss which might result from a variety of reasons.”

12. Apportionment/average
A ship valued at £5000 is insured for £1000. The ship is stranded, and the owner spends £1000 in trying to get her off, but eventually she is totally lost. The insurer must pay £1000 on the policy, and £200 (i.e. one-fifth) under the suing and labouring clause.

13. Ace European Group & Ors v Standard Life Assurance Limited [2012] EWCA Civ 1713
Averaging or apportionment is a concept having its origin in underinsurance of ship or cargo
An arithmetical apportionment is likely to be difficult if not impossible if the sue and labour expenditure is directed to two objectives which are different in kind.
Apportionment/average does not apply to liability insurance.