Abandonment or cargo in United Kingdom

Abandonment or cargo in the Business Encyclopaedia and Legal Adviser

Based on the Business Encyclopaedia and Legal Adviser , by W.S.M. Knight, Barrister –at – Law.

Abandonment of cargo or ship is a term used in marine In the case of constructive loss of the subject of the insurance—i.e. when it has been so far damaged by the perils insured against, that the expense of repairing it would exceed its marketable value when repaired—the assured has the right to abandon to the underwriters all interest on such portions of the subject as may be saved, and claim as for a total loss. This right, to treat a loss as total, must be exercised by an election within a reasonable time. The abandonment, moreover, must be entire and absolute, and where several distinct subjects are insured together—e.g. ship, freight, and cargo, or different kinds of goods—one cannot be abandoned without the other; though if insured separately, they can be abandoned separately. When the insured elects to abandon, she must give notice therefore in writing or verbally; if she fails to do so the loss can be treated only as a partial loss.

The notice should state the grounds for abandonment, in order that the underwriters may determine whether they accept or not. This information should be given without delay, for where the casualty is definite, delays of a number of days have been each held fatal. The notice of abandonment cannot be withdrawn except by consent, though the insured may be deemed to have waived it by subsequent conduct, and so have deprived himself of the right to insist upon it. Wherever there is a valid abandonment, whatever remain of the subject immediately invests in the underwriter, who succeeds to all the rights and remedies of the assured therein, as from the time of the casualty causing the loss. Whatever remains of the subject is called salvage, and losses which give rise to the right of abandonment are called salvage losses. The underwriter is entitled to freight in course of being earned, and which is earned subsequently to the casualty causing the loss; but an under writer on freight only is not entitled to any part therefore. Where the ship carries the owner’s goods, no freight therefore being payable, the underwriter is entitled to reasonable remuneration for their carriage subsequent to the loss. See Adjustment in English LawAdjustment; Average in English Law; Marine Insurance in English Law.