Rule 19 Claims, Lawyers, Deductibles and Related Matters

CLAIMS, LAWYERS, DEDUCTIBLES AND RELATED MATTERS

1. 1. Every claim or circumstances which may give rise to a claim in respect of which the Member is or may be insured by the Association shall be notified to the Managers immediately. Without prejudice to the obligation to give such notification, if the Managers are not so notified in writing of a claim or circumstance which may give rise to a claim within one year after the Member has or should have knowledge thereof, or fails to submit a claim in writing to the Managers for reimbursement of any liability, loss, cost or expense within one year after discharging the same, the claim against the Association shall be extinguished and the Association shall be under no further liability in respect thereof, unless the Directors in their discretion shall otherwise determine,
   2. the Member shall promptly notify the Managers of every survey or opportunity to survey in connection with any claim or circumstance which may give rise to a claim,
   3. the Member shall at all times promptly notify the Mangers of any information, documents or reports in his or his agents’ possession, custody, power or knowledge relevant to any claim or circumstances which may give rise to a claim and permit the Managers or their agents to examine and if necessary record or obtain copies of the said information, documents or reports,
   4. the Member shall permit the Managers or their agents to interview any servant, agent, manager or other person who may have been employed by the Member at the material time or at any time thereafter or whom the Managers may consider likely to have any direct or indirect knowledge of the matter or who may have been under a duty at any time to report to the Member in connection therewith.
   5. the Member shall not, without the prior written consent of the Managers, compromise or admit liability for any claim in respect of which he may be insured by the Association,

   6. The Managers shall have the right to control or direct the conduct of any claim or legal or other proceedings relating to any liability, cost or expense in respect of which the Member is or may be insured in whole or in part, and to recommend that the Member settle, compromise or otherwise dispose of such claim or proceedings on such terms as the Managers consider to be appropriate. The Managers shall not proceed to settle any claim or proceedings without the Member’s consent. If the Member refuses to consent to any such recommendation made by the Managers and elects to contest or continue any claim or legal proceedings, the Association’s liability to reimburse the Member shall not exceed the amount for which the claim or legal proceedings could have been settled, plus the costs and expenses incurred with the Manager’s consent up to the date of such refusal.

      Notwithstanding anything else in this Rule 19(1)(f), the consent of the Member shall not be required where the Association has

      1. provided bail, security for costs, deposits or other security on behalf of the Member or
      2. issued certificates, otherwise known as blue cards, furnished as evidence of insurance pursuant to Article VII of the International Convention on Civil Liability for Oil Pollution Damage 1992, Article 7 of the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001, Article 12 of the Nairobi International Convention on the Removal of Wrecks 2007, Article 12 of the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea 2010 or any other convention or law requiring certificates to be furnished as evidence of insurance or
      3. issued certificates furnished as evidence of insurance or financial security in respect of liabilities or obligations under Regulation 2.5, Standard A2.5.2 and Regulation 4.2, Standard A4.2 of the Maritime Labour Convention 2006, as amended.
   7. if the Member commits any breach of his obligations referred to in sub-paragraphs (a) to (f) of this Rule, or if the Member shall willfully or negligently withhold or knowingly conceal any relevant information, document or evidence, or shall make any false statement with a view to obtaining payment of any claim or the support of the Association in any matter, or if the Member shall cause or knowingly permit any other person so to act , the Directors may in their discretion reject in whole or in part any claim by the Member against the Association arising out of the casualty, dispute, event or matter concerned, or reduce the sum payable by the Association in respect thereof by such amount as they may in their discretion determine.
2. 1. Without prejudice to any other provisions of these Rules and without waiving any of the Association’s rights hereunder, the Managers may in their discretion and at any and all times appoint and employ on behalf of a Member upon such terms as they may think fit lawyers, surveyors or other persons ( whether or not lawyers, surveyors or other persons have already been appointed or employed by the Member) for the purpose of dealing with any matter liable to give rise to a claim by the Member upon the Association including, but not limited to, investigating or advising upon any such matter and taking or defending legal or other proceedings in connection therewith. The Managers may in their discretion at any time discontinue such employment as they may think fit.
   2. the cost and expense incurred in connection with a particular matter shall only be recoverable from the Association on condition that all lawyers, surveyors, and other person employed in the case are appointed with the prior consent of or by the Managers,
   3. all lawyers, surveyors and other persons appointed by the Managers on behalf of the Member or appointed by a Member with the prior consent of the Managers shall at all times be and be deemed to be appointed and employed on the terms:
      1. that ( without prejudice to their right to retire from the matter on any other grounds) they shall be entitled to retire from the matter if either the Managers or the Member so requests or if any of them considers that a conflict of interest has arisen or may arise between the Member and the Association so that he ought to retire from the matter;
      2. that they have been instructed by the Member at all times (both while so acting and after having retired from the matter) to give advice and to report to the Managers in connection with the matter without prior reference to the Member;
      3. that they are to produce to the Managers without prior reference to the Member any document or information in their possession or power relating to such matter,
      as if such person had been appointed to act and had at all times been acting on behalf of the Association and not-withstanding that any such advice, reports, documents or information would, as against the Association, otherwise be the subject of legal or any other form of privilege.
3. The Directors shall meet as often as may be required for the settlement of claims which shall be paid by the Association as the Directors may determine in accordance with these Rules, but the Directors may from time to time delegate to the managers the power to agree and to effect payment of claims without prior reference to the Directors. No Director shall act as such in the settlement of any claim in which he is directly or indirectly interested as claimant.
4. Without prejudice to any other provision of these Rules, unless the Member has obtained from the Managers their prior written approval of such cesser or failure, the Directors shall have power in their discretion to reject a claim or reduce the sum payable by the Association in respect thereof if,
   1. the entered ship in respect of which the claim is submitted has ceased, before the incident which gave a rise to the claim, to be fully classed by a classification society approved by the Managers, or
   2. if the Member has failed fully and timeously to comply with all the rules, recommendations and requirements of such society
5. In no circumstances whatsoever shall a Member be entitled to be paid interest on his claim against the Association or to recover any loss of profit or consequential loss from the Association.
6. Claims shall be limited to the amount by which they exceed agreed deductibles, but subject to the agreed limits. Deductibles to be applied to particular claims will be on the basis agreed between the Member and the Association as part of the terms and conditions upon which the entry of the ship is accepted or continued. In the absence of contrary notification from the Association, the deductibles and limits applicable to any particular entry at the end of any policy year shall continue to apply to that entry in the next policy year.