Lloyd's Maritime and Commercial Law Quarterly
BOOK REVIEW - THE LAW OF SUBROGATION
THE LAW OF SUBROGATION. Charles Mitchell, M.A., Ph.D., Lecturer in Laws, King’s College, London. Clarendon Press, Oxford 1994 xxviii and 177 pp., plus 9 pp. Appendix and 6 pp. Index. Hardback £55.
Books on subrogation are few in number, and modern books are even fewer. Those which have been written are concerned with the operation of subrogation in the context of insurance. This is scarcely surprising, given that insurers are the widest users of subrogation rights and, if Lord Mansfield is to be believed, were daily users of subrogation even in his time. Discussion of the wider aspects of subrogation have been confined to texts on equity and restitution, and there is little agreement between authors as to the doctrinal origins of subrogation in English law or even as to its purposes. Dr Mitchell’s excellent book, based on his Ph.D. thesis., seeks to evolve a general theory of subrogation, drawing together the various situations in which subrogation has been applied and seeking to establish guiding principles. The underlying theme of the book is that subrogation is best regarded as a restitutionary remedy, the result of this analysis being that those features of subrogation which demonstrate some wider purpose come in for criticism.
The starting point is a distinction drawn between “simple” and “reviving” subrogation. The author defines simple subrogation as the common situation—of which insurance is the clearest example—where an insurer (S—the person subrogated) makes payment to the assured (RH—right holder) and then steps into RH’s shoes so that proceedings can be brought against the wrongdoing third party (PL—primarily liable party) in RH’s name. The feature, and indeed the very basis, of simple subrogation is that S’s payment to RH does not extinguish RH’s rights against PL. Reviving subrogation, by contrast, arises where S’s payment to RH does extinguish RH’s claim against PL, so that, if PL is not to be unjustly enriched by S’s action, S must have a right to indemnification against PL—given that RH’s rights against PL have ceased to exist, S’s action against PL insofar as it is based on subrogation must be based on a notional revival of RH’s rights. Dr Mitchell seeks to demonstrate that the cases are inconsistent as to exactly when a payment to RH does or does not discharge PL’s liability to RH, and proposes—in line with the modern academic view—that any payment should operate as an automatic discharge. Insurance subrogation as it is presently regarded would, under this approach, represent the exception rather than the rule.
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