The new Marine Policy and Institute Cargo Clauses have been with us since the beginning of 1982 and the new Institute Hull Clauses have been in operation since 1st October 1983. Last autumn, at the 9th Session of the International Shipping and Legislation Working Group (ISLWG) of UNCTAD in Geneva, the closing stages were reached in drafting international model hull and cargo clauses, which will bear a strong filial resemblance to the new Institute Clauses. The quiet revolution in marine insurance documentation in the London market has been completed. It may therefore be a good moment to review the reasons for this radical change and the intentions of the “reformers”, the draftsmen of the new regime.

That the antiquated phraseology of the Lloyd’s S.G. form was ready for modernization few would deny. It was largely habit, and the evidence that “it worked”, which sustained the S.G. Policy for more than 200 years since it was adopted in 1779. It had not escaped judicial criticism. “Obscure”; “absurd and incoherent”; “incomprehensible”; “tortuous and complex”—all these epithets have been applied to the S.G. form by English judges over the centuries. Even Lord Mansfield, as far back as 1802, was moved to describe it as “a very strange instrument”. As recently as 1982, in the Court of Appeal in the Salem 1 case May, L.J., criticized the ancient wording and deprecated “the mystique which the subject of marine insurance has acquired”. By this time, though the learned Lord Justice appears not to have been aware of it, the process of change, including the abandonment of the S.G. form, had already been embarked upon and had reached an advanced stage.

Criticism had also come from UNCTAD in the form of a vigorous attack on the English regime in the Legal Secretariat Report of November 19782. This was a farranging critique of marine insurance. Inevitably, because it is so widely used, the Report concentrated its fire on the English system and, in particular, the S.G. form of policy. In trenchant language the Legal Secretariat paper, while acknowledging the existence of a fear that change might initiate a flood of litigation, stated:

A few months earlier, in April 1978, the writer had made a suggestion for the modernization of the archaic language of the S.G. Policy. At that time it sounded like an anarchical heresy. The London market, however, embarked on a review of the Institute Cargo Clauses through the agency of the Technical and Clauses Committee. The market also confirmed its resolve to play a full and constructive role in the