ABSTRACT
The doctrine of the warranty of legality in English maritime law originates from the eighteenth century and has influenced the jurisdictions of many Commonwealth countries which have developed their own marine insurance law with reference to English law, such as Australia, New Zealand, and Canada. In English law, as codified in section 41 of the Marine Insurance Act 1906: “There is an implied warranty that the adventure insured is a lawful one, and that, so far as the assured can control the matter, the adventure shall be carried out in a lawful manner”. 1 The legality issue in marine insurance law is quite a difficult one. From the perspective of the consequence of a violation of this law, the effect of such a breach is somewhat controversial and harsh on the assured. On the one hand, since this section is an implied warranty, it requires the strict compliance of the assured, and the breach of such a warranty according to English law entitles the insurer to discharge his liability automatically from the time of such a breach with no regard to materiality and causation. On the other hand, the boundaries of the concept “lawful” in this section – which may cover not only statute and common law, but also technical rules and regulations, which in most circumstances are unfamiliar to the assured – are very wide. It is clear that, on the face of it, this section gives the insurer too much power and it is very difficult to balance the interests of the assured and the insurer.
