The shipping industry in one that is inherently laden with risk and was one of the first industries to pioneer methods of risk management. Indeed, the shipping industry was probably one of the first industries to create insurance because of the inherent risks involved in the shipping industry during the 18th century, which saw the birth of the insurance industry. Legal claims are always connected to risk and therefore the notion of risk. This article examines some of the basics of risk management related to legal claims in the shipping industry.
The basic methodology of distributing risk between a large fleet and the operations began in the 15th century around the Venetian empire and then later with Italian city states. Norweigan ship owners were also known to have practices mutual insurance in the times of the vikings. In 1734, the London city underwriters and businessmen had developed a perceptive expertise in marine insurance under the stimulus of a favourable institutional and political milieu.
In contemporary contexts, legal claims in relation to martime losses are continual but we should not forget that Lloyd's records for 1846 to 1850 show no fewer than 12,363 sailing vessels invovlved in disasters, driven ashore, wrecked, foundered, abandoned or lost without trace. Every year 60 ships had sailed to oblivion, never to be heard of again. The increasing number of steamers brought increasing numbers of collisions, which in 1876 numbered 775, 116 more than in the previous year. This led by a decision by the British parliament to create the fatal accidents act, giving new rights to the dependents of persons who lost their life as a result of the wrongful acts of others (or negligence). In 1854, the first Merchant Shipping act was passed by the British parliament. Subsequent legislation aimed at improving the safety of merchant marine operations was introduced. This was the first step to allowing for a legal system which catered for accidents involving shipping accidents. Slowly civic organisations began to develop which assisted in the creation of standards, in the shipping and marine industry. This then led to the creation of mutual shipping insurance associations and cooperatives to speak the risk of marine claims accross a broad community.
