In a liability conscious world indemnities inevitably proliferate and are frequently regarded (often incorrectly) as the answer to every problem.

Before offering an indemnity as a solution to a problem an indemnifyor should consider carefully the wording of the indemnity and the exposure to liability that this precipitates.

Equally the indemnified should bear in mind that an indemnity is only as good as the person giving it and consider the difficulties that he is likely to have enforcing it if need arises.

Overall consideration needs to be given to how the law looks at such matters, particularly regarding enforcement. It has been explained in earlier chapters that the English court will only enforce indemnities in the absence of negligence, unless the indemnity makes it quite clear that it is to operate even in the event of negligence.

It also needs to be borne in mind that the law regards indemnities for the issue of clean bills of lading for discrepant goods as being tantamount to conspiracy between the carrier and the shipper to defraud a consignee who is entitled to rely upon the description of the goods shown on the bill of lading as being accurate at the time of the commencement of carriage.

Accordingly the law would not enforce such indemnities as being illegal contracts and, if the shipper chose not to honor this indemnity, there would be nothing that the carrier could do about it.

Nevertheless indemnities of various types are frequently encountered in shipping and the combined transport industry.

There are indemnities for allowing officers and crew to take their wives to sea, which indemnities are as much to bring vital instructions to the attention of the parties concerned as to act as an indemnity in respect of all medical expenses which the wife may incur and against which the wife is required to take out appropriate insurance. Similar indemnities are usually required from livestock shippers for allowing a handler to travel with any livestock.

This indemnity is usually taken from the employer rather than the employee as, it may not always be enforceable against the employee under the Unfair Contract Terms Act because of the lack of parity in bargaining stature between the livestock handler and the carrier.

However, the most frequently encountered indemnity is that for delivery of goods without production of bill of lading if the goods arrive ahead of the documents or the documents become lost.

Takis Kalogerakos

Marine Underwriter

www.greenwoods.org