Interpretation And Rectification OF ARPI - Other Rules Of Construction
Many of the rules of construction are simply common sense. For example, a phrase or word must not be taken out of context. In the case of Young v. Sun Alliance and London Insurance [1976] 3 All ER 561, the policy in dispute covered loss or damage caused by "storm, tempest or flood". The claim concerned damage resulting from water seeping into the assured's bathroom from an underground spring. The court decided that the words "storm, tempest and flood" should be read together and thus the policy only covered sudden and abnormal events, not a seepage of water.
The policy must be considered as a whole document. There is a presumption that the draftsperson is competent and that he or she intends a word in one part of the policy to have the same meaning as in another part of the policy. This is perhaps not as clear in insurance contracts which have, over the years, received a good deal of criticism from the courts. Mr Justice Phillips in the Superhulls Case said that insurance contracts had historically demonstrated a lack of consist¬ency and used arcane and technical words. Indeed, they have probably suffered from the fact that many policies have been drafted in a similar way to the contract described by Diplock LJ in Lindsay (W.N.) & Co. v. European Grain and Shipping Agency [1963] 1 Lloyd's Rep 437:
"As is the case with many standard commercial contracts, which have evolved piecemeal over the years, the drafting is not itself consistent, and the nomenclature employed is not uniform. The usual presumption that the same word used throughout the contract has the same meaning is less strong than in the case of a contract drafted at one time by a single draftsman."
Therefore, the use of "patchwork" precedents in the insurance market has probably made this particular rule of construction of litde value.
Another example is that where the parties have added a manuscript note or conditions to standard typed conditions, the manuscript addition will be given more importance by the courts. Non-lawyers would probably assume that typewritten conditions would be given greater weight. The court's reasoning is that the added written words have obviously been given special attention by the parties, whereas often the standard typed policy will pass by with minimal consideration.
On occasions, the wording may refer to other documents by way of incorporation and generally the documents should be read together and, if possible, a literal interpretation by the court will produce a sensible result. On occasions, however, the incorporated document may be inconsistent with the policy wording.
The policy must be considered as a whole document. There is a presumption that the draftsperson is competent and that he or she intends a word in one part of the policy to have the same meaning as in another part of the policy. This is perhaps not as clear in insurance contracts which have, over the years, received a good deal of criticism from the courts. Mr Justice Phillips in the Superhulls Case said that insurance contracts had historically demonstrated a lack of consist¬ency and used arcane and technical words. Indeed, they have probably suffered from the fact that many policies have been drafted in a similar way to the contract described by Diplock LJ in Lindsay (W.N.) & Co. v. European Grain and Shipping Agency [1963] 1 Lloyd's Rep 437:
"As is the case with many standard commercial contracts, which have evolved piecemeal over the years, the drafting is not itself consistent, and the nomenclature employed is not uniform. The usual presumption that the same word used throughout the contract has the same meaning is less strong than in the case of a contract drafted at one time by a single draftsman."
Therefore, the use of "patchwork" precedents in the insurance market has probably made this particular rule of construction of litde value.
Another example is that where the parties have added a manuscript note or conditions to standard typed conditions, the manuscript addition will be given more importance by the courts. Non-lawyers would probably assume that typewritten conditions would be given greater weight. The court's reasoning is that the added written words have obviously been given special attention by the parties, whereas often the standard typed policy will pass by with minimal consideration.
On occasions, the wording may refer to other documents by way of incorporation and generally the documents should be read together and, if possible, a literal interpretation by the court will produce a sensible result. On occasions, however, the incorporated document may be inconsistent with the policy wording.
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