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CHARTERERS' LIABILITY INSURANCE / PART V / Clause 2
POWERS OF THE MANAGERS RELATING TO THE HANDLING AND SETTLEMENT OF CLAIMS
2.1 Control of Claims
The Managers shall have the right, if they so decide, to control or direct the conduct of any claim or legal or other proceedings relating to any matter which may result in loss, damage, expense or liability in respect of which the Assured is or may be insured under the Certificate of Insurance and to require the Assured to settle, compromise or otherwise dispose of such claim or proceedings in such manner and on such terms as the Managers see fit.
2.2 Refusal to follow Requirements of Managers
If the Assured does not settle, compromise or dispose of a claim or proceedings in accordance with the requirements of the Managers under Clause 2.1 Control of Claims, any eventual recovery by the Assured in respect of such claim or proceedings from the Association shall be limited to the amount the Assured would have recovered if the Assured had acted as required by the Managers.
2.3 Abandonment
In the event of an insured Ship becoming an actual or constructive total loss, the Association shall, subject to the hull insurers’ rights in the matter, be entitled to request the Assured concerned to abandon the Ship to the Association or to such other person (including the world at large) as the Association shall nominate. If the Assured concerned does not abandon the Ship having received such a request from the Association, the Association shall not be responsible for any claim that could have been avoided had the Assured abandoned the Ship as aforesaid, and the burden of proving that the claim could not have been avoided by such abandonment shall be upon the Assured.
2.4 Appointment of Experts
2.4.1 Without prejudice to any other provision of the Certificate of Insurance and without waiving any of the Association’s rights hereunder, the Managers may at any and all times appoint on behalf of the Assured, on such terms as the Managers may think fit, lawyers, surveyors or other persons with a view to advising the Managers on investigating or dealing with any matter which may result in loss, damage, expense or liability in respect of which the Assured is or may be insured under the Certificate of Insurance, including taking or defending legal or other proceedings in connection therewith. The Managers may also at any time discontinue such employment if they think fit.
2.4.2 All lawyers, surveyors or other persons appointed by the Managers on behalf of the Assured, or appointed by the Assured with the prior consent of the Managers, shall at all times be and be deemed to be appointed and employed on the terms:
2.4.2.1 that they have been instructed by the Assured at all times (both while so acting and after having retired from the matter) to give advice and to report to the Association in connection with the matter without prior reference to the Assured and to produce to the Association without prior reference to the Assured any documents or information in their possession or power relating to such matter, all as if such person had been appointed to act and had at all times been acting on behalf of the Association;
2.4.2.2 that any advice they may give to the Assured is that of an independent contractor employed by the Assured and shall in no way bind the Association.
2.5 Bail
2.5.1 The Association is under no obligation to provide bail or other security on behalf of any Assured, but where the same is provided it shall be on such terms as the Managers may consider appropriate and shall not constitute any admission of liability by the Association for the claim in respect of which the bail or other security is given. In no case shall cash deposits be made by the Association.
2.5.2 It shall be a condition of the provision of bail or other security on behalf of the Assured, that the Assured shall indemnify the Association for any costs associated with the provision of such bail or other security and for any liability the Association may incur to a third party under or in connection with such bail or other security.
Provided always that:
2.5.2.1 the indemnity shall not extend to those amounts that the Assured would have been entitled to recover from the Association under the Certificate of Insurance had the Assured paid them directly.
2.6 Recovery of Costs
Insofar as costs are covered under the Certificate of Insurance, the Association shall be entitled to any sum which the Assured recovers in respect of such costs pursuant to any award, judgment or settlement agreement. If any claims, disputes or proceedings are settled or compromised for a lump sum which includes costs recoverable from any other party, or without any or adequate provision as to the payment of such costs, then in any of those events the Association shall be entitled to recover from the Assured such reasonable sum as the Managers may in their sole discretion determine as being attributable to costs.