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The law ofgeneral average is a principle ofmaritime law whereby allstakeholders in a sea venture proportionately share any losses resulting from a voluntary sacrifice of part of the ship orcargo to save the whole in an emergency. For instance, should the crew jettison some cargo overboard to lighten the ship in a storm, the loss would be sharedpro rata by both the carrier[2] and the cargo-owners.
In the exigencies of hazards faced at sea, crew members may have little time in which to determine precisely whose cargo they are jettisoning. Thus, to avoid quarreling that could waste valuable time, there arose the equitable practice whereby all the merchants whose cargo landed safely would be called on to contribute a portion, based upon a share or percentage, to the merchant or merchants whose goods had been tossed overboard to avert imminent peril. General average traces its origins in ancient maritime law, and the principle remains within the admiralty law of most countries.
It is provided by the Lex Rhodia that if merchandise is thrown overboard for the purpose of lightening a ship, the loss is made good by the assessment of all which is made for the benefit of all.
— Julius Paulus,Opinions of Paulus (c. AD 230)[3]
A form of what is now called general average was included in theLex Rhodia, theRhodes Maritime Code ofc. 800 BC.[4]Julius Paulus quoted from the law around the turn of the 3rd century, and these quotes are preserved, and an excerpt is included in Justinian's 6th-centuryDigest of Justinian (part of theCorpus Juris Civilis), although the Lex Rhodia is itself now lost.[3][5]
After the fall of Rome, formal maritime law fell into disuse in Europe (maritime law scholarJean Marie Pardessus suggests that the Digest of Justinian may have been entirely lost until a copy was discovered inAmalfi around 1135), although informal arrangements similar to the basic concept of general average was probably often followed as a practical matter.[5] The medievalRolls of Oléron, probably a collection of judgments from a court inBordeaux, provided (along with much else) guidance on what is now called general average, and was taken as authoritative in many parts of Europe: theLaws of Wisbuy, as well as laws of Flanders, theHanseatic League, Amsterdam, Genoa, and Catalonia, appear to have been copied from the Rolls of Oléron.[5]
An ordinance published by KingLouis XIV of France in 1681 influenced laws in the rest of Europe, with the definition used in the French code followed in similar terms in codes and ordinances promulgated in that century and the next in Hamburg, Prussia, Denmark, Sweden, Spain, Amsterdam, Rotterdam andMiddelburg.[6]
The firstcodification of general average was the York Antwerp Rules[7] of 1890.[4][6] American companies accepted it in 1949. General average requires three elements which are clearly stated by Justice Grier inBarnard v. Adams:
1st. A common danger: a danger in which vessel, cargo and crew all participate; a danger imminent and apparently "inevitable", except by voluntarily incurring the loss of a portion of the whole to save the remainder.
2nd. There must be a voluntary jettison, jactus, or casting away, of some portion of the joint concern for the purpose of avoiding this imminent peril,periculi imminentis evitandi causa, or, in other words, a transfer of the peril from the whole to a particular portion of the whole.
3rd. This attempt to avoid the imminent common peril must be successful.
The York-Antwerp Rules remain in effect, having been modified and updated several times since their 1890 introduction.[6]
The York Antwerp Rules were updated in 1994, 2004 and 2016.[8] A summary of the 2004 changes may be found here:[9][10]
TheHamburg Rules of 1978 provide for general average to apply to relevant costs incurred as a result of attempts to save life or property.[11]
United States law provides for taking the shipowner's fault into account, in contradiction of Rule D of the York–Antwerp Rules. Therefore, aNew Jason Clause is often included in shipping contracts when US law may apply to the contract or trade. Such a clause specifies that shipowners will also be included in the general average even when the loss was caused by negligence of the shipowner or crew.[12][13]
Despite advances in maritime transport technology, the principle continues on occasion to be invoked:
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