UK Club's Annual Report 1969

The UK Club 1869 - 1969

The London of those days was of course a city of tall hats and luxuriant whiskers, of horse cabs, mud, yellow frogs and (for some) shocking poverty, but also of abounding commercial enterprise. The first Atlantic telegraph cable had been laid in 1865, and the initial charge of £10 for 10 words had been reduced enough to make it useful for commerce. The typewriter was invented in 1867. British trade was expanding rapidly – by 30 per cent between 1860 and 1867, and by 30 per cent again between 1867 and 1874. Curiously enough, a "trade gap" of about 25 per cent is shown throughout those periods. There are still complaints about the British trade gap today. Could it be that the figures are wrong somewhere?

Shipping also was changing and expanding. 1869 was the opening of the Suez Canal and the building of the CUTTY SARK. But sail was giving way to steam, and wood to iron. By 1870, five-sixths of the tonnage building was of iron. In that year, too, the tonnage of steamers under construction first exceeded that of sailing vessels. The first "protection associations", insuring shipowners' liabilities on a mutual basis, were mostly for sailing ships, but the United Kingdom (14 years after the first of its rivals) was formed for steam ships: indeed the words "Steam Ship" still appear in its title.

Like its rivals, however, it arose to meet a need. Larger, faster steamdriven ships produced greater dangers and a greater chance of claims by those who suffered from those dangers. Since no other insurance was available, small groups of like-minded shipowners got together to form mutual protection associations, still colloquially called "clubs". They had no legal status as companies. The members entered into a deed to protect each other, and to share the risks of claims in proportion to the tonnage of their ships. Later, a lawsuit showed the undesirability of this, when an action by one of the clubs to recover a call (or supplementary premium) failed when the defaulting shipowner pleaded that the club had no legal status and no right to claim. In 1876 the United Kingdom Association was incorporated as a company.

However, the term "club" was more than a nickname. It showed an attitude of mind. The old minute books record occasions when the Chairman invited the Directors and Managers to dine after a meeting as the "Ship and Turtle" in Leadenhall Street. When the Managers returned the compliment, they suggested, instead, the "London Tavern" in Fenchurch Street. And in 1890 the then Chairman urged that the next meeting be held at his home in Yorkshire.

In recent years, the civilized custom has been revived of some modest refreshment being offered after meetings from time to time. Moreover, with the increasingly international membership of the Association, the Managers travel constantly to other countries, and must acknowledge with gratitude the generous hospitality of many of their shipowner friends right across the five continents of the globe. The real basis of their association is, however, the deeper one of risks shared, troubles faced, and the experience of dealing together with the many problems which face a shipowner from day to day.

THE MEMBERS

The Members, of course, make the Club. They are the Club, and some of them serve as its Directors.

No list of Members at inception survives, but the 1876 list of vessels entered covers 236 ships and a total of 174,861 gross tons. (By 1884 these figures had doubled). The ships on page 1 range from 329 to 1,372 gross tons. Other records indicate that individual fleets were small. The typical member was an individual or partnership owning from one to six ships. They were spread throughout the United Kingdom ports, and a few were registered at Lubeck and St. Petersburg.

They seem to have been much more of a like type than is the case today. The ships entered have diversified as to size and type, at first slowly, then with bewildering variety. Bigger ships were coming, with better performance. The AGAMEMNON shown on page 3 was one of Alfred Holt's three sister-ships, dating from 1865. They could steam non-stop the 8,500 miles from Liverpool to Mauritius, and then on to China. The first "tank oil steamer", the MUREX, was entered in 1888. The Committee decided to make no distinction between her and other types of vessel, provided survey as to cargo worthiness were carried out prior to laden voyages. Now, more than a third of the tonnage entered is tankers. It is an interesting contrast between the CONCH, the Shell tanker which followed close behind the MUREX and is pictured at the top of this page, and the modern Shell tanker MEGARA shown opposite. The forty million gross tons of shipping, or thereabouts, insured by the Club in 1968, include such shipowners as:-

An oil company owning three million tons of tankers;

A firm owning tankers, tramps, and a salvage tug;

Several of the leading French and German liner owners;

All the Jugoslav shipowners in the long distance trades;

The Icelandic Coast Guard;

The operators of some of the most modern container ships in Europe and Japan;

Several governments;

Many small firms or one-man businesses owning one ship each;

A group of a dozen large passenger ships;

Bulk-carrier owners, large and medium sized, in numerous countries.

Even to select these few is invidious, but it gives a hint of the vast variety in size and type. All feel at home in the society of a P&I Club. Most stay there for many years. All (it is hoped) feel that their particular needs are studied, and their particular liabilities adequately insured.

THE DIRECTORS

The Directors are elected by the Members in General Meeting. They must be Members, or officers of Member firms. One-third of the existing Board retire each year and are usually re-elected.

As might be expected, the original "committee" was small, but it expanded rapidly at first. Until 1945, all members were British. Although one was of Greek origin. Prominent owners who had been long in the Club expected to have a representative on the Board, and this tradition still persists to a considerable extent. There have been four generations of Reardon Smiths from Cardiff, three Runcimans from Newcastle-upon-Tyne (and latterly Glasgow), and other long family connections. Sir William Souter was a Director from 1919 until succeeded by his son in 1968.

With the increasingly international nature of the Club, the last twenty years have seen a corresponding transformation of the Board. First came French and German directors from famous liner companies. Subsequently there were also appointed to the Board representatives from other countries including Greece, Italy, Japan and Sweden. By 1968 the Directors representing British flag ships were in a minority in the total of 31. There can be few groups anywhere who together have such a wealth of knowledge of ship management, finance, chartering, marine insurance and everything that makes up the world of shipping.

Pictures of four of the Chairmen are shown in this report. Mention should perhaps specially be made of the first Lord Runciman, Director for 45 years and Chairman for 28 years. Starting as a deck-boy on a sailing vessel, he lived to build up a large fleet of ships, and a remarkable reputation. He was a popular chairman, and some today can recall hearing (at the close of a meeting) the windows of the old boardroom at 24 St. Mary Axe rattle, when other Directors had persuaded "Walter" to sing some of the old sea shanties of the collier brigs, and they pounded the tables to mark the time. His trim white beard and flower buttonhole were as well known in St. Mary Axe as in Pilgrim Street, Newcastle-upon-Tyne. No detail escaped him. One of the present partners of Thos. R Miller & Son remembers being called before him to be told that in the minute-book his fours looked too much like sevens.

Directorship of a P&I Club, although sometimes a shipowner may regard it as a distinction, is no sinecure. There is a substantial amount of work attached, and the general body of Members may not know how, when serious issues for the Club have arisen, the Directors have spent many man-hours in studying and protecting the interests they represent.

THE MANAGERS

The first Managers of the Club were W. Lamplough & Co., a firm of insurance brokers who attended meetings of the Committee which governed the affairs of the Club (it was not yet a company, with a board of directors) and were allowed one vote.

Mr Thomas R Miller joined them as joint manager in 1885. He had been manager of the North of England hull and protecting clubs in Newcastle-upon-Tyne, and also a shipowner himself. In 1894 he took over the sole management of the Club from Messrs Lamplough; he was then joined by his son Harry, who had been articled to the well-known firm of solicitors, Messrs. William A Crump and Son, and together they continued to manage the Club until T R Miller's death in 1916.

The present senior partner, Mr Dawson Miller, started his career in the Royal Nay. He commanded a destroyer in the First World War. In 1919 he left the navy with the rank of Lieutenant Commander, and read for the Bar to equip himself to join his father in the family firm. He has therefore served the Club for just half of its hundred years. By 1924 Harry Miller had virtually handed over control of the firm to him, and he has since helped the Club to grow into the largest and probably the most international P&I Club in the world, including some twenty per cent of all the merchant tonnage afloat.

With this growth, the partnership of Thos R Miller and Son has also grown. Some of the partners have been with the firm since boyhood. Others have been recruited after they had acquired skills in shipping, insurance and law. Mention must specifically be made of Mr G H Vos, who was with the firm all his life and retired in 1946 after fifty years of service. He was internationally known as an authority on charterparties and bills of lading.

The family interest is still maintained. Mr Dawson Miller is supported by his brother Mr Cyril Miller who joined him at the end of the Second World War, and by his nephew Mr Michael Miller.

THE COVER

The earliest Rules of the protecting clubs which have been preserved are on a single sheet of blue paper dated 1874. The cover they gave was under five heads only:-
A. Loss of life or personal injury of any person on board an entered steamer.
B. Loss of life or personal injury on board another ship or vessel.
C. One fourth of loss or damage by collision to another ship or boat.
D. Loss or damage by improper navigation to goods on board or to docks, jetties, or other property.
E. Removal of wreck.

No claim was entertained if the Association's proportion was less than £1. The Committee minutes show a robust attitude towards Members who tried to bring within the cover claims which were not strictly provided for.

For example:-

18th January 1872 – "An Application from Messrs Seater, White & Co., for compensation to the widow of a carpenter killed on board the Penguin, was rejected, upon the grounds that no legal claim could be made by the man in the circumstances, and that the Committee were not authorised to entertain any claim on Charitable grounds."

14th May 1872 – "Mr White" (a member of the Committee) "again personally advocated the settlement of a sum for the Widow of Penguin's carpenter but the Committee could not see it right to settle anything."

20th March 1873 – "Mount Cenis. A claim for damage to Cargo amounting to £503. 13s. 2d. was made by the Owners. The Committee went fully into this case, but it did not appear that there was any proof amongst the documents, that the damage had arisen from the neglect on board the Steamer. There was no clause in the Protecting Rules under which such an amount should be paid. It appeared to be a case of simple sea damage, which should have been recovered under the ordinary policies. Claim rejected accordingly."

17th September 1874 – "Ganges. In this case a Lighter had been impaired by a Cask falling from the Sling in the act of loading or discharging. The Claim was however declined upon the grounds that no Clause of the Protecting Association embraces an accident of this kind."

21st January 1875 – "Fairy. This was a case in which the Owners ask the Committee to pay the Burial Expenses of a seaman abroad. The Committee declined to entertain such a Claim which is not included in the Rules of the Association."

On the other hand, substantial claims were paid by the Club. In June 1876 it was decided (after heavy legal costs had been incurred) to compromise a claim by the Marbella Ore Co. for damage to their pier at Marbella by the "M Moxham". The amount was £17,000, a very large sum in those days. A special Call was made at one shilling per ton, and a circular sent to Members giving full details of the accident.

The names of two well-known average adjusters of the day appear in the minutes for 1876. Mr Manley Hopkins was appointed auditor of the Association, and Mr William Richards was appointed as arbitrator in a dispute with a Member, which was later settled.

As the years went by, the cover given by the Association got wider and wider, partly under pressure from the Members, but more because of the increasing liabilities heaped upon shipowners by the courts and legislators of different countries. The law compelled a shipowner to pay damages to the dependants of a man killed by negligence of the shipowners' servants. Then it became necessary to pay for the hospital, repatriation and burial expenses of seamen discharged abroad sick or injured. (Until then, they were just left on the beach.) Then shipowners were shocked to be made by the courts to pay for the loss or damage to cargo, first in certain rare circumstances, later in other much more common cases. And so it went on. In fact the progress continues today. The day after a statute providing penalties for air pollution became law, a ship in the London docks gave rise to a prosecution for emitting excessive smoke.

To cope with these dangers to a shipowner's trade, more and more insurance cover had to be provided by the shipowners' clubs. Today this Association's cover Rule includes 34 different sections, some of which are very widely worded.

Two features of protecting and indemnity insurance should perhaps be mentioned especially.

First, this is probably the only form of liability insurance in which (as a general rule) unlimited cover is given, as to amount. The Members protect and indemnify each other fully.

Second, there is a provision in the Rules (sometimes called the "Omnibus" clause) whereby a Member can be protected against liability or expense incidental to shipowning which the Directors (not the Managers) decide in their sole discretion should be paid by the Association. This is a right greatly valued by the Members. Only a few such claims are paid each year, a minute fraction of the total claims paid, but a shipowner likes to feel that when he has been in a special difficulty he might (if a group of fellow shipowners so agree) get special protection. Many odd claims have been paid under this Rule. One was the cost of a ship putting into a port of refuge. This would have been allowed in general average if the ship had been on fire, as the master thought. In fact, it was only steam from the cargo, and there was no peril, and no general average. In another case, a London pilot was carried to the West Indies, when the weather was too rough to put him off at the mouth of the Thames, or to send a launch off for him in the Channel. The cost of repatriation was paid under this Rule.

The future will no doubt bring to shipowners liabilities not yet imagined but doubtless the Rules of this and similar Associations will be altered to cope with them.

OFFICES The office of the Association has always been in London, and in that part of the old Roman and medieval city area near to the docks. It was first at Cushion Court, Old Broad Street. This court still exists, although bank premises bar direct access from the street. In 1873 the offices were at 72 Cornhill, but they were so cramped that Committee meetings were held in the Chamber of Shipping office in Whittington Avenue (on the site of the Roman forum). In 1894 there was another move to 8/9 Great St. Helens, in the area where today stand the new tower office buildings of the P&O and the Commercial Union Assurance Company.

In 1911 the Association moved again into St. Mary Axe, where it has been ever since, first in the handsome and historic old Baltic Exchange building, and from 1956 in the adjoining modern annexe. The Baltic can legitimately be described as the centre of the shipping world, and despite rising costs, the Managers have continued to keep their office there for the convenience of the countless shipowners, brokers and agents who have offices in or visit that particular part of the City of London.

It is not easy to visualise the primitive offices of the Club's first days, except perhaps by musing over such novels as those of Dickens and Thackeray. Several of the present staff can, however, recall the office of 40 years ago, with its sloping desks and high stools. Letters were copied in a hand-operated press. Cables were laboriously shortened by the use of elaborate printed codebooks before being carried down to the cable offices. The present claims manager used to meet another boy (later a well known shipowner) every day at the corner of St. Mary Axe to exchange some of the letters they had to deliver and thus shorten the distances to walk. The chief clerk still wore a square-tailed frock coat to the office daily and top hats were worn to funerals of business associates. One or two serious-minded women operated typewriters. The rest of the staff was male.

Today, of course, it is a question of clattering telex and countless telephone calls. The total staff is more than 150 strong, with the sexes evenly divided. They include a number of lawyers and men with sea experience. Where the habit was to assume that business would come to St. Mary Axe, it is now considered a duty for the Managers to see the shipowner Members from time to time in all the main shipping centres, and also fly anywhere at short notice to deal with pressing problems. However, the main bulk of the business must necessarily be done in the London offices, where the partners and staff of Thos. R. Miller & Son look forward to welcoming their friends in the years to come.