P&I (CLASS 3) / PART III / RULE 19 RISKS COVERED / 19.20 Legal Costs, Sue and Labour

19.20.1 Legal costs

Legal costs and expenses which a Member may incur in respect of any liability or expenditure against which the Member is insured under these Rules.

19.20.2 Sue and labour

Losses, costs and expenses necessarily incurred by a Member after an incident in order to avoid or reduce a liability or expenditure against which the Member is insured by the Association, even if such losses, costs and expenses would otherwise be excluded by these Rules. Administrative expenses incurred by a Member including the salary or retainer of any employee or third party shall be excluded.

19.20.3 Special direction

Losses, costs and expenses which a Member may be required to incur by special direction of the Association in cases in which the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) decides that it is in the interests of the Association that the direction be given, even if such losses, costs and expenses would otherwise be excluded by these Rules.

19.20.4 PROVIDED ALWAYS THAT:

19.20.4.1 no such losses, costs or expenses shall be recoverable unless either they have been incurred with the prior agreement of the Managers or the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) shall determine that such losses, costs and expenses were reasonably incurred;

19.20.4.2 unless otherwise agreed the costs and expenses incurred under Rule 19.20.1 shall be free of deductible and any losses, costs and expenses incurred under Rules 19.20.2 or 19.20.3 shall bear the same deductible as the liability or expenditure so avoided or reduced would have borne;

19.20.4.3 costs and expenses incurred in respect of a formal enquiry into a casualty involving an Entered Ship shall be recoverable to such extent only as the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) may determine;

19.20.4.4 losses, costs and expenses arising from or related to ransom demands or extortion shall be recoverable only to such extent as the Board may determine.