Have you ever been so curious about something that is not so meaningful, but you just need to know the answer to satisfy your curiosity? I have been on a very nerdy quest for older valuation clauses in property insurance because I challenged a commentator to this blog to not just repeat what others have said about the origin of valuation found in property insurance.
My latest post, The first standard fire policy – did it contain an arbitration clause rather than an assessment clause?, is part of this exercise that only the most nerdy cover nerds would devote their valuable time to studying. If you’ve read this far into this blog, are you one of us?
If this is the case, you will be pleased to know that we have found a clause that is clearly an appraisal clause rather than an arbitration clause, which was recited in a case where the fire occurred in 1882:
The size of the fair values and the damage to the property can be determined by mutual agreement between the company and the insured; or if no agreement is reached, it shall then, at the written request of either party, be determined by a valuation of each personal property or by a detailed valuation of a building, by competent and impartial valuers, one to be selected. of each party, and the two so elected shall first elect a judge to act with them in the event of disagreement; and if the said valuers do not agree, they shall refer the differences to such a judge; and the award of two in writing, under oath, shall be binding and decisive as to the amount of such loss or damage, but shall not decide on the validity of the contract or any other matter other than the amount of such loss or damage.1
The court called it an arbitration clause, but it is not. This clause clearly limits the panel to determining only the amount of “loss or damage”.
A law review article from 1956, Assessments of losses and damages according to insurance,2 was a study of the assessment clause in connection with courts ruling them as possible arbitration provisions. The article said as part of its introduction to rhetoric about assessment versus arbitration:
The assessment as a way of resolving the intended differences has been likened to customary arbitration in different parts and differentiated in others. A significant proportion of judicial decisions have included these comparisons; in others, however, there are no such comparisons. In the latter cases, it is generally assumed that the valuation or agreement thereon is one arbitration or arbitration agreementas the ease can be.
The distribution of the use and usefulness of this way of regulating the differences referred to depends to a large extent on legal decisions concerning the revocation of the assessment provision. Safety doctrines, such as “waiver”, have been developed in these cases. These doctrines have been woven into a maze of technical details where the provision can rarely survive and function. Judicial decisions have also cast shadows over the parties’ right to be heard in the valuation procedure. Some recognize the right, but others have limited or denied it.
Modern arbitration statutes have hardly noticed this way of deciding. Even when such recognition has been indicated, certain legal decisions have been reluctant to allow it. The availability of rights and remedies in the arbitration statutes is questionable. In a few jurisdictions, laws repeal these assessment provisions and invalidate procedures under them.
That’s enough for today’s post on this issue. But we have revealed a complete 18th century assessment clause that Bob Norton gave us, which I will write about shortly.
We are not creators of history. We are created by history.
– Martin Luther King, Jr.
1 Uhrig v. Williamsburg City Fire Ins. Co.101 NY 362, 4 NE 745 (1886).
2 Wesley A. Sturges and William W. Sturges, Assessments of losses and damages according to insurance11 U. Miami L. Rev. 1 (1956) Available at: https://repository.law.miami.edu/umlr/vol11/iss1/5