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under head (1) above would be construed as not including the case of British capture, and that Policies falling under head (c), so far, at all events, as they insured against this particular risk, would be invalid. Assuming that the Law Officers and Mr. Rowlatt express an opinion to this effect, the difficulties of the situation are not entirely disposed of, because the British underwriters and insurance companies may consider (and from the business point of view and the necessity of maintaining their credit for the future may rightly consider) that, notwithstanding that these obligations are not legally binding, they should nevertheless be met. In this connection the Government may have to face a difficult question in view of the possibility that they might adopt the policy of sanctioning payments on all losses occurring to German ships during the war other than losses due to British capture. It may well be that questions of general policy will determine the expediency of the issue of some such general licence. The question might possibly then arise whether such general licence should extend to the case of British capture-which may be used as a short expression for loss due to British belligerent action. For the purpose of considering their recommendation upon this point the Sub-Committee would desire to be advised on a further question of law which seems to arise, viz., Is the illegality (assuming the illegality for the moment) of an insurance of this nature of such a character as can be legalised by any licence on the part of the Crown, or would legislation be necessary for that purpose? It that the Underwriters would meet these losses notwithstanding their illegality, and be that it might be difficult or impossible for the Government effectually to prevent their doing so. Nevertheless, the making of such payments, if illegal, would be subject to obstacles arising possibly from two causes: (1) From such payments being a criminal offence as trading with the enemy; and (2) From the fact that persons occupying a position of a fiduciary nature-such as directors of companies, agents, liquidators, &c.— could not safely make such payments, if they are illegal, as they would be disallowed in their accounts. It may well, therefore, be the case that the Underwriters might hesitate to make these payments notwithstanding their wish to do so, and it is desirable to know whether a licence by the Crown could legalise the payments or not. The question of the criminality of such payments was dealt with in the Law Officers' Opinion of 24th February, 1900, on p. 88 of the printed document No. 2, which accompanies these papers for reference if necessary. There is also a further Paper by Professor Oppenheim as to the position of alien enemies in the Courts of this country during war, which is sent herewith for the convenience of Counsel.

may

The questions upon which the opinion of the Law Officers and Mr. Rowlatt is requested are:-

"

1. Does a Policy upon a German ship including the risks of "men-of-war and "enemies," or in any other way generally including the risks of war, but without specific mention of British capture, extend to the case of British capture in case of a war between England and Germany?

2. Is a Policy to insure a German ship against the risk of British capture in case of war in which England is a belligerent invalid according to the law of this country ?

3. Could payments during war-time of such losses as are detailed in the second question be legalised by the licence of the Crown, if desirable?

II.

OPINION OF THE LAW OFFICERS OF THE CROWN.

The answers to the first two questions are as follows:-

To the first question, no; to the second question, yes.

It is illegal to contract to relieve the enemy from the damage occasioned to his ships by the belligerent action of the British Government, and, if it is illegal to do so expressly, general words cannot be construed so as to make a contract have this effect.

(Furtado v. Rogers, 3 B and p. 191; Kellner v. le Mesurier, 4 East 396, at p. 402).

(Initialled)

R. D. I. J. A. S.

(Signed)

S. A. T. ROWLATT.

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