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American & British Insurers and Courts As Aiders and Abettors Of ARTICLE AMERICAN & BRITISH INSURERS AND COURTS AS AIDERS AND ABETTORS OF COMMERCIAL TERRORISM WILL RICEt Introduction ...................................................... 3 I. An Overview: "Terrorism" - Competing Definitions, Various Origins, Types and Dimensions ................... 30 A. The Conventional Wisdom Regarding Terrorism and Terrorists .............................................. 30 B. The Transatlantic Slave Trade as a Form of Commercial Terrorism ......... .................. 35 II. Common-Law and Statutory Prohibitions against "Aiding and Abetting" Criminals, Tortfeasors and "Terrorists" .... 40 A. Criminal Liability for Aiding and Abetting ............ 42 B. Civil Liability for Aiding and Abetting ................ 44 III. A Brief Overview: The Evolution of All Risks Marine Insurance and the Regulations of Insurers in Britain and in America during the Transatlantic Slave Trade .......... 47 A. Evolution of "All Risk" Marine Insurance and Its Role in the Transatlantic Slave Trade .................. 48 B. The Regulation of British Insurers during the Transatlantic Slave Trade .............................. 54 t Professor Willy R. Rice is a Professor of Law at St. Mary's University School of Law, where he teaches Contracts and Insurance Law. He holds multiple degrees from several universities: an M.A. and Ph.D. from the University of North Carolina at Chapel Hill; a post-doctoral degree from the Johns Hopkins University; and a Doctor of Jurisprudence from the University of Texas at Austin. Presently he is writing a multi- volume treatise on the influence of insurance contracts as well as English, Spanish and American jurisprudence on the development and longevity of the transatlantic slave trade and its terrorism. THE SCHOLAR [Vol. 6:1 C. The Regulation of American Insurers during the Transatlantic Slave Trade .............................. 63 IV. British and American Insurers as Abiders and Abettors of Commercial Terrorism during the Transatlantic Slave Trade ..................................................... 67 A. Insurers as Abiders and Abettors of Terrorism before the Enactment of 'Anti-Slave Legislation .............. 67 B. American and British Legislative Efforts to End the Terrors of the Transatlantic Slave Trade ............... 72 C. Insurers as Abiders and Abettors of Terrorism after the Enactment of Anti-Slave Trade Legislation ........ 79 V. A Comparative Analysis of British and American Courts' Decisions - "Unclean Hands" Access to Courts and the Unenforceability of Illegal Contracts ...................... 83 A. Settled English and American Common-Law Rules against the Formation of Illegal Commercial C ontracts ............................................. 85 B. Settled English and American Common-Law Rules: Illegal Insurance Contracts and Insurance on Illegal V oyages ............................................... 88 C. Settled English and American Common-Law: "No Legal Action Based on Illegal Contracts" . ............ 90 VI. Access to Courts and Judicial Remedies for Commercial Terrorists and the Insurers Who Aided and Abetted Them during the Transatlantic Slave Trade ....................... 93 A. The Illegality and Immorality of Slavery and Slave Traders' Terrorist Conduct in Britain and America - Before the Enactment of Anti-Slave Trade Acts ....... 94 B. British Courts' Declaratory and Equitable Decisions before the Enactment of the Anti-Slave Trade Act of 1807 ................................................... 99 C. British and American Courts' Declaratory and Equitable Decisions after the Enactment of the Anti- Slave Trade Act of 1807 ............................... 110 V II. Conclusion ................................................ 114 "We will spare no legal means to identify, locate and incapacitate terrorists and those who aid and abet them in their criminal activities."1 U.S. Attorney General John Ashcroft, ca. 2001 1. Jules Crittenden, War on Terrorism:: Arizona Man Indicted for Lying in Terror Probe, BOSTON HERALD, Oct. 13, 2001, at P8, available at 2001 WL 3813541. 2003] AMERICAN & BRITISH INSURERES "If any persons shall.., insure or contract [to insure] any slaves, ... the persons [including] their aiders and abettors shall be ... [impris- oned] for a term not exceeding fourteen years, or ...confined ...to hard labour [for at least] three years. "2 British Parliament, ca. 1824 "[I]t shall be unlawful ...to aid or assist in the carrying away ...as slaves ... inhabitants of Africa ....All insurances ... in respect to 3 any ... [slave] trading ... shall be .. .unlawful." British Parliament, ca. 1807 "[N]o citizen.., shall... trade or traffic in slaves ....Every person [found] aiding or abetting .. .shall pay the sum of two thousand dollars."' U.S. Congress, ca. 1794 "Terror has existed in America for hundreds of years... and slaves quite frequently were killed even though they were innocent."5 * President William Jefferson Clinton, ca. 2001 INTRODUCTION Arguably, before the devastating September 11th attacks on the Penta- gon and the World Trade Center,6 few corporations, small-to-mid-size businesses, or governmental entities truly appreciated the need for terror- While the nation was riveted by the threat of anthrax attacks, federal investigators yester- day threw the book at a man who was questioned in the Sept. 11 terror attacks for lying to them. ... 'This indictment serves as a reminder that the Department of Justice will bring the full weight of the law upon those who attempt to impede or hinder this investigation,' Ashcroft said. Id. 2. The Slave Trade Act, 1824, 5 Geo. 4, c. 113, § 10 (1824) (Eng.). See also Hargrove v. Underwriters at Lloyd's, London, 937 F. Supp. 595, 600 (S.D. Tex. 1996). [T]he Colombia legislature passed the ANTI-ABDUCTION ACT, ACT 40 OF 1993.... Under the Act, any person who - 'knowing that money is going to be destined to pay a ransom for the release of an abducted individual, participates in the transaction thereof' - is con- sidered to have aided and abetted the kidnapper and faces up to five years in prison. Id. 3. An Act for the Abolition of the Slave Trade, 1807, 47 Geo. 3, c. 36, §§ 3, 5. 4. Slave Trade Act of March 22, 1794, ch. 11, §§ 1, 2, 1 Stat. 347, 347-49 (prohibiting carrying on the slave trade from the United States to any foreign place or country). 5. Joseph Curl, Clinton Calls Terror A U.S. Debt to Past: Cites Slavery in Georgetown Speech, WASH. TiMEs, Nov. 8, 2001, at Al, available at 2001 WL 4166154. 6. Michael Grunwald, Terrorists Hijack 4 Airliners, Destroy World Trade Center, Hit Pentagon, Hundreds Dead, Bush Promises Retribution Military Put on Highest Alert, WASH. POST, Sept. 12, 2001, at AL, available at 2001 WL 27731754. There were no reliable estimates last night of how many people were killed in the most devastating terrorist operation in American history. The number was certainly in the hun- dreds and could be in the thousands. It was the most dramatic attack on American soil since Pearl Harbor ....The commandeered jets obliterated the World Trade Center's twin THE SCHOLAR [Vol. 6:1 ism insurance. Also, among those who purchased insurance, probably only a few could fully decipher the highly complex coverage and exclu- sion provisions appearing in their insurance contracts.7 Furthermore, before September 11th, perhaps an even smaller number of ordinary Americans knew that the terrorism insurance industry is huge, spanning both national and international markets. In fact, the in- dustry has an exceedingly long history.8 Also, average consumers proba- bly did not know that property and casualty insurers - those who pitch terrorism insurance - make exceedingly large profits. For example, in 2001, Allstate made $7.2 billion dollars. 9 In addition, Liberty Mutual1" and Axa"1 - major American and French property and casualty insurers, respectively- earned collectively more than $70 billion in profits. Furthermore, several countries operate government- or state-backed insurance pools to cover various sorts of terrorism risks. Essentially, if 110-story towers... and ripped a blazing swath through the Defense Department's impos- ing five-sided fortress .... Id. 7. Without doubt, many commercial terrorism insurance contracts are highly compli- cated, requiring insureds as well as insurers to petition state and federal courts for declara- tory relief. See, e.g., Sherwin-Williams Co. v. Ins. Co. of Pa., 863 F.Supp. 542, 544-547 (N.D. Ohio), affd, 105 F.3d 258 (6th Cir. 1997) (outlining complicated coverage and excep- tion clauses). 8. Cf. Alan Cowell, Lloyd's Expects Claims From Attacks to Top $1.9 Billion, N.Y. Times, Sept. 27, 2001, at W1. "Lloyd's of London, the world's biggest insurance market, said ... that it expected to face $1.92 billion in claims ... related to the [recent] terrorist attacks in the [U.S.], making it the most costly calamity in Lloyd's 320-year history." Id. 9. See Allstate Reports 29% Jump in Profit For Fourth Quarter, WALL ST. J., Feb.8, 2001, at Cll, available at 2001 WL-WSJ 2853711. "Allstate Corporation reported a 29% surge in fourth-quarter net income, citing the success of strategic initiatives to boost profit- ability in the company's core property casualty insurance business." Id. See also Christo- pher Oster, Investigation and Mobilization: AIG Raises Loss Estimate From Attacks To Pretax $800 Million, Plans Charge, WALL ST. J., Oct. 10, 2001, at A6, available at 2001 WL- WSJ 2878061 (stating that "During the same period, AIG disclosed that it had a "net in- come of $1.63 billion on revenue of
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