Amendments to LMA Model Clauses

The LMA, on behalf of its members, publishes LMA (and previously NMA and LSW) referenced clauses as model clauses. These clauses are purely illustrative and are published and distributed for the guidance of Lloyd’s managing agents, brokers and other market participants. All contracting parties are free to agree to different conditions/amend the model clauses as they see fit; the LMA does not protect its intellectual property rights over model clauses. It is for underwriters to decide whether or not any contractual language is acceptable on any given risk.

Where an LMA model clause is changed to align with the requirements of the contracting parties, it is no longer the model clause and should not be represented as such. It is currently common practice in the market to change LMA model clauses and highlight this to contracting parties using the words “amended” after the reference, e.g. “LMA5503 (amended)”.

We have increasingly been made aware of examples in which clauses represented as “LMAxxxx (amended)” include changes that fundamentally alter the clause. In such circumstances it is potentially misleading to represent such clauses simply as amendments to the published model clause. This position is exacerbated where amendments are not signposted or supported by a rationale. The LMA does not consider this approach to be of benefit to any of the contracting parties.

Following discussion with the IUA, LMA Non-Marine Committee and the LMA Wordings Steering Group, the LMA has decided to clarify that the model clause reference should not be used when the published version of the model clause has been amended. Where amendments are made to the text of a published model clause, a new reference should be assigned. Where comparison to the relevant model clause would be beneficial as part of a negotiation (e.g. to efficiently highlight a proposed change in coverage) we remain comfortable for model clauses to be cited as a reference point in discussions (e.g. “Broker1234 based on LMA1234”), but the original model clause reference should be removed from the amended clause used in the contract.

Please note, where a clause contains a blank field or otherwise indicates changes are permitted or required, we do not consider completion of the blank field or change in the permitted/required area to be an amendment for the purpose of this bulletin.

David Powell
Head of Technical Underwriting