The Law of Salvage

The Law of Salvage

Many of us have heard about the law of salvage which is embedded into maritime law – but what does it mean and what considerations are there for sailors? The law of salvage allows that a person who recovers another person’s ship/cargo in peril or lost at sea is entitled to a reward commensurate with the value of the property saved. The law is a convention that dates back many centuries – to Roman times and beyond. It is made upon the premise that a vessel in trouble will often carry cargo worth as much or more than the ship itself. Thus the principle of salvage law is that honest men who risk their own lives and their vessels trying to save vessels in distress should be rewarded well. This principle makes a financial obligation on the part of the owner of a vessel in distress. It will both encourage other sea goers to attempt a rescue, and at the same time deter those who might otherwise plunder her cargo as opposed to saving her.

Although salvage laws vary between countries, generally there are conditions that must be met to allow a claim of salvage. The vessel and/or cargo must be in peril, which is broadly defined and may, for example, include future danger. The person rendering aid (the ‘salvor’) must be acting voluntarily and under no pre-existing contract. Therefore the crew of a vessel may not usually claim salvage for the same vessel since they are deemed under contract. However, there are clauses that do allow for the crew to become salvors e.g. if the vessel has been formally abandoned by the master. Finally, the salvor must be successful in his efforts, though payment for partial success can be granted in certain circumstances.

The convention does not consider saving lives to be part of salvage, but the protection of the environment is part of salvage. For example, if the salvor prevents oil pollution from happening, he indeed performs a valuable service. Therefore, the salvor will be rewarded with special compensation known as liability salvage as opposed to property salvage.

Salvage law is applicable even if there is no contract between the salvor and the saved. To claim salvage the burden of proof lies with the salvor, which means the salvor needs to prove real danger existed when the performance of service commenced. The arbitrators or court must determine whether the property was truly in danger. Common considerations are:
a. Would a reasonable Master of the vessel in distress have answered yes or no to the offer of assistance?
b. Was there a real apprehension of danger even though that danger may not have been absolute or immediate?
c. Was the danger fanciful or so remote as only to be a distant possibility?

What advice is there for sailors? Generally speaking, recreational boaters are happy to help each other out and it is highly unusual for those offering assistance to claim salvage.
However, if there is no recreational boater assistance available and you’re not in imminent danger you would probably be wise to fix a price in advance with the person offering assistance. This would avoid a salvage claim being made. It is usually cheaper to agree on payment for assistance in advance rather than to leave it to be determined after the event.

If danger is imminent, call the emergency services. In the UK – HM Coastguard and the RNLI do not normally make claims for salvage. However, there may be an occasion where a boat is in imminent danger and emergency services are not available and salvage has to be accepted. Where possible a skipper and salvor should be very clear on what is being agreed at the time. Salvage terms can be complex and the terms of Lloyd’s Open Form will be of assistance – keep one in your chart table. This is a simple form of salvage agreement and gives jurisdiction to determine the reward to Lloyd’s of London arbitrators, rather than the courts. Accepting salvage without an agreement on payment (i.e. the amount of any payment will be settled later) is a risk and may be subject to the law of salvage arbitration or Court determination. Finally, there is a two-year limit to commence judicial or arbitration proceedings arising from a salvage claim.
National sailing associations may be able to provide advice. In the UK RYA members are entitled to free legal advice on any salvage or towage issues, while also having access to further in-depth salvage and towage information, including a download of Lloyd’s Standard Form of Salvage Agreement, online.

References:

1 From “Law of Salvage” Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 7 December 2017. Web -18 Dec 17.
2 RYA website Salvage and Towage – copyright 2017. Web -18 Dec 17.
3 Sailfeed website SALVAGE LAW: Do You Get To Keep An Abandoned Boat? By Charles Soane dated Jul 15. Web -18 Dec 17.

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