The Business of Salvage -2

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The Business of Salvage, Part 2

Maritime Salvage Law is based on the principle that ship owners should encourage independent salvors to save an endangered vessel and that one must make the risk of attempting to save a sinking vessel worthwhile. More importantly, law makers wanted to make the reward large enough to discourage would-be salvors from helping themselves to valuable cargo and freight. In addition, law makers recognized the expense required to maintain specially equipped salvage vessels and equipment and to have a crew ready to act on a moment's notice. Remember now that many Maritime Salvage Law precedents, still cited today, occurred during the days when sailing vessels carried all of the freight and cargo. They traveled thousands of miles from home with no method of communication with the home office. They were not only at the mercy of the potentially tumultuous sea but at the mercy of the local legal system as well. Thus most countries treated Maritime (Admiralty) Law cases outside of the civil courts and developed amazingly consistent rulings that created, for all intents and purposes, an international Admiralty system.

Today, there are three requirements for a pure salvage claim:

1) The ship or boat and/or other property must be in peril.

2) The salvor's actions must be voluntary. He must not be under any pre-existing contract or other legal obligation to help. Therefore, your local fire department would not be eligible for a salvage claim nor would the Coast Guard (but the Navy would).

3) The salvors must be successful in saving some or all of the property at risk.. If the vessel sinks while the salvors are attempting to save it and are subsequently unable to raise it, they are not entitled to any compensation, regardless of how much time and effort went into the attempt. One exception to this requirement is where the efforts of the salvors resulted in reduced environmental damage.

A failure to meet any of the above three requirements would negate any salvage claim.

Did the salvors of your two million dollar yacht meet these requirements? Was your vessel in peril? Yes. Was there a preexisting contract? No. Were the salvors successful? Yes. We therefore have a valid salvage claim. You may say, "I didn't authorize them to salvage my boat." By virtue of the fact that you allowed them on board, you authorized them to proceed. In fact, had you not permitted them on board, your insurance company might say that you did not attempt to mitigate the damages and refuse to pay a sizable portion of your claim.

The articles adopted during the International Convention on Salvage, 1989, used by arbitrators and also by the courts, base a pure salvage award on a number of factors:

1) The salved value of the vessel. This is the value of the vessel prior to the "incident" less the cost of repairing any damage that occurred prior to and during the salvage.

2) The skill and efforts of the salvors in preventing or minimizing damage to the environment.

3) The measure of success obtained by the salvor.

4) The nature and degree of danger.

5) The skill and efforts of the salvors in salving the vessel, other property and life.

6) The time used and expenses and losses incurred by the salvors.

7) The risk of liability and other risks run by the salvors or their equipment.

8) The promptness of the services rendered.

9) The availability and use of vessels or other equipment intended for salvage operations.

10) The state of readiness and efficiency of the salvor's equipment and the value thereof.

As you can see, salvage today requires far more than just an amateurish attempt at plugging a leak. Salvage is a business and, like other businesses in today's economic climate, requires highly trained professionals with specialized equipment. Each and every marine salvage situation is different. The skills required to be a successful salvage master must be acquired through years of experience. Not only must a salvage master have knowledge of basic naval architecture and underwater physics, a modern salvage master must also know (and be certified in) hazardous materials handling. With the growing number of governmental agencies having authority over potential environmental damage, the pollution that could result from a sunken or sinking vessel is frequently as large (if not larger) a problem as the sinking vessel itself. If these agencies believe that either the salvor or the vessel's owner did not take prompt and reasonable action to prevent environmental damage, they are likely to levy large fines. These fines have the potential to far exceed the value of the vessel itself - which is the reason many insurance companies exclude pollution damage (check your policy.)

There are liabilities and risks that are always associated with a potential salvage reward. As stated, anyone attempting a salvage runs the risk of being held responsible for environmental damage. A salvor, like any businessman, can also be held responsible for gross negligence on his part or on the part of his employees. Last, but certainly not least, is the "No Cure - No Pay" clause. For tips on choosing a salvage company - go to part 3.

This article was written by Sea Tow Captain Les Hall