Law of Maritime SalvageLaw of Maritime Salvage

An OverviewAn Overview

DisclaimerDisclaimer

•• Summary of law, not legal adviceSummary of law, not legal advice•• Each case is very fact specificEach case is very fact specific

Why do we care about salvage?Why do we care about salvage?

Nature of Marine SalvageNature of Marine Salvage

•• Law of marine salvage of ancient vintageLaw of marine salvage of ancient vintage•• In the U.S., governed by general maritime In the U.S., governed by general maritime

law, including statutes, relevant treaties, law, including statutes, relevant treaties, and other international obligationsand other international obligations

•• Salvor of imperiled property on navigable Salvor of imperiled property on navigable waters gains a right of compensation from waters gains a right of compensation from ownerowner

Elements of Salvage ClaimElements of Salvage Claim

•• There must be a marine peril placing the There must be a marine peril placing the property at risk of loss, destruction, or property at risk of loss, destruction, or deteriorationdeterioration

•• The salvage service must be voluntarily The salvage service must be voluntarily rendered and not required by existing rendered and not required by existing duty or special contractduty or special contract

•• The salvage efforts must be successful, in The salvage efforts must be successful, in whole or in partwhole or in part

Marine PerilMarine Peril

•• Court determines if, at time assistance Court determines if, at time assistance rendered, ship was in a situation that rendered, ship was in a situation that might expose her to loss or destructionmight expose her to loss or destruction

•• Danger need not be imminent or actualDanger need not be imminent or actual•• Reasonable apprehension of perilReasonable apprehension of peril•• If ship has situation under control, there is If ship has situation under control, there is

no perilno peril

Marine Peril?Marine Peril?

Voluntary Nature of ActVoluntary Nature of Act

•• Contract or other obligation between Contract or other obligation between salvor and salved will preclude salvor and salved will preclude voluntarinessvoluntariness

•• Motive of salvor is irrelevant Motive of salvor is irrelevant –– a a professional salvor who acts for economic professional salvor who acts for economic gain is a volunteer as well as a gain is a volunteer as well as a ““good good samaritansamaritan”” salvorsalvor

Efforts Must be Successful Efforts Must be Successful

•• For a salvage award, at least some of the For a salvage award, at least some of the property must be savedproperty must be saved

•• Distinction between marine salvage and Distinction between marine salvage and contract salvagecontract salvage

Involuntary SalvageInvoluntary Salvage

•• Salvage cannot be forced upon an ownerSalvage cannot be forced upon an owner•• Salvor who acts without consent of owner Salvor who acts without consent of owner

is a is a ““gratuitous intermeddlergratuitous intermeddler”” who is not who is not entitled to a salvage awardentitled to a salvage award

•• However, if vessel is a derelict, abandoned However, if vessel is a derelict, abandoned by master and crew, she can be salvaged by master and crew, she can be salvaged without consentwithout consent

Who Can be a SalvorWho Can be a Salvor

•• Any person, including a corporation or a Any person, including a corporation or a government agency, that performs an act government agency, that performs an act of salvage as long as there was no of salvage as long as there was no preexisting duty to perform the act in preexisting duty to perform the act in questionquestion

•• Preexisting duty may arise out of Preexisting duty may arise out of relationship of salvor to salved shiprelationship of salvor to salved ship

Examples of Preexisting DutiesExamples of Preexisting Duties

•• Crew members of salved ship are expected to Crew members of salved ship are expected to take actions in perilous situation, thus normally take actions in perilous situation, thus normally denied awardsdenied awards

•• Passengers are expected to give only incidental Passengers are expected to give only incidental aid and are entitled to an award for aid and are entitled to an award for extraordinary effortsextraordinary efforts

•• Firemen, pilots, or other public employees may Firemen, pilots, or other public employees may qualify for an award only if service outside line qualify for an award only if service outside line of official dutiesof official duties

Examples of Preexisting DutiesExamples of Preexisting Duties

•• Contract to provide assistance (e.g. Vessel Contract to provide assistance (e.g. Vessel Assist)Assist)

Navy and Coast Guard VesselsNavy and Coast Guard Vessels

•• Navy and other military vessels are Navy and other military vessels are entitled salvage because their services are entitled salvage because their services are beyond the scope of their official missionbeyond the scope of their official mission

•• Coast Guard not entitled to salvage in Coast Guard not entitled to salvage in performance of usual duties of going to performance of usual duties of going to aid of distressed vesselsaid of distressed vessels

““Good SamaritanGood Samaritan”” SalvorSalvor

•• Individual involved in rendering assistance Individual involved in rendering assistance gratuitously and in good faith is not liable gratuitously and in good faith is not liable for damages as a result of rendering for damages as a result of rendering assistance when the individual acts as an assistance when the individual acts as an ordinary, reasonable, and prudent ordinary, reasonable, and prudent individual would have acted under the individual would have acted under the circumstancescircumstances

SalvorSalvor’’s Negligence and Misconducts Negligence and Misconduct

•• When salvor undertakes salvage effort, When salvor undertakes salvage effort, represents that it will be performed with represents that it will be performed with reasonable skill and carereasonable skill and care

•• Salvor liable for ordinary negligence in Salvor liable for ordinary negligence in carrying out salvage operationcarrying out salvage operation

•• Damages will reduce salvage awardDamages will reduce salvage award

SalvorSalvor’’s Negligence and Misconducts Negligence and Misconduct

•• Gross negligence, looting or spoilage of Gross negligence, looting or spoilage of salved property will result in forfeiture of salved property will result in forfeiture of salvage awardsalvage award

•• If salvage unsuccessful, salvor not If salvage unsuccessful, salvor not responsible for lossesresponsible for losses

•• Professional salvors held to higher Professional salvors held to higher standardstandard

Salvage AwardSalvage Award

•• Court makes determination based on Court makes determination based on number of factorsnumber of factors

•• Very fact specific and discretionaryVery fact specific and discretionary•• Policy is to grant salvage awards that Policy is to grant salvage awards that

encourage others to incur risk and go to encourage others to incur risk and go to aid of vessels in distress, but to avoid aid of vessels in distress, but to avoid windfalls of unreasonable extravagancewindfalls of unreasonable extravagance

Elements of Salvage AwardElements of Salvage Award

•• Salved value of vessel and other propertySalved value of vessel and other property•• Measure of success obtained by salvorMeasure of success obtained by salvor•• Nature and degree of dangerNature and degree of danger•• Skill and efforts of salvorSkill and efforts of salvor•• Time and expense incurred by salvorTime and expense incurred by salvor•• Risk of liability and risk to salvorRisk of liability and risk to salvor’’s s

equipmentequipment

Newer Element of Salvage AwardNewer Element of Salvage Award

•• Skill and efforts of salvors in preventing or Skill and efforts of salvors in preventing or minimizing damage to the environmentminimizing damage to the environment

Contract SalvageContract Salvage

•• Salvor enters into contract to save Salvor enters into contract to save maritime property using maritime property using ““best endeavorsbest endeavors””

•• LloydLloyd’’s Open Form s Open Form –– ““no cure, no payno cure, no pay””•• Other salvage contractsOther salvage contracts•• If salvage contract entered into when If salvage contract entered into when

vessel is in an vessel is in an in extremisin extremis situation, courts situation, courts may set it aside if compensation is grossly may set it aside if compensation is grossly exorbitant or if salvor took unfair exorbitant or if salvor took unfair advantage or was guilty of fraudadvantage or was guilty of fraud

Life SalvageLife Salvage

•• Under general maritime law:Under general maritime law:A life salvor has no claim against the person A life salvor has no claim against the person savedsaved““Pure life salvorPure life salvor”” (no property saved) has no (no property saved) has no right to compensation from shipright to compensation from ship

•• Has been modified by international Has been modified by international conventions, statutes, and case law and conventions, statutes, and case law and may receive a rewardmay receive a reward

Obligations of Life SalvageObligations of Life Salvage

•• Duty under both international law and Duty under both international law and domestic law to endeavor to save life at domestic law to endeavor to save life at seasea

•• Standby Act (46 USC Standby Act (46 USC §§ 2303) requires 2303) requires master of vessel involved in collision to master of vessel involved in collision to standby to extent he can do so without standby to extent he can do so without seriously endangering his own vessel, seriously endangering his own vessel, crew and passengerscrew and passengers

Obligations of Life SalvageObligations of Life Salvage

•• Salvage Act (46 USC Salvage Act (46 USC §§ 2304) requires a 2304) requires a master to render assistance to every master to render assistance to every person found at sea in danger of being person found at sea in danger of being lost so far as he can do so without danger lost so far as he can do so without danger to his own vessel, crew, or passengers to his own vessel, crew, or passengers

Vessel Assist:Vessel Assist: Salvage v. TowingSalvage v. Towing•• Typical membership services include Typical membership services include

towing disabled boat to port, battery towing disabled boat to port, battery jumpstarts, delivery of fuel, fluids, and jumpstarts, delivery of fuel, fluids, and basic parts to avoid a tow, and basic parts to avoid a tow, and ““softsoft””ungrounding assistance (absent contract ungrounding assistance (absent contract could be considered salvage)could be considered salvage)

•• Does Does notnot include include ““hardhard”” groundings or groundings or assistance requiring multiple vessels, assistance requiring multiple vessels, pumps, divers, etc. pumps, divers, etc.

Marine InsuranceMarine Insurance

•• Check your Yacht Insurance PolicyCheck your Yacht Insurance Policy•• Salvage charges are normally a covered Salvage charges are normally a covered

peril, but important to read and peril, but important to read and understand your insurance coverage, understand your insurance coverage, limits, and exclusionslimits, and exclusions

Questions?Questions?