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The Hill Dickinson Yacht Team hosted a seminar on 14 January addressing what to do when
a yacht is in distress – aptly named “Between a rock and a hard place:
topical salvage issues”. Presentations from a range of experts in the
issue of yacht salvage were given to an audience of captains, officers
and professionals from fields of insurance, law and yacht management.
The overall conclusion of the seminar was that it is vital all parties
involved with a possible yacht salvage situation – including lawyers,
salvors, insurance and crew – are prepared, communicate promptly and
work together to help the said yacht and its passengers of guests and
crew.
Hill Dickinson partner Mike Mallin introduced the topic to the group,
defining key terms and the background to salvage, dating to pre-Roman
times, and is to “reward spontaneous services, rendered in the
protection of the lives and property of others”. Most countries
currently apply The International Salvage Convention 1989. The salvor
plays a key role in ensuring that vessels in distress – be they large
commercial ones or private superyachts – can quickly be brought to
safety. This ranges from relatively small collisions with limited
damage (which may simply require towage to a local port) to a
full-scale salvage of a semi-submerged vessel that has the potential to
cause serious environmental destruction.
Mallin gave the example of a case of a commercial vessel that broke
down in the English Channel, 200-300 miles offshore, and called for a
salvor rather than a tug. The rescue cost the salvor $800,000 but the
company was awarded $1.7m in a US court.
Mallin highlighted the use of the Lloyd’s Open Form in salvage cases,
and encouraged masters to make themselves aware of this and how it
works. It was advised that for any salvage situation in Turkey, the
vessel call for a representative on the ground immediately as the
awards to salvors can become a much larger percentage of the vessel’s
value than in other countries.
Mark Hoddinott of Titan Salvage, which has worked marine vessel salvage
crises the world over from Tristan de Cuhna to Bear Island, above the
Arctic Circle, gave an interesting presentation from the perspective of
a salvor. He encouraged insurance companies to pick up the telephone
and discuss options for vessels in distress, as there are often various
choices with the different associated costs.
He also explored the way salvors address yachts as potential clients
compared to large commercial vessels. As the ownership of yachts is
usually easier to establish than on commercial ships, the insurance
status is often easier to establish. The environmental concerns are
similar with either type of vessel, but yachts have no cargo
considerations and the different constructions (commercial vessels are
often steel, yachts are GRP) lead to a difference in the way the
problems are addressed. Hoddinott also stressed that crew competencies
can be an issue with yachts in need of towage or salvage, and that
implementation of protocols and training is imperative for this to be
resolved.
He outlined some of the fascinating specific cases on which Titan had
worked, which brought to life a subject that is all too real for those
involved in a distress situation but often less tangible when
approached from a purely legal standpoint.
Charlotte Warr of Sarnia Training brought her own perspective as an
insurer to the seminar through a presentation. As an insurer she
stressed that it is important to inform her at the earliest possible
stage of a potential salvage situation on your vessel, so as to avoid
escalating costs. Towage costs collected by a salvor are often
significantly lower than those of a salvage. Hence there appears to be
some level of perceived pressure from salvors to salve rather than tow.
She confirmed with Hoddinott that day rates are usually available for a
service, which can help control costs, and that communication between
the parties will help best assess the situation’s resolution. However,
Warr’s level-headed view of a situation is that the safety of crew and
guests are paramount. If you need to make a quick decision, do not take
vital time to refer to documentation and policies, she says: “Insurers
must be brave and confident enough to make a decision quickly.” An
insurer’s priorities should be to the people first and property second.
From the insurer’s perspective, Warr commented that the key requirements are:
• To tell them quickly.
• To allow them to take control of a situation if required and work
with the insured to locate suitable rescue options such as tugs,
including negotiating rates.
• Not to leave them out of the loop and expect them just to pay the bill.
• To ensure the crew is fully prepared for what to do in a potential
salvage situation. Some insurers will provide their clients with
instruction sheets for emergencies.
Standing in for Will Dallimore, Tom Starr of Burgess brought the
perspective of the yacht manager to the discussion, as well as his
personal experience as a crewmember for ten years including first
officer on a 115-metre motoryacht. Starr also stressed the importance
of a well-prepared crew to reduce risks in a distress situation.
Contingency plans feature heavily in this preparation, including:
• Regular drills and exercises (both for the team ashore and onboard).
• Testing of equipment and checking what works under emergency power.
• Practicing emergency towing procedures.
• Knowing what to do if the master is incapacitated.
• Have a stability model easily to hand (both on land with a management company or similar).
• Have a contact list of emergency numbers such as towage companies and local agents to hand.
Starr noted the increased environmental regulations of recent years and
that it is vital as a master or engineer to familiarise yourself with
the SOPEP forms before you need them in such an emergency, as they are
not particularly user friendly. It is important to make sure good
records are kept of any incidents, including video or photographic
footage if possible. He also mentioned the increased need to have a
well-oiled media response to a salvage situation, in particular
appointing a specific individual as spokesperson and only issuing
well-prepared statements to avoid problems at a later stage.
Litigation expert Martin Penny, Hill Dickinson partner and chair of the seminar, then gave his own take on the subject through years of assessing salvage awards. Penny commented that the experience garnered from cases over the years is one of the most vital tools with which to approach an award assessment. Combined with this experience, it is vital that all the available evidence is presented in order that a speedy and fair assessment of an appropriate award can be made using the criteria set out in Article 13 of the Salvage Convention (more information on salvage and the Lloyd's Open Form can be found on the Lloyd's website). Penny gave two examples to illustrate this point: 25 per cent of the value recovered was awarded to the salvor of a yacht that was in grave danger of exploding and put the salvor at risk; in contrast, another salvor was granted only a seven per cent award for a more straightforward case that involved little danger. Penny reiterated Warr's remarks regarding turning a salvage situation into a towage situation, paying a day rate as opposed to a percentage value awarded to reduce costs; he also stressed the importance of surveyors in this process.
All parties agreed that good communication is the key to making the
best of a towage or salvage situation, and ensuring the master and
crew, insurer and management company all know what to do should it
arise. Ultimately a salvor is there to help, and by managing the
process well this can be done in the most effective and inexpensive way
possible.
Esther Barney
Related links
Information on the Lloyd's Open Form including downloadable version
Hill Dickinson company profile | website
Titan Salvage website
Sarnia Training website
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