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International Salvage Union argues the case for Lloyd’s Open Form

International Salvage Union argues the case for Lloyd’s Open Form
The International Salvage Union has reiterated its calls for greater use of the Lloyd’s Open Form (LOF) rather than other commercial contracts when engaging the services of a marine salvor to aid a ship in distress.

LOF works on the principle of “no cure, no pay” and provides salvors with a financial reward based on the success of the operation and value of goods saved, ISU president John Witte explained at the body’s annual press lunch in London this week.

“Salvors expect and deserve a reward when they go out and risk their lives and financial wherewithal,” he said, with “decent” levels of remuneration helping subsidise the cost of the expensive vessels on standby. Salvors also act to prevent pollution, he pointed out, adding: “Equity and fairness is a two-way street.”

However, commercial pressures mean that use of LOF continues to decline in favour of fixed -tariff contracts based on the hire time of salvage vessels and equipment. ISU members’ revenue from LOF cases in 2015 was $83m, its lowest level in more than a decade, Witte informed.

To combat what it sees as this “worrying trend” ISU last year began a joint project with Lloyd’s of London to try and improve the use of LOF through education and information.

An additional measure now being considered is to make SCOPIC - the Special Compensation P&I Club Clause, which provides a safety net for extra expenses incurred to prevent pollution - part of the standard LOF contract with merely an opt-out tick box, rather than it having to be added in, the ISU president informed.

Meanwhile, growth in environmental awareness has also led to ISU members’ revenue from wreck removal “galloping ahead in the last decade, reaching $359m from 64 cases in 2015,” he pointed out, “showing the priority that coastal states now attach to that activity.”