The International Salvage Union (ISU) has reported that momentum is building with work to reinvigorate the Lloyd’s Open Form (LOF) standard salvage contract.
There was widespread concern within the salvage industry and beyond last year when Lloyd’s indicated it was considering closing its salvage arbitration branch. Recent years have seen a decline in the number of salvage acts using LOF, but the reaction clearly demonstrated that there was a place for this simple and trusted contract intended to protect all parties during situations when time is of the essence and Lloyd’s subsequently initiated a programme of work with key stakeholders to find ways to increase use of the form.
Work has been grouped into three areas; linking LOF to business’s environment, social and governance agendas; promoting more use of LOF in Asia and the Far East and looking at awards and costs associated with the contract. The importance of education about the contract is also considered central throughout the workstreams.
Three working groups are made up of a wide range of interested parties with ISU fully represented on all three, and initial sessions have taken place, the outputs to be considered imminently by the Lloyd’s Salvage Group.
The International Group of leading P&I Clubs recently published its report, prepared by former UK SOSREP Hugh Shaw, investigating delays with emergency response contracting and finding that: “Over 80% of stakeholders felt that ‘avoidable delays’ in the contracting and engagement of salvage services might lead to the escalation of a situation to a point where significant damage, loss and/or danger to life might occur.”
The report noted that few casualties improve with age, delay leading to worsening of the situation with accompanying potential for increased risk to property and consequential damage to the environment.
One factor with delays is where progress in the field of global communications led to “erosion of the authority of masters and deference to shore-based decision making.”
Financial considerations also significantly influenced the choice of contract or salvage services provided.
The report included conclusions and an extensive range of recommendations, all of which will help inform the Lloyd’s LOF workstreams, with ISU saying that rapid intervention and full cooperation in the interests of the owner is always the best approach and its members stand ready to offer their services.