To claim a salvage award, there are three conditions that must be met: marine peril, voluntary assistance, and success.
Marine salvage law goes back hundreds of years, however, the concepts once instituted for commercial vessels and professional seamen still apply to today’s recreational yachts and amateur boaters. While there is a tendency to think of modern recreational boat salvage in the same terms that would apply to a AAA tow truck, the concepts — and results — are vastly different. It is confusion of the differences that often results in misunderstandings or conflicts.
The goal behind salvage award policies is to encourage people to save ships and the people and property on them, and to return the salvaged property to the owners — as well as to discourage “greedy” mariners from appropriating wrecked ships and prevent looting, piracy, or worse.
As Chief Justice John Marshall of the U.S. Supreme Court stated in 1804, if property is exposed to peril or hazard at sea and is saved by the voluntary exercise of any persons whatsoever, “a very ample award will be bestowed in the courts of justice.”
Basically, salvage is a system of compensation to a person who voluntarily assists a vessel upon navigable waters from impending peril, resulting in the recovery or saving of some or all of the vessel, its cargo or property. In order for there to be a valid claim for salvage, the salvor must show that the vessel was in peril, voluntary actions (meaning the absence of any preexisting contract) were rendered, and the salvor was successful in saving some or all of the property at risk. If all three conditions are met, he would be entitled to a salvage award.
A salvage award is based on a number of factors such as:
- The post-casualty value of the vessel.
- The nature and degree of danger.
- The measure of success obtained by the salvor.
- The skill and efforts of the salvor in saving the vessel and other property.
- The time used, and expenses and losses incurred by the salvor.
- The risk of liability and other risks run by the salvors or their equipment.
- The promptness of the services rendered.
- The availability and use of vessels or other equipment intended for salvage purposes.
- The state of readiness and efficiency of the salvors’ equipment and the value thereof.
- The skill and efforts of the salvors in preventing or minimizing damages to the environment.
These factors are used to determine the value of the salvage award, which is generally a percentage of the post-casualty (or after-the-accident) value of the vessel. With an expensive yacht, a few percentage points of the hull value can be quite a large number.
Salvage is different from towage, which is a service rendered to assist the vessel and expedite its journey from point to point — a service rendered almost as a convenience to the owner and not for the safety of the vessel. While salvage may involve the act of towing at some point, towing does not involve the act of salvage.
One of the chief bones of contention is the issue of peril. Everyone will agree that a boat on fire and taking on water while off a lee shore in the teeth of a hurricane is “in peril.” On the other hand, a becalmed sailboat on an otherwise nice day, in deep water with no impending storm, is not. Some degree of marine peril, however slight, can be presumed to trigger a salvage claim. It may be a small amount, or a “low-order salvage,” but it would still result in a salvage claim.
In South Florida, and particularly in the Florida Keys, there are many claims involving groundings. It is often presumed that a vessel hard aground, even though it is not in danger of sinking, is at the mercy of the wind and waves and is in some degree of peril. Changing conditions, pending storms, etc., can raise the degree of peril.
When a stranded boater who is hard aground requests a salvor to render assistance and pull him off the sandbar, there is generally some degree of peril, and therefore, it can result in a valid salvage claim.
The key to these situations may be that the salvor and the recreational boater need to understand what the arrangement between them is before it gets started. Often a salvor will operate under what is referred to as a “no cure, no pay” salvage agreement. That is, if the salvor does not render success, he doesn’t get paid. This is different from a towage contract based on a contractual rate (time and materials), usually agreed to beforehand. The rationale behind the open form of a “no cure, no pay” agreement, in which the fee is determined later, is that it allows professional salvors and captains to deal with the job at hand: saving the vessel. Standing on the deck of a sinking vessel is not the time to haggle back and forth over the fee for the job.
If it is not a life-threatening situation or matter of extreme peril, the boater and the salvor should come to some sort of understanding before the job as to whether it is towage or a “no cure, no pay” salvage agreement, the amount of which to be determined later. It’s vital that everyone knows the arrangements before entering into agreements.
Before you get into a potential salvage situation, here are a few tips to consider:
- Read your insurance policy carefully to see just what it covers and what are your duties in a salvage situation.
- If you have a separate tow membership agreement or contract, read it carefully to see just what is covered. Most cover only “towage” and not “salvage.” Get the contact information for all towers and salvors in the areas in which you will be sailing.
- Should you find yourself in peril, have everyone put on their life jackets. Issue a call on Channel 16 of your VHF radio. Inform the Coast Guard or local marine patrol of your location and situation. If there is not a life-threatening situation, the Coast Guard or local authorities may ask if you have a preference for commercial assistance companies. Tell them your preference and call the person you may have previously chosen.
- Keep in mind that if this is truly an emergency situation, it is not the time to make decisions based solely on financial reasons or preferences. You have a responsibility for the safety of your passengers and vessel.
- Finally, should you have any specific questions, contact your insurance provider, salvor, or attorney.
Michael Karcher is a South Florida maritime lawyer with the Robert Allen Law Firm in Miami.