Lloyd's has issued a shorter and more user-friendly version of its internationally renowned standard salvage agreement – the Lloyd's Open Form – that is carried on the bridge of virtually every vessal in the world.
The new version of the form has been shortened from six pages to just two, by removing most of the legal and procedural information and placing it in a separate document.
The language has also been simplified to take into account the increasingly international nature of ships' crews.
And for the first time, Lloyd's Form includes a facility allowing parties to decide whether the Special Compensation P&I Club (Scopic) Clause forms part of the agreement.
The Scopic Clause, created last year, provides an alternative regime for the determination of claims for special compensation under the 1989 Salvage Convention – claims that would otherwise be settled by Lloyd's Open Form arbitration.
The Salvage Convention provided that the salvors could receive special compensation – their expense and a fair rate for tugs and equipment used – in salvage operations where the salved fund was insufficient to pay them adequate salvage remuneration. The Scopic Clause endorsed this concept, but introduced a tariff to calculate the salvor's special compensation.
On average, the Lloyd's Open Form is used in 150 salvage incidents each year. Last year more than £16m in payments were made as a result of the form's use. The biggest award so far was for $8.2m in 1998, when container vessel MSC Carla broke its back in mid-Atlantic, requiring that its stern section be towed by a salvage container to the Canary Islands.
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