Issued 29th September 2016
The Executive Committee and members of the International Salvage Union (ISU) have re- stated their commitment to using and promoting the Lloyd’s Open Form salvage (LOF) contract. It comes at a time when use of the contract is at historic low levels. The issue was discussed today at the 62nd General Meeting of the International Salvage Union in Livorno, Italy.
Lloyd’s Open Form has been in use for more than 100 years in various editions, the current version is LOF 2011. The contract contains simple, pro forma clauses enabling it to be quickly agreed in a casualty situation.
Speaking at the ISU AGM, ISU President, John Witte said: “LOF has stood the test of time simply because it is the best contract to use in many emergency response situations. But the number of LOFs being agreed has come down in recent years and it is a concern. LOF has great benefits. It is simple, easy to understand and requires no negotiation of fees when resources are better spent on trying to save life and property and in protecting the marine environment from the consequences of a casualty.
“The great majority of LOF cases are settled amicably which we think is a clear demonstration of its fairness. And the salvor is only paid if the job is a success – in short, the salvor carries the financial risk of the job.”
“We would like the shipping community and the marine insurers to be in no doubt that LOF has the full support of the ISU. We know there is much commercial pressure in the salvage industry but other solutions are not always appropriate, or safe.”
ISU has been working with Lloyd’s to improve understanding of the benefits of the contract and will re-double its efforts particularly with marine property underwriters and shipowners.
The ISU AGM also saw members discuss other current issues, such as new processes for handling large project tenders, and heard from Italian Coastguard Admiral Nicola Carlone who described efforts to deal with the huge numbers of migrants crossing the Mediterranean Sea.
Members of the ISU also discussed the reputation of the salvage industry. Mr Witte said: “Membership of the ISU is a privilege and our members offer experience, capability and, importantly, their own resources to use when they provide services to casualties. At the outset of my Presidency of ISU I said publicly that there was concern about the reputation of our industry. ISU expects its members to behave ethically and in line with the ISU code of conduct and we will remain vigilant on this point.”
“We also expect that other parties should be fair to the salvors and to recognise the importance of our industry. We should all be clear of the need to use the right contract for the right situation.”