Lloyd's Maritime and Commercial Law Quarterly
Salvage and the role of the insurer
Geoffrey Brice *
The purpose of this paper is to examine the important role undertaken by property and liability insurers in the field of salvage of ships, cargoes and other property and to illustrate the initiatives which have been taken by or with the cooperation of insurers in the development of maritime safety and the protection of the marine environment.
Salvage rewards: underlying policy
I begin by drawing attention to the basic policy underlying an award of salvage. Salvage is of course the preservation by a voluntary salvor of a ship, cargo and certain other classes of property at sea or in other waters from danger. The amount of salvage remuneration is limited by the size of the salved fund, i.e., the value of the salved property at the time when and place where the salvage services terminate.
The remedy of salvage is of great antiquity. It has long been recognized that insurers of salved property play an important part commercially in ensuring that the salvor is paid his due remuneration when that has been settled by a court or arbitrator if not by agreement. An expression of the policy underlying salvage rewards was reported almost 165 years ago in a decision in the English Court of Admiralty. In The Industry
1
Sir John Nicoll held:
The amount of remuneration must depend on all the circumstances. It is not merely a question of work and labour, nor a mere calculation of hours, though time is undoubtedly an ingredient; but there are various facts for consideration,—the state of the weather, the degree of damage and danger as to ship and cargo, the risk and peril of the salvors, the time employed, the value of the property; and when all these things are considered, there is still another principle—to encourage enterprise, reward exertion, and to be liberal in all that is due to the general interests of commerce, and the general benefit of underwriters,
even though the reward may fall upon an individual owner with some severity.
That policy still holds good. The International Salvage Convention 1989 provides in the first sentence of Art. 13(1) (which sets out the criteria to be applied in fixing a salvage reward) that
The reward shall be fixed with a view to encouraging salvage operations,…
* (12 April 1938–14 November 1999). Q.C.
[This paper was to have been delivered at an International Marine Insurance Conference organized by Professor Marc Huybrechts at the University of Antwerp in November 1999. The papers from the conference are being published as M.Huybrechts (ed.), Marine Insurance at the Turn of the Millennium
(Intersentia, Antwerp-Groningen-Oxford, 1999–2000) 2 vols. Geoffrey Brice’s paper is reproduced here, with the kind permission of the editor and publishers and Mrs Nuala Brice, as a tribute to Mr Brice.]
1. (1835) 3 Hag. Adm. 203, 204 (emphasis added).
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