The first Lloyd’s Form of Salvage Agreement was devised in 1890 at the instigation of a salvor. Various other salvage contracts were subsequently approved by Lloyd’s, but it was not until towards the end of 1892 that the first Standard Form was issued. Since then the Form has been revised and amended on many occasions, but there have been few amendments, I would submit, as far reaching as those recently approved by the Committee of Lloyd’s.* The need for these far reaching amendments has been brought about by the alarming growth in tanker casualties and the resulting increase in oil spills and damage from oil pollution.

To give some idea of the casualties: In 1979, 2.2 million tons deadweight of tankers and gas carriers (exceeding 10,000 tons d.w.) were totally lost and a further 1.6 million tons d.w. were seriously damaged. In total, just over 1% of the world tanker/gas carrier fleet. Major spills during the year amounted to some 483,000 tons of oil (or some 120 million gallons).

As is well known, the principle behind the Lloyd’s Open Form has traditionally always been “no cure, no pay” or, in other words, if the salvors fail to salve any property they get no reward; similarly, if the value of such property as they do salve, part ship or part cargo, is not great, it may well be that their award on that property salved will not cover their expenses. But this principle, which has served well in the past, has come under increasing scrutiny in recent years, particularly as a result of the increase in tanker casualties. The problem is that the hope or chance of a property award is frequently little or no incentive to a salvor of a stricken tanker whose cargo has escaped or is about to escape and cause pollution.

The factors which militate against the value of the property award are threefold. First, the greater the damage to the vessel, the greater the potential spill. This in turn increases the threat of oil pollution, but reduces the potential salvable cargo and hence the potential award. Secondly, the existence of the oil spill renders the salvage operation more difficult both physically and politically. Physically because of the dirt and the smell. Politically because an oil spill which threatens a coastline tends to attract the attention of the Government whose coast is threatened. That Government frequently, if not inevitably, feels constrained to intervene to prevent or minimise pollution and this may well involve giving directives to the salvor which interfere with the successful salvage of the vessel. In particular, a salvor may be faced with what