LLoyd's Open Form

[Malabar]

LLoyd\'s Open Form

Nightmare: 15m yacht dismasted, rope round prop, and on a lee shore. Tug comes over horizon and offers LLoyd's Open Form Salvage Agreement. Question: how do you answer the Scopic Clause question at Box 7? Any lawyers out there?

 

[stephenh]

Re: LLoyd\'s Open Form

It depends :

LOF 1995 does not give a contractor any express right to terminate a LOF contract and the contractor's obligation throughout is to use his best endeavours to salve the ship and other property on board. However, clause 9(i) of SCOPIC confers a right of termination on the contractor if "he reasonably anticipates that the total cost of his services to date and the services that will be needed to fulfill his obligations hereunder to the property....will exceed the sum of (a) the value of the property capable of being salved and (b) all sums to which he will be entitled as SCOPIC remuneration".

SCOPIC appears to give a schedule of rates for the salvor and this is an opt out clause.

 

[chanelyacht]

Re: LLoyd\'s Open Form

Not a lawyer, but a salvage master.

LOF is a no-win, no-pay arrangement. Obviously, if recovering something like a ship, the value of the insured is likely to be well in excess of the salvor's costs, therefore the job would be worth doing.
In the case of a yacht, for example, if we carried out the salvage using one of our fleet, charged at around £1200 / hour on scene, we would very quickly be in the situation where the costs of salvage would exceed the value of the yacht, i.e. we would lose money. Therefore we would want a scopic clause allowing us to terminate at such a point.
(As it happens, being SAR salvors we don't work under LOF anyway, but that's a different matter...)
Lots of info here : http://www.lloyds.com/Lloyds_Worldwide/L...en_Form_LOF.htm
Any other queries drop me a PM.
Simon

 

[captainslarty]

Re: LLoyd\'s Open Form

Look dude... /forums/images/graemlins/laugh.gif

at that point in time he could probably shag yer wife if it meant saving the boat !.. sign the bloody thing /forums/images/graemlins/smirk.gif /forums/images/graemlins/smirk.gif

 

[chanelyacht]

Re: LLoyd\'s Open Form

Also be careful about whether your insurance allows you to sign an LOF without reference to them - it may well preclude this, or at least severely limit their liability if you chose to do so.
Is this a theoretical or real example?

 

[Malabar]

Re: LLoyd\'s Open Form

All the advice above much appreciated. Thankfully 'tis a hypothetical situation. Most of my notes predate the LOF 2000. Take the average yachtie, hit them with a big wave one moment, and a straight question "Is the SCOPIC agreement incorporated etc etc. Not really fair! Personally, while I think I am reasonably up to speed on LOF in general, the SCOPIC aspect is new to me. Something that is rarely discussed outside professional Salvage/P&I circles?

 

[mormargh]

Re: LLoyd\'s Open Form

Not convinced. Might be sound premise in respect of commercial vessels, but think you would have a job on your hands enforcing SCOPIC provisions in the case of a "consumer".

In the instance described, Owner/skipper has a duty to mitigate their loss in the event of a potential claim, and should therefore accept offer of assistance.

 

[wenley]

Scopic clause

Hello Malabar,

The Scopic clause was added to the LOF 2000. It refers to article 14 of the 1989 Salvage Convention. It provides that salvors ('Contractors') could receive Special Compensation (ie their expenses and a fair rate for tugs and equipment used in salvage operations; the fair rate excluding any profit as the House of Lords stated in The Nagasaki Spirit; Semco Salvage & Marine Pte Ltd vs. Lancer Navigation Co Ltd, 1997 - in certain circumstances - risk of serious hazard from contamination in coastal or inland waters or areas adjacent thereto - where the salved fund was insufficient to allow them to recover adequate remuneration.

Today, the Scopic clause has been developed as an alternative to article 14 for dealing with special compensation. One of the main changes contained in the Scopic Clause is that the salvor may invoke the special provisions of it at any time of his choosing, regardless of the circumstances. He does not have to prove environmental threat and no geographical restriction applies. The assessment of the Scopic remuneration begins at the time of such notice. Prior to such invocation, salvage is undertaken on a "no cure no pay" basis without any safety net.

So, considering your circumstances, try to avoid the Scopic.