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What does no cure – no pay mean? |
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Exactly what it says! Traditionally, a salvor
is rewarded for successful salvage services to the ship and its
cargo. There is no reward in the absence of salved value. Today,
however, procedures exist which, if incorporated into the LOF
and invoked by the salvor, ensure that the salvor does not make
a loss. In this way salvors are encouraged to respond to all
casualties threatening pollution. |
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When is LOF appropriate?
|
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Whenever there is no time to lose and significant property loss or damage, with resultant pollution, is to be averted. The very essence of LOF is its promotion of an immediate response.
|
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Is the contract fair?
|
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Yes. This is one of the reasons why LOF has survived the passage of time. Most cases are settled without recourse to arbitration. Lloyd’s Arbitrators are experienced and impartial. Should the outcome of arbitration be disputed, there is recourse to an appeal procedure.
|
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Is LOF too expensive?
|
| - |
The impartial Arbitrator has the job of matching reward to service.
He is required to take into consideration criteria which weigh
up a broad spectrum of factors, such as the outcome in terms
of salved value, the degree of hazard faced by the
ship and cargo and, in addition, the salvor’s long-term commitment
to the maintenance of salvage capability. |
| - |
The average revenue (Awards and settlements) under LOF since
1978, when ISU began collecting data,
has been 7.9% of salved values.
|
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What is SCOPIC?
|
| - |
It is an industry system for rewarding salvors who respond to
casualties in high risk/low value situations. The SCOPIC (Special
Compensation P&I Club) Clause has superseded the Article 14 Special
Compensation system introduced in The Salvage Convention, 1989.
Article 14 was found to be difficult and expensive to apply.
|
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Under what circumstances is SCOPIC used?
|
| - |
Governments are reluctant to rely entirely on the salvor’s willingness to assume all-or-nothing no cure – no pay risks when responding to pollution threats. It is recognised that financial incentives are required, to ensure salvors respond in highly adverse circumstances and are not deterred by the risk of financial loss. SCOPIC was a further development of the “safety net” principle. It is used in around 20 per cent of casualty response cases – when property values are low and/or the risks excessively high, so reducing the prospects of an adequate conventional Salvage Award.
|
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Is SCOPIC fair to all parties?
|
| - |
SCOPIC is an inter-industry agreement, negotiated between P&I Clubs, property underwriters, shipowners and salvors. Its function is overseen by a joint industry group. All parties to SCOPIC are committed to the resolution of issues by means of discussion and negotiation.
|
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What is an SCR?
|
| - |
An SCR, or Special Casualty Representative, is appointed
by the shipowner to attend a LOF salvage operation, when the
SCOPIC Clause has been invoked. He represents the interests
of all parties. The SCR reports to all concerned on an impartial
basis. Any difference of opinion on operational matters will
be recorded by the SCR and reported to all parties. During
the course of a salvage, the Salvage Master and SCR cooperate
closely, although the Salvage Master remains, at all times,
in command of the salvage operation. |
