What am I signing when a salvor offers a line?

There is a difference between a tow and a salvage, and it is not decided by how the boat got there. A tow is a service at an agreed price: an engine that will not start on a flat day, a line from a friend, a call to a commercial operator you pay by the hour. Salvage is help given to a vessel in real danger, and the law has always treated it differently, because the person who comes out in bad weather takes a risk and is entitled to be rewarded for it. The lifeboat is the exception every owner in the British Isles knows: the RNLI is a charity, it does not charge, and it does not claim salvage.

A commercial salvor will. If the contract is negotiated freely while the boat is aground and the swell is building, the owner has no bargaining position at all, and a figure that reflects the moment rather than the work is the predictable result. Lloyd's Open Form exists for exactly that. It is a short standard form, used in shipping for well over a century and revised from time to time, and it rests on two ideas. The first is no cure, no pay: if the property is not saved, nothing is owed. The second is that the amount is never settled at the scene. It is fixed afterwards by arbitration in London, on the value of what was saved, the danger, the skill and the effort involved.

One clause changes the first idea and has to be understood before it appears: SCOPIC. Where it is invoked, the salvor is paid at fixed daily rates for people and equipment even if the salvage fails, so no cure, no pay no longer applies to that part. The purpose is environmental, since otherwise nobody would touch a hopeless wreck that is leaking fuel, and it is the salvor who invokes it, typically where the boat has little value left or the pollution risk is high. Practical steps, then: keep a copy of the form aboard with your insurer's number, and before signing anything, call. Out of hours too, on +49 3375 29 28 95. Ask whether this is salvage or a tow, tell your insurer the moment SCOPIC is invoked, and read your own conditions beforehand to see how salvage charges are treated. With us, a salvage award for saving the boat from a covered loss counts as the cost of averting or reducing it and is paid even beyond the sum insured. Salvage ordered by an authority is covered on top, up to the sum insured in Basis, 1 million euros in Basis Plus and 2.5 million euros in Premium.

Worth remembering

The form takes the figure out of the worst hour of the day and gives it to an arbitrator who was not standing on your deck.