Salvage

Vessel owners often find themselves in trouble due to problems encounter with their vessels. For example, vessels sink at their dock, causing oil and an other pollutants to become discharged into the water. On other occasions vessels run aground, have problems on a voyage or are abandoned at sea. When these types of events occur, mariners often need the assistance to clean up or prevent the oil spill, to remove the vessel from the beach, raise the vessel or locate the vessel and return her to shore.

The general maritime law has developed a special body of law entitled the law of salvage to handle these situations. Salvage is defined as an action involving a salvor who voluntarily saves life and property at sea. In a typical salvage case, a vessel renders assistance to another vessel that has become disabled, but has not yet sunk. To determine that a salvage service (as distinct, for example, from a towing service) was performed, a court must find three (3) specific elements: marine peril to the vessel being salvaged; service voluntarily rendered, not required by duty or contract; and success, in whole or in part, with the services rendered having contributed to such success. The peril necessary to give rise to a claim for salvage must be present and impending, although it need not be immediate or absolute. In The Santa Rosa , 295 F. 350 (E.D.S.C.1924), a distressed vessel ran aground off the coast of South Carolina. Although there was no immediate danger, the ship was exposed to "all the possibilities, if not probabilities," of perils faced by a grounded vessel. Id. at 354. "A situation of actual apprehension, though not of actual danger, is sufficient for a salvage award."

The second element is voluntary service. Voluntary service, the sine qua non of marine salvage, is rendered in the absence of a legal duty or obligation. Whatever motive impels the true volunteer, be it monetary gain, humanitarian purposes or merely error, it will not detract from the status accorded him by law.

A professional salvor is someone or a company that is engaged in the salvage business who maintain vessels and crews especially for this purpose. Their vessels carry special equipment for use in salvage operations. "In order to carry out this highly technical activity the companies maintain expensive vessels, special equipment adapted for salvage purposes and men of considerable skill and speciality trained for this oft times dangerous work. Although salvage work is their business, the professional salvage company is nevertheless a volunteer when responding to a call for aid.." Thus, professional salvors - who perform their services for monetary gain - may claim salvage awards.

The final component is success in whole or in part with the service rendered by the salvor having contributed to the ultimate success. Lack of success precludes the granting of a salvage award. The underlying rationale for this rule is that the purpose of engaging in a salvage operation is to render a beneficial service to the owner or vessel. When no benefit is conferred, the salvor is precluded from obtaining a reward.

Due to the danger of the sea and the mutual interest of seamen to transverse the sea notwithstanding its dangers, the law of admiralty for thousands of years have uniformly held that those who voluntarily perform salvages are entitled to be rewarded for their efforts. "[T]he law of admiralty for almost 3,000 years has uniformly held that those who voluntarily come to the assistance of fellow seamen in distress and perform salvage are entitled to be rewarded."

The "policies of salvage law have existed as an important part of the general maritime law of nations as long as there has been navigation. The Fourth Circuit Court of Appeals has clearly interpreted the general maritime law as requiring salvers to be rewarded for their services.The principles of salvage law are intended to encourage persons to render prompt, voluntary, and effective service to ships at peril or in distress by assuring them compensation and reward for their salvage efforts. See The Akaba , 54 F. 197, 200 (4 th Cir. 1893). Absent the promise of compensation and reward, we question whether a party, even one with the capacity to save the Titanic itself, would incur the costs to do so. See M/V JA Orgeron , 143 F.3d at 986 n. 12 (observing that "if the costs of performing a salvage are too high or the benefits to be derived are too low, the parties might well agree to call it a day and let the sea claim its prize").

"Compensation as salvage is not viewed by the admiralty courts merely as pay, on the principle of a quantum meruit, or as a remuneration PRO OPERE ET LABORE, but as a reward given for perilous services, voluntarily rendered, and as an inducement to seamen and others to embark in such undertakings to save life and property.." Salvors may be entitled to liberal salvage awards where "such awards often exceed the value of the services rendered..." An award for salvage generally far exceeds a mere remuneration of the labor expended by the salvor with the excess being intended not only to reward the specific salvor, but to encourage others in similar circumstances to save property exposed to the perils peculiarly incident to the sea.

"An award for salvage 'generally far exceeds a mere remuneration pro opere et labore -the excess being intended, upon principles of sound public policy, not only as a reward to the particular salvor, but, also, as an inducement to others to render like services.' " "The law of salvage presumes that the owner desires the salvage service." And it is the assurance of compensation and reward that provides the "inducement to seamen and others to embark in such undertakings to save life and property."

"Public policy encourages the hardy and adventurous mariner to engage in these laborious and sometimes dangerous enterprises, and with a view to withdraw from him every temptation to embezzlement and dishonesty, the law allows him, in case he is successful, a liberal compensation."(emphasis supplied). "If the salvor fails in his salvage efforts, however, he can claim no compensation or reward."

A professional salvor is entitled to a more liberal award than a chance salvor. This view results from the realization that professional salvors possess unique skills and must maintain expensive equipment particularly suited for dangerous salvage work. Courts have held that in order to encourage the saving of life and property at sea the awards decreed to professional salvage companies are generally on a liberal scale.

The skill that comes from long experience, joined with more powerful machinery, and devices specially adapted to the purpose in hand, are of more service to an imperiled vessel than is the aid which may be expected from a chance rescuer. To provide such skill, machinery, and appliances, and to keep them always ready for instant service, though they may be called for but occasionally, is now regarded as a meritorious act, calling for a liberal award.

In recognizing the cost to professional salvors in maintaining vessels and salvage equipment at the ready to conduct salvage operations at a moment's notice, one court said:

The Salvage Chief [salvage vessel] is kept in readiness at all times for the purpose of going to the assistance of stranded vessels whenever called upon. She is used solely in salvage work and is apparently the only purely salvage vessel in the United States not assisted by government subsidy. As has been held by courts generally in the past, one who maintains an expensive salvage vessel with expensive salvage equipment thereon (as in the case of the Salvage Chief) and who also maintains the vessel and equipment at great expense at all times for the purpose of being able to promptly go to the relief of a stranded vessel (as in the case of the Salvage Chief) is entitled to a more liberal salvage award than the mere casual salvor. Were it not so, there would be no encouragement to the owner of such professional salvage vessel to provide such available salvage equipment and to maintain it always in available status. One must also note that the Salvage Chief is called upon to perform salvage services only from time to time as the need arises; nevertheless the cost of maintenance of the Salvage Chief, with her crew, and in state of readiness, goes on, day after day.

The United States Supreme Court in The Blackwall , 77 U.S. at 14 has listed six (6) "main ingredients" admiralty courts use when fixing an award for salvage:

1. The labor extended by the salvors in rendering the salvage services;

2. The promptitude, skill, and energy displayed in rendering the salvage services;

3. The value of the property employed by the salvors in rendering the services and the danger to which such property is exposed;

4. The risks incurred by salvors in securing the property from the impending peril;

5. The value of the property saved; and

6. The degree of danger from which the property was rescued.

"When evaluating the final factor, considerable significance must be given to whether the salved vessel was derelict at the time." The United States Supreme Court in defined a derelict vessel as follows:

At the time when the Island City [the salvaged vessel] was taken possession of by the Westernport the latter vessel was not in the possession, actual or constructive, of her own crew, or of any salvor. She was derelict in the true sense of the law of salvage. She lay in an open sea, held by an insufficient anchor, surrounded by shoals, dismasted, without a rudder, and with no one on board. She was deserted, abandoned, forsaken. In our law, the word derelict has not the intense signification which it bore in the civil law. It does not mean that the owner has renounced title, but merely that the thing has been deserted, though it may be with the hope of returning. The test is not the hope but the power of resuming possession. In the case of a derelict vessel the title remains in the owner, with a temporary right of occupancy for salvage in the finder. It is doubtful if the crew of this vessel could have been compelled to return. Their ability to do so certainly depended on the weather, and every circumstance that increased the peril of the barque made their return less probable.

"The fact that a vessel is derelict implies a higher degree of danger in its rescue and, thus, tends to raise the amount of award to the salvors." "Public policy is to encourage volunteers in the salvage of derelict, abandoned or distressed property. For this reason salvage awards in generous amounts have traditionally been given to successful salvors."

Another important factor to take into consideration in determining the amount of the salvage award is that an abandoned vessel presents an obstruction to navigation and is a likely danger to commerce. A vessel adrift and abandoned in shipping lanes has held to be "derelict property" for salvage purposes.

Maritime salvage is a necessary part of daily life on the water. Without people and companies willing to engage in salvage activities, lives, cargo and vessels would be lost. Salvage is a very unique area of the maritime law. S. Scott Bluestein, Esq. has handled numerous vessel salvage cases and has a firm understanding of the general maritime law on salvage.