disagreement over the level of risk, peril,
and effort involved in rescuing the boat.
Of the nearly 70,000 BoatU.S. members who find themselves in need of basic
towing and soft ungrounding each year,
the vast majority are sent on their way
at no charge because they’ve opted to
carry Unlimited Towing as part of their
BoatU.S. membership. Salvage is not covered by the BoatU.S. Unlimited Towing
program, but fortunately, incidents involving salvage and hard groundings are only a
very small percentage of the annual cases.
A good marine insurance policy should
provide you with full salvage coverage
for those times when more than a tow is
needed. Boaters who are not insured, or
have inadequate coverage, may someday
find themselves in need of salvage and
faced with a large salvage bill.
When there’s a dispute over what the
fair and reasonable value of the salvage
claim is, it’s normally settled through
negotiations between the towing company and the boat owner’s insurance
company. But if there’s no insurance, or
if negotiations break down, the BoatU.S.
Salvage Arbitration Plan can help resolve
disputes objectively, quickly, and inexpensively by putting the decision-making in
the hands of knowledgeable marine professionals who review the facts and reach
a settlement based on admiralty law.
How it works
In 1804, U.S. Supreme Court Chief
Justice John Marshall declared, “If property is exposed to peril or hazard at sea
and is saved by the voluntary exertion of
any persons whatsoever … a very ample
award will be bestowed in the courts of
justice.” This is the basic principle that
still guides salvage
law today. These
laws are designed
to encourage seamen to render
prompt aid to vessels and property
in peril at sea. For
more than 200
years, courts have
made awards based
on several factors.
tion Plan has been
using the same criteria and resolving
disagreements since 1989. Originally
designed to assist in the settlement
of disputes between salvors and insur-
ance companies, it’s also available to
any boat owner and is designed to
avoid costly and drawn-out litigation
in court. BoatU.S. plays no role in the
decision-making process; our function is
administrative, facilitating communica-
tions and keeping the parties on a timely
track toward a resolution.
Modeled after other arbitration plans,
the BoatU.S. Salvage Arbitration Plan
is an expedited and inexpensive way
to resolve salvage claim disputes. Each
party selects an arbitrator from a list of
admiralty attorneys and marine professionals (salvors, marine surveyors, and
so on) who are experienced in salvage
matters. The two arbitrators then select
a third, who is always an experienced
admiralty attorney, and the three-person
panel reviews all facts as presented by
the two parties. There are no direct communications between the parties and the
arbitration panel; all communication is in
to learn more
get a fast, free
quote on a new
writing, and there is no in-person testi-
mony. Each side is given the opportunity
to rebut information given by the other.
The plan saves both parties money,
often a lot of money. Rather than pay
hourly attorney rates and court costs,
which can quickly add up to tens of thou-
sands of dollars, per-party fees for the
arbitration service are capped at $2,750,
plus $175 that goes to BoatU.S. strictly for
administering the program. The rest goes
to the arbitrators. And unlike Admiralty
Court proceedings, which can drag on
for years, settlement awards are decided
no more than 12 weeks after the panel
is convened. Because both parties have
already agreed that the panel’s decisions
are binding, there is no lengthy appeal
process to prolong the proceedings.
If you ever find yourself in need of
a salvor’s services, don’t hesitate to call
someone to rescue your boat. Most of the
time the salvor’s time and effort is charged
fairly. When there’s a disagreement and
you don’t have an insurance company to
negotiate for you, the BoatU.S. Salvage
Arbitration Plan is here to help.
Factors that influence award size
The salvaged vessel’s post-casualty value. How much the vessel is worth after it
Weather and sea conditions. Rough seas and strong winds make salvaging more
challenging and increase the award.
Degree of risk involved. If there is no immediate danger to the vessel or her crew,
the award may be lower. However, if the weather is severe or the vessel is being driven
toward rocks, for example, the risk and therefore the award will typically be higher.
The salvor’s skill, experience, promptness, and expertise. Professional salvors typi-
cally have a high level of skill and expertise and get on scene as quickly as possible. This
factor is designed to weed out a casual boater offering assistance, or someone who sud-
denly becomes a salvor when he or she believes there may be a substantial award.
The salvor’s time, equipment, expenses, and losses. The effectiveness of the sal-
vor’s equipment, their expenses, and losses, such as spill kits and damaged equipment,
and the amount of time involved in a salvage operation are considered in the award.
Environmental damage avoidance. Environmental fines for oil spillage and reef or
sea-grass damage can be in the hundreds of thousands of dollars, and the effort a sal-
vor puts into preventing such damage is taken into consideration in deciding an award.
Measure of success. Was the salvage effort completely successful, and did it cause
no further damage to the vessel?
The value, readiness, and efficiency of the salvor’s vessel. A typical small salvage and
towing vessel can cost well over $100,000, and larger ones several times that. Salvors also
have to invest in high-priced commercial towboat insurance, pumps, oil spill kits, lines, and
other emergency equipment, which can push their investment to well over $1,000,000.
Prevailing prices and awards for comparable salvage and services. Awards are not
likely to be much different from awards for similar operations. Low-order salvage, such
as a hard ungrounding, may command awards around 5 to 10 percent of the post-casu-
alty value. Salvaging boats sunk in open water will be considerably higher. — C.F.