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To Salvage or to Tow
By Tim Akpinar

Picture yourself in this situation. You’ve fouled a prop on a crab line line and drifted hard aground. Some
teenagers in an outboard skiff come over to see if they might be able to help. After a few unsuccessful
attempts that nearly burn out their lower unit, they give up. But they weren’t the only ones who noticed
your predicament. Shortly after they leave, a commercial tow vessel appears, hails you, and asks if you
need help.

Your sentiments are mixed. You’re angry and embarrassed with yourself for snagging the crab pot, you’re
relieved at the prospect of rescue, and you’re anxious and concerned about what the affair will end up
costing you.

“I’ll tow you out of there, but you’ll need to sign a salvage contract”, the tow boat captain says.
“Salvage contract….what will that involve?” you wonder. Although you have basic inkling of what salvage
is, you realize this guy has performed more salvages than you have. What you do and say from this point
on can make a big difference in what this mid-summer mishap is going to cost you.

Boat owners need to be aware of the line between towing and salvage. You may pay annual dues for
membership in a towing service. This is for things like a simple tow if you run aground on a soft sandbar,
overheat your engine, or run out of fuel. Salvage coverage, on the other hand, is a component of a good
marine insurance policy for protecting you against a salvage claim from a salvor (rescuer). A towing bill
might mean two hours charged at $160 per hour…but a salvage claim can mean that someone is
asserting a claim for 20 or 25% of the post-casualty value of your vessel. That’s a big difference!

Traditional marine salvage takes place when there is (1.) a marine peril, (2.) voluntary act by the salvor,
and (3.) salvor’s efforts to save persons and property are successful. The concept evolved to provide a
strong incentive for someone to come to the assistance of a stricken vessel. The salvor (rescuer)
asserts a claim against the vessel as a reward for her salvage efforts.

How is the dollar amount of a salvage award determined? The guidelines followed by judges, marine
arbitrators, and towing companies come from maritime case law and the Salvage Convention of 1989. If
you look through salvage decisions, you’re likely to see judges cite The Blackwall, shorthand for an 1869
Supreme Court ruling that still holds sway.

The Blackwall lists these factors for determining a salvage award:

(1.) The labor expended by the salvors in rendering the salvage service
(2.) The promptitude, skill and energy displayed in rendering the service and saving the property
(3.) The value of the property employed by the salvors in rendering the service, and the danger to which
the property was exposed
(4.) The risk incurred by the salvors in securing the property from the impending peril
(5.) The value of the property saved
(6.) The degree of danger from which the property was rescued

The 1989 Convention modernized the traditional elements by adding “the skill and efforts of the salvors in
preventing or minimizing damage to the environment” as well as several other provisions. Keep in mind
that in the day of the Blackwall, we didn’t have oil and chemical tankers in the proportions of today’s
vessels.

Because salvage law applies to both recreational and commercial vessels, the priorities of these factors
can vary with the size and type of vessel.

Let’s return to your situation with the hard grounding. You ask the tow boat captain how he will bill you for
this job. He explains that after he pulls you off the jetty, he’s going to submit a claim to your insurance
carrier for his services.

You ask, “Why can’t you treat this as a tow?”
He responds, “This isn’t a towing job. You’re on rocks. It would be different if you slid up a sandbar.”
As you wonder what to do, the captain follows up, “It’s totally up to you, sir. We’ll do what you want us to
do.” This brings home the point that salvage is a voluntary act. You can’t be forced to accept a salvage
operation. You’re free to ask this captain to leave if you have another commercial towing service in mind.
However, you’ll be responsible for the removal of the vessel if “inaction” is your course of action.

You can call your insurance company and hope to find someone with knowledge and experience to
advise you. But that’s not likely to happen at 2:00 o’clock on Sunday. You could engage in negotiations
yourself. But you don’t have a feel for what constitutes a 15% salvage job, 20% salvage job, 25% salvage
job. You quickly realize the disadvantaged position from which you’d be negotiating.

You could attempt to negotiate for the captain’s services to be performed at a flat rate for the job, or on an
hourly basis. The captain might insist that your situation is beyond one where he would do it for a flat fee
of $2,000…or an hourly rate of $200. However, if you do manage to come to an agreement on such a
basis, you should put it in writing.

Another option is to enter into a “no cure, no pay” open form salvage agreement, putting your faith in the
system to determine an appropriate award based upon the traditional factors outlined earlier. “No cure,
no pay” is a concept of maritime law where the salvor is granted a reward for a successful effort, but
nothing if he or she is unsuccessful.

Using the open form reserves the haggling for another day. And for people who have a better
understanding of the subject matter…your insurance carrier’s representatives or attorneys. They’ll know
how to take things like adverse wind and sea conditions, the introduction of salvage pumps, the
prevention of environmental damage…and translate them into dollar values or percentages.

Even if you feel confident in haggling over a percentage of a boat worth over six figures, you may be faced
with conditions that make it difficult, or even foolish, to do so. Sea conditions may be deteriorating, or an
imminent storm might endanger the safety of your crew. Since we could be dealing with things like
outgoing tides, fading daylight, unyielding objects such as reefs, a window of opportunity for an
economical salvage action might be narrow in duration.

After contemplating the situation for a few minutes, checking the tide tables, thinking about the weight of
your fully fueled boat settling further on these unfriendly rocks…you painfully come to the conclusion that
your peril is an imminent one, and that your hesitation will only heighten the chances for serious damage
to your hull and rudder. Aggravated by both the physical damage to your boat and the mental stress to
your nerves, you give a sigh of relief as you agree to the open form.

After your boat is out of danger, you wonder what will happen if your insurance company and the salvor
are unable to agree upon the salvage fee. The dispute could be submitted to binding marine arbitration, or
could be litigated in court. In either case, both sides will live by the decision, unless there are grounds for
appeal. Arbitration is generally less expensive and more streamlined than litigation in court. In either
case, salvage proceedings will apply federal maritime law, sometimes to the exclusion of legal principals
familiar to us in state civil court.

Keep in mind that what was said and done in your dialogue with the salvor will be admissible as evidence
at an arbitration or trial. The court may be given a CD with the audio transcript of your conversation,
complete with radio crackle and every “umm” and “uhh”. The court may also be presented with a video
record of the salvage job.

Commercial towing services such as Sea-Tow or BoatU.S. are not the only entities that perform towing
and salvage operations. A commercial fishing trawler returning from sea can assert a salvage claim after
assisting a stricken megayacht…and vice versa. Anyone on their own personal vessel can be a salvor
(rescuer) as well as a salvee (stricken). However, there are people excluded from asserting a salvage
claim because of their pre-existing duty to rescue, such as the Coast
Guard or police. Additionally, a vessel with a contractual obligation cannot turn around and assert a
salvage claim since that would also be considered a pre-existing duty.

Applying salvage law sometimes results in situations that don’t always leave everyone happy in the end. A
boat owner might feel outrage at the thought of a salvor making a “windfall” 20% of his $300,000 yacht for
coming alongside and utilizing high capacity pumps and emergency patches for five or six hours. More
than one disgruntled boat owner has likened his salvage experience to piracy. However, courts will point
out that without the efforts of the salvor, the vessel would be sitting on the ocean floor. Also, a salvor
faces the possibility of risking and investing manpower and equipment to ultimately fail…and have no one
to whom to present a bill for the unsuccessful endeavor.

The most important thing to be learned from this discussion of salvage law is to be prepared, and a large
part of being prepared means being insured. Check your policy to confirm you have towing coverage and
salvage coverage. If you don’t have towing coverage, look into enrollment with a commercial towing
service. As for your salvage coverage, make sure it reflects the full current value of your vessel and that
it doesn’t have a ruinous deductible. And in preparation for the worse, where the boat might become a
hazard to navigation and must be removed, make sure you are insured for wreck removal.















Tim Akpinar, a licensed merchant marine officer, is a maritime attorney on Long Island who handles
recreational boating cases throughout the United States. His last boat was a Pearson 26. www.
mycounsel.us
Chesapeake Bay Magazine, Feb. 2007
TO
SALVAGE
TO TOW?

The general operation may appear
similar but the difference under the
law -  and what it may cost you -  can
be significant

By Tim Akpinar

reprinted with permission from
Chesapeake Bay Magazine
Don’t Try This On Your Pals

Seeing a fellow club member grounded on a shoal after reading this article, you now regard yourself as
a salvor rather than a good neighbor. After you pull them off a sandbar, they show their gratitude with
an invitation to dinner. However, you decline, instead surprising them with a claim for 20% of their
Grand Banks 32. While it wouldn’t be the best way to stay friends with people you regularly see on the
fuel dock, bringing such an action is permissible under salvage law. But if you decided to moonlight as
an opportunity salvor, you would receive smaller awards than a professional salvor. The additional
margin in salvage awards reserved for professionals stands as an incentive to maintain powerful
vessels, expensive equipment and monitor air waves for boaters in distress.
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