Salvage Law and the Salvors' Compensation

Salvage law has evolved over centuries, and has its origins in antiquity. Laws concerning maritime
salvage are found within the Edicts of Rhodes, the laws of the Romans, the Justinian Digest, the
Medieval Laws of Oleron, the Code of the Hanseatic League and were of such significant
importance as to be jurisdictionally determined within the Constitution at the founding of the
Republic. Salvage law existed then, existed at the time of the Republic's collision and foundering,
and exists today.

A cornerstone principal of salvage law is that the successful efforts of a salvor who has voluntarily
risked himself and his property to save lives, ships and property of others imperiled at sea - should
be amply rewarded. This policy not only promotes the social and humanitarian benefits of the
saving of life and property at sea, but also preserves and enhances maritime commerce.

Justice Story summarized it well, as he so often did:

"In cases of salvage, the measure of reward has never been adjusted by a mere estimate of the
labor and services performed by the salvors. These, to be sure, are very important ingredients;
and are greatly enhanced in value, when they have been accompanied by personal peril and
gallantry, by prompt and hardy enterprise, and by severe and long-continued exposure to the
inclemencies of the winds and waves. But an enlarged policy, looking to the safety and interest of
the commercial world, decrees a liberal recompense, with a view to stimulate ambition, by holding
out what may be deemed an honorable reward."

Indeed, the law of salvage is so well settled that it is sometimes said to be the jus gentium or the
international law of the sea. Under this well settled doctrine of international law, salvage service is
one which is rendered voluntarily to a vessel which needs assistance and which is designed to
relieve her from some distress of danger either present or to be reasonably apprehended. As set
forth by the U.S. Supreme Court:

"Salvage is the compensation allowed to persons by whose voluntary assistance of a ship at sea
or her cargo or both have been saved in whole or in part from impending sea peril, or in
recovering such property from actual peril or loss, as in cases of ship wreck, derelict, or recapture.

In order to have a valid claim for having rendered salvage services, the salvor must show that:
1. the property saved was imperiled;
2. his services were voluntarily rendered (the salvor was under no legal or official duty to render
assistance); and,
3. his efforts, in whole or in part, contributed to the saving of the property."

The Courts have given "peril" wide latitude. It is well settled that the peril necessary to constitute a
salvage service need not be one of "imminent and absolute danger." It is enough that the property
is in danger, either presently or to be reasonably apprehended. "A situation of actual
apprehension, though not of actual danger, is sufficient." It is important to note that it is not the
degree of peril that makes for salvage service. If distress or peril is present then, accompanied by
voluntary service and success, a valid salvage service has been performed, entitling the salvor to
a salvage award. The degree of peril, whether slight, moderate, or severe, affects only the amount
of the award, but not the entitlement of the salvor to a salvage award.9

While the typical act of salvage involves the rescue and tow of a vessel at sea, the range of
situations that can constitute salvage is quite broad. Among examples of salvage are the following:
the escorting of a distressed ship to a position where aid can be rendered; giving information on
how to avoid an obstruction such as an ice floe or to avoid running aground; carrying a message
which results in the provision of emergency assistance. In general, it can be said that, so long as a
vessel is in danger, almost any voluntary act that contributes to its ultimate safety or rescue may
qualify as an act of salvage.

A salvor who has earned the right to a salvage award for the successful voluntary salvage to a
vessel in peril has a preferred maritime lien on the vessel.

The Salvage Award

Salvage awards are given for the salvage of property, not life. Salvors of human life, however, who
have taken part in the services rendered on the occasion of the accident giving rise to salvage,
are entitled to a fair share of the remuneration awarded to the salvors of the ship, her cargo and
accessories. In other words, the trial court will also consider moral as well as economic issues.

The Courts have traditionally followed the long standing guidance provided by the Supreme Court
more than a century ago in their computation of a salvage award. In The BLACKWALL, Justice
Clifford set out the six factors to be considered in determining the amount of the salvage award.
The Second Circuit has arranged them in descending order of importance as follows:

 1. The degree of danger from which the vessel was rescued;
 2. The post-casualty value of the property saved;
 3. The risk incurred in saving the property from impending peril;
 4. The promptitude, skill and energy displayed in rendering the service and salving the property;
 5. The value of the property employed by the salvors and the danger to which it was exposed;
 6. The costs in terms of labor and materials expended by the salvors in rendering the salvage
service.

The items taken into account in assessing the value of the property saved include not only the
ship, but also her freight and cargo.

In considering its award, the court not only considers the peril immediately faced by the vessel but
the dangers presented by the situation that might have forseeably developed but for the actions of
the salvors.

Public policy is that salvage awards should be liberal in the form of a "reward,” not quantum meruit.
Public policy dictates that a salvor's award should be such as to encourage others to aid vessels in
distress. "Public policy requires that such a promise of reward should be held out, in case of
success, that all those in a situation and competent to render relief, shall be eager to do so from
the mere hope of gain." The salvage award should be neither too much nor too little. It must be
sufficiently liberal to encourage salvors but not so high as to discourage vessel owners from
seeking assistance.

End