LOF 2011By james tweed • May 31st, 2011 • Category: IGPI
Lloyd’s Open Form (LOF) provides a regime for determining the amount of remuneration to be awarded to salvors for their services in saving property at sea and minimising or preventing damage to the environment.
Following the Lloyd’s Salvage Group meetings in 2010 and March 2011, a new LOF, to be known as LOF 2011 (click here for a full copy) incorporating updated Lloyd’s Standard Salvage and Arbitration (LSSA) Clauses (click here for a full copy), has been published. This amends and updates the previous version, the LOF 2000 and the incorporated LSSA Clauses.
In brief, the changes are as follows:-
1. LOF 2011
(i) Details of LOF Awards to be published on Lloyd’s web-site
(ii) LOFs must be notified to Lloyd’s
2. LSSA Clauses
(i) Security for Arbitrator’s and Appeal Arbitrator’s Fees
(ii) Details of LOF Awards on Lloyd’s web-site
(iii) Special Provisions for Salved Cargo consisting of Laden Containers
With regard to the Special Provisions for Laden Containers in para 2(iii) above, the changes took into account widespread concerns that the costs incurred in collecting salvage security from low-value cargo interests in cases involving container (multi-bill of lading) vessels were disproportionate to their proportion of any salvage award or settlement. The intended effect of the changes is to reduce the cost of collecting salvage security and obtaining an Award against the unrepresented cargo by:-
Allowing salvors to apply to the Arbitrator to excuse any cargo below an agreed value from any liability for salvage where the cost of including it is likely to be disproportionate to its proportion of any Award or settlement.
Allowing salvors to apply to the Arbitrator to bind the unrepresented cargo to the terms of the settlement agreement where the agreement has been reached with owners of at least 75% by value of the salved cargo.
Allowing any appropriate notices to be sent to the party (usually the cargo insurers) that has provided the salvage security (rather than individual owners of the salved property as required by the provisions of the Arbitration Act 1996).
For a detailed explanation of all the changes in LOF 2011 and LSSA Clauses, please click here.