The term salvage refers to both the act of rescuing cargo in peril at sea, and to the liability for expenses and monetary reward owed to the rescuer by the carrier's owner.
Salvage presents an oddity of the law. As pointed out by Grant Gilmore in The Law of Admiralty, the common law recognizes no requirement nor any reward for the saving of a life on land. Conversely, in regards to the saving of cargo in peril at sea, the rescuer is entitled to expenses and a handsome reward (salvage - see International Convention on Salvage 1989).
In any event, the principle of compensation for those that salvage is ancient.
In Re The Fusilier, the House of Lords addressed the public policy behind the doctrine of compensation for salvage operations:
"Salvage is not governed by the ordinary rules which prevail in mercantile transactions on shore. Salvage is governed by a due regard to benefit received, combined with a just regard for the general interests of ships and marine commerce. All owners of ships and cargoes and all underwriters are interested in the great principle of adequate remuneration being paid for salvage services...."
"The formal requisites of an act of salvage bear a close family resemblance to those of a general average act.
"There must be a maritime peril from which the ship or other property could not have been rescued without the salvor's assistance.
"The salvor's act must be voluntary - that is, he must be under no official or legal duty to render assistance.
"The act must be successful in saving, or in helping to save, at least a part of the property at risk.
"The property has been abandoned or become derelict, anyone may put himself forward as salvor; if the owner subsequently claims the property, he takes it subject to the salvage claim.
"On the other hand, so long as the owner, or his agent, remains in possession, he is entitled to refuse unwelcome offers of salvage - an aspect of the doctrine which, when coupled with judicial generosity in making salvage awards, gives commercial base to the gallant behavior of masters who remain aboard otherwise abandoned ships while waiting for the owner's tugs to show up and undertake the rescue....
"So long as the ship is in peril, any voluntary act which contributes to her ultimate safety may rank as an act of salvage."
Entitlement to salvage award does not require proof of a contract; it is more in the nature of a liability on the part of the ship owner once the requirements of salvage have been met.
An Assistance and Salvage Convention of 1910 met with some acceptance and was replaced with the 1989 Salvage Convention. The International Maritime Organization describes the two as follows:
"The (1989) Convention replaced a convention on the law of salvage adopted in Brussels in 1910 which incorporated the 'no cure, no pay' principle under which a salvor is only rewarded for services if the operation is successful.
"Although this basic philosophy worked well in most cases, it did not take pollution into account. A salvor who prevented a major pollution incident (for example, by towing a damaged tanker away from an environmentally sensitive area) but did not manage to save the ship or the cargo got nothing. There was therefore little incentive to a salvor to undertake an operation which has only a slim chance of success.
"The 1989 Convention seeks to remedy this deficiency by making provision for an enhanced salvage award taking into account the skill and efforts of the salvors in preventing or minimizing damage to the environment."
In addition to expenses, a salvor is entitled to a reward which is determined and, where applicable, apportioned between the ship owner and cargo owners, if different, on a case-by-case basis.
Salvage is not limited to the ship or its structure only. As was stated by the British court in Wells v Owners of Gas Float Whitton:
"That a ship or vessel, with her apparel and cargo, and flotsam, jetsam and lagan, which have formed part of one or other of these, are subjects of salvage, is clear law."
Finally, salvage is to be distinguished from towage, the distinction being of great importance as stated in Volume 1(1) of Halsbury's Laws of England - Admiralty Law:
"Although there is a maritime lien in respect of salvage, there is no maritime lien in respect of towage."
- Duhaime.org wishes to thank Mr. Darren Williams, maritime law lawyer of Victoria, British Columbia, for his assistance in suggesting this definition.
- Gaskell, N. and others, Chorley & Giles', Shipping Law (London: Pitman Publishing, 1987).
- Gilmore, G. and Black, C., The Law of Admiralty (New York: Foundation Press, 1975), page 532.
- International Maritime Organization
- The Fusilier 167 E.R. 391 (1865)
- Wells v Owners of Gas Float Whitton 1897 A.C. 337, at page 343.