IUA/AAA Seminar 3 September 2019
Lloyd’s Open Form – Dispelling the myths” was the topic for the autumn joint IUA/AAA seminar on 3rd September, attracting over 100 attendees from all sections of the market. AAA chairman, Richard Cornah, provided a brief introduction about LOF and the work of the Lloyd’s Salvage Group before handing over to Paul Cunningham, Marine and Energy Claims Manager for Talbot Underwriting Ltd. Paul declared himself to be a supporter of LOF as the right basis for dealing with serious casualties, particularly when time was of the essence. Once services were complete LOF provided a clear framework for both security and ultimate settlement and the great majority of cases were settled by negotiation without needing to go to Arbitration at all. Although this saved costs, there was a possible downside in that such settlements we generally not made public so that Arbitrators, when faced with a major casualty at arbitration, might not be fully aware of how the market valued the more routine salvage cases. He suggested that London market insurers should perhaps follow the example of the Scandinavian market in taking a much more active role in the salvage side of big casualties and that cargo interests should be better represented during operations when this was practicable. Better claims procedures being agreed in advance with Assureds would also help to ensure that the appropriate type of salvage contract was agreed according to the circumstances of the case.
Roger Evans, now ISU Secretary General after many years active salvage experience with Smits, opened his PowerPoint presentation with an authentic looking, but happily spoof, press release saying that Lloyd’s had decided to withdraw support for LOF and parties would have to make their own arrangements. However he pointed out that the legal right to salvage awards, enshrined in the Salvage Convention, would not go away and parties would have to negotiate and litigate without the benefits of LOF’s well understood framework. He outlined the various provisions in LOF that provided a balance between the various parties involved and the key principles of salvage law and practice – all set out in the presentation that can be viewed through the link below. Salvors were operating in a very competitive market, with cases now fewer in number but often much more demanding in terms of skills and resources required – cooperation rather than polarization was needed to meet current and future challenges.
Download Roger's slides here