Decision supports continued use of the Lloyd’s Open Form salvage contract
Posted on: 23 July 2021
In a move that has been strongly endorsed by UK maritime professional services body Maritime London, Lloyd’s has confirmed that it will continue to operate the Lloyd’s Salvage Arbitration Branch (LSAB) that oversees the Lloyd’s Open Form (LOF) salvage contract and procedures.
The Lloyd’s Council decision follows an industry-wide consultation over a proposal to put LSAB into ‘run off’ in the face of declining use of LOF – whether through improved safety of the maritime industry or a growing resistance by insurers to the Form’s risk-based structure.
In making is decision Lloyd’s says it has “recognised and listened to” the high volume of representations in support of LSAB and LOF made by market representatives, committees and other interested parties.
“Lloyd’s is now determined to increase the use of the form and highlight the benefits that its use can bring,” the company said in a statement. “With support from the Lloyd’s Market Association, and representatives of the Lloyd’s market (marine) committees, we would like to establish a ‘LOF Market Working Group’ to support and help drive this review… [with] support from the already established ‘Lloyd’s Salvage Group’ – represented by all parties across the maritime sector with an interest in LOF.
“Once this work has been completed, we will then present the findings, actions and any recommendations to Lloyd’s Council. In the meantime, we will amend our charging structure to better reflect the importance of the work undertaken by the LSAB and we will shortly be sending a further communication to the market, and wider maritime community, confirming the new charging structure for the LSAB (and use of LOF).”
Jos Standerwick, Chief Executive of Maritime London, commented: “I am exceptionally pleased that Lloyd’s have made the right decision on the future of the LSAB and is committed to working with the market to increase the use of the Form and highlight the benefits that its use can bring. It goes without saying that Maritime London and our members will do all we can to support Lloyd’s in this endeavour.
“I would like to thank all of our members and those from the wider, international shipping community who were so vocal in explaining the fundamental importance of the LSAB and the LOF to the London market and the most importantly to the safe and efficient response to marine casualties.”
Mark Lloyd, Chairman of Maritime London member the Admiralty Solicitors Group (ASG), said: “The ASG and other users of the LSAB and LOF system are strongly supportive of the response of Lloyd’s to the consultation process. The unanimous and consistent response from the insurance, salvage, services and other industry parties was that the LOF system and LSAB’s role is a core element of the global shipping industry. This response confirms that.”