By Tom Walters (pictured), Partner and Henry Clack, Senior Associate, HFW
Posted on: 18 June 2024
On 1 June 2024, the Lloyd’s Salvage Arbitration Branch launched an updated edition of the Lloyd’s Standard Form of Salvage Agreement, or Lloyd’s Open Form (LOF 2024). The format remains unchanged with a simple set of boxes to be completed on page one, clauses A to L and a notices section that incorporate the Lloyd’s Salvage Arbitration Clauses (LSAC) and the Special Compensation P&I Clause (SCOPIC) into the agreement.
The Lloyd’s Standard Form of Salvage Agreement has been in use in one form or another for over 130 years and this latest iteration (the thirteenth) includes a number of amendments which simplify and modernise this well-known contract taking into account feedback from the market and stakeholders who use the contract. These changes include the adoption of gender-neutral terms, the shortening of sentences, removing references to faxes and the simplification of some of the language used.
However, by far the most significant changes relate to (i) the sharing of previously confidential settlement data with Lloyd’s; and (ii) the introduction of the new Fast-Track Documents Only (FTDO) procedure. Whilst this new procedure is analogous to the old Fixed Costs Arbitration Procedure (FCAP), the FTDO now applies to much larger claims (i.e. those with a security demand of up to US$10 million compared to US$2 million under LOF 2020). Whilst the cap on recoverable costs is higher than under FCAP, it is expected that the introduction of this new procedure will speed up the time taken to obtain an award and limit the costs incurred by the parties.
Read full article here together with a marked up copy of the LOF contract changes.
