Lloyd's Open Form
Encyclopedia
A Lloyd's Open Form, formally Lloyd's Standard Form of Salvage Agreement, but more commonly referred to as LOF, is a standard legal document for a proposed marine salvage
operation. The two-page contract is published by the famous Lloyd's of London
. It is called "open" because it is literally open, with no amount of money being stipulated for the salvage job: the sum to be paid is determined later in London by a professional arbitrator. At the top of page one, beneath the title "Salvage Agreement" is a statement of the contract's fundamental premise. "NO CURE – NO PAY". The form originated in the late 19th century and is the most common such form of international salvage agreement.
The arbitrator, who is invariably a Queen's Counsel
practising at the Admiralty Bar
, follows the English law
of civil salvage, in determining the salvage award. The value of the ship, its cargo and freight at risk are taken into account when the arbitrator decides what the award should be, together with the extent of the dangers and the difficulty in effecting the salvage.
Marine salvage
Marine salvage is the process of rescuing a ship, its cargo, or other property from peril. Salvage encompasses rescue towing, refloating a sunken or grounded vessel, or patching or repairing a ship...
operation. The two-page contract is published by the famous Lloyd's of London
Lloyd's of London
Lloyd's, also known as Lloyd's of London, is a British insurance and reinsurance market. It serves as a partially mutualised marketplace where multiple financial backers, underwriters, or members, whether individuals or corporations, come together to pool and spread risk...
. It is called "open" because it is literally open, with no amount of money being stipulated for the salvage job: the sum to be paid is determined later in London by a professional arbitrator. At the top of page one, beneath the title "Salvage Agreement" is a statement of the contract's fundamental premise. "NO CURE – NO PAY". The form originated in the late 19th century and is the most common such form of international salvage agreement.
The arbitrator, who is invariably a Queen's Counsel
Queen's Counsel
Queen's Counsel , known as King's Counsel during the reign of a male sovereign, are lawyers appointed by letters patent to be one of Her [or His] Majesty's Counsel learned in the law...
practising at the Admiralty Bar
Admiralty law
Admiralty law is a distinct body of law which governs maritime questions and offenses. It is a body of both domestic law governing maritime activities, and private international law governing the relationships between private entities which operate vessels on the oceans...
, follows the English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
of civil salvage, in determining the salvage award. The value of the ship, its cargo and freight at risk are taken into account when the arbitrator decides what the award should be, together with the extent of the dangers and the difficulty in effecting the salvage.
External links
- http://www.lloyds.com/~/media/2beea8c2236647619a09207e3d6f8c9f.ashx, Lloyd's of London LOF