First thing’s first, what is LOF? LOF stands for Lloyd’s Standard Form Of Salvage Agreement, it originated from the late 1800s and was designed to provide a process of providing what amount of compensation paid to salvors for their efforts and time in saving property at sea as well as protection to the surrounding environment.
You can watch this handy video Lloyd’s List put together about it.
The form is one of the most widely used salvage agreements in the world today.
The form itself is open, meaning that no particular amount of money is stipulated for the salvage job, this is because the sum to be paid is decided at a later date by an arbitrator, who follows the English law of civil salvage.
Everything is taken into consideration when deciding the remuneration including the value of the ship, and its cargo and freight that are at risk, this along with the difficulty of the salvage.
The LOF form itself is a simple two page pdf document, which is also accompanied by Lloyd’s Standard Salvage and Arbitration (LSSA) Clauses and the procedural rules (91KB, pdf), which are designed to keep you up to date with any clauses or procedures you have to follow.
There has been some discussion of late whether the LOF awards are too high and out of proportion, and whether or not if there is a way that this can be modified.
If you would like to find out more, why not head to the 19th Salvage & Wreck Conference in London, where George Tsavliris of Tsavliris Salvage Group and Sam Kendall-Marsden of The Standard Club London will be discussing LOF in more detail in the panel discussion: LOF: Sign, Terminate, Avoid.