By: David Weil
Question:
I participated in a discussion on social media a couple weeks ago about the recent grounding of a sailboat on Catalina Island, and the question of salvage came up. There was no indication that the boat owner was trying to save the boat, and several of the people in the group commented that, under maritime salvage law, anyone who re-floated the boat and fixed it could somehow apply to own the boat. Is this true? How would that procedure work?
Answer:
Salvage is an area of maritime law that is often misunderstood by the yachting community. The short answers to our reader’s questions are (1) there is no law, old-time or otherwise, that would allow our reader to keep a boat that he re-floated and fixed; and (2) even without gaining ownership, he would probably be entitled to some compensation.
“Salvage” is frequently confused with “towing,” since both services are frequently performed by a towing company and both may be rendered to a vessel in peril. Salvage is distinguished, however, by the “no cure – no pay” nature of the services. In a salvage job, the company gets paid nothing unless the vessel is successfully recovered. If the company gets paid regardless of their success, the job is a “tow,” and the company will get their regular rate for towing services. Even where it is a salvage job and the salvage is successful, many salvage operations do not involve a pre-determined amount for the salvage fee. The ambiguity surrounding the amount of compensation owed to a salvage company has confused judges and lawyers for centuries, so it’s not surprising that the yachting community has a few questions.
Upon the completion of a successful salvage where there was no pre-determined fee, a salvage company (or an individual such as our reader) will typically enter into a negotiation with the vessel’s insurance company. Those negotiations will consider a series of seven factors in connection with the salvage operation: (1) The labor expended in rendering the salvage service; (2) the speed, skill, and energy displayed in rendering the service and saving the vessel; (3) the value of the salvage vessels and other property employed in rendering the service, and the danger to which such property was exposed; (4) the risk incurred in securing the vessel from the impending peril; (5) the value of the vessel saved; the degree of danger from which the vessel was rescued; and (7) whether the wrecked vessel presented a pollution risk.
The calculation of a salvage award will consider these factors and determine an amount that is a percentage of the post-incident value of the boat. If the case involves a quick tow, off a sandy beach with no surf, the award may be in the neighborhood of five to ten percent of the value of the boat. A strong onshore wind on an exposed rocky point, where people are risking their lives, will lead to a very high award. Regardless, awards that exceed sixty or seventy percent of the vessel value are extremely rare. Unfortunately, this does not involve a clear and objective calculation, and salvage claims therefore frequently end up in court.
As for our reader’s case, there is no law or circumstance under which someone may simply walk away with property that he happened to stumble upon – even if he spent money to fix it. The salvage law principles discussed above will be applied, even if the boat appears to have been abandoned. “Finders – Keepers” is not a valid legal principal, except in rare instances where the property has been abandoned for so long that it has been buried in the sand and effectively “returned to the state of nature.” This may be possible in the case of an ancient, long-lost shipwreck, but even then, the rules of salvage described above would be applied if the vessel owners (or more likely the modern affiliates of the vessel’s insurance company) come forward. Bottom line – as always – contact an experienced maritime attorney to discuss the facts of your particular case in detail.
David Weil is licensed to practice law in the state of California and as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.
David Weil is the managing attorney at Weil & Associates (www.weilmaritime.com) in Seal Beach. He is certified as a Specialist in Admiralty and Maritime Law by the State Bar of California Board of Legal Specialization and a “Proctor in Admiralty” Member of the Maritime Law Association of the United States, an adjunct professor of Admiralty Law, and former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at 562-799-5508, through his website at www.weilmaritime.com, or via email at [email protected].
