Despite your best efforts at maintenance you’re having a bad day on the water. With friends and family on board you’ve anchored for lunch and a swim and now your boat won’t start. You call for assistance and a tow boat roars up and the crew on board request you sign a salvage contract before passing you a line.
            You need to get your boat back to the marina so your mechanic can have a look at it and you need to get your friends back to the dock, but you don’t want to face a potentially large bill.  What do you do?
            Or, perhaps you’ve run up on a shoal. With your boat grinding with each passing wave you need help to get off. You call for assistance and the same boat roars up with the same contract. What choice do you have?
            There is a huge difference between a tow and a salvage, and prudent boaters are wise to know the difference and how to protect themselves in all possibilities.
            The concept that salvors are legally entitled to payment for their work began well over 3,000 years ago and, as passed along from the Romans, the law was designed to ensure that good, honest, people, would risk their lives to save ships, cargo and crew. (The alternative was to leave this line of work to pirates, with predictable consequences.)
            Over the years, the salvage rules written in Maritime Law have changed little and the basic concept for compensation remains – if a salvor is required and one arrives with the right equipment and successfully completes the job, they are entitled to compensation.
This is also known in the reverse form as “no cure, no pay,” explains Darren Williams, Marine Lawyer at www.marinelaw.ca.
            He notes that salvors have always been rewarded not by the hour but through a flexible computation based on the equipment needed to complete the work, the skill of the operator, and the value of the vessel and cargo and the peril that was facing the vessel had it remained where it was.  The amount of compensation can be quite large and recreational boat owners can be, and almost always are, shocked at the bill.
            Canada (and the United States) is signed on to the Salvage Convention of 1989 (SALCON 89) which for the first time in history placed a value on mitigating environmental damage.  “This means if a salvor has also prevented environmental damage they are entitled to a fee for that,” explains Williams.
            “So for example, you could have an owner of a $15,000 used boat with 500 litres of fuel on board who is hung up on the rocks and sustains $2,000-$3,000 worth of hull damage. He calls a salvor who works for two hours at $500 an hour and then the salvage bill arrives for $50,000,” he says.
            The amount would be based on the environmental damage that was prevented because the boat did not lose its fuel causing an environmental disaster for which the boat owner would be financially responsible.  Knowing this, the prudent boat owner will finish this column and then bury themselves in their boat insurance policy.
            “Boat insurance policies have two parts,” says Williams. “There is Hull and Machinery insurance and there is Protection and Indemnity insurance. P&I covers salvage bills.”
            However, he notes, it is up to the boat owner to make sure they are adequately covered and that they are carrying out whatever demands are in the coverage.  For example if the policy specifically states that owners can not take their vessel off the dock if it is unseaworthy, the owner better be sure the boat is seaworthy.  There can be a number of these type of specifications in any policy, states Williams.  If you are on the water and faced with a salvage bill, a call to your insurance company after you reach shore, should handle it for you.
            So let’s return to our two examples.
            It is reasonably clear that in the second situation, with a boat grinding on the rocks, that we have a “salvage” situation.  There is an imminent danger to the boat and the environment and the boat owner requires assistance.  If the salvor arrives voluntarily, has the equipment and expertise to do the job and performs it, they are entitled to compensation.
            The first situation is obviously a little bit different.
            While the boat might not start, the boat and the people on board aren’t in any imminent peril. True, this could change as hours pass, night falls and the weather turns, but immediately there is no real peril.  A less expensive towing contract could easily be negotiated here.
            But there is one more issue that throws the proverbial monkey wrench into the mix.  With a signed salvage contract the boat can be sued and arrested, which simply means that it will be seized at the dock and unable to be used until the legal process works its way through court, or the salvage bill is paid.  “This is a powerful mechanism and takes precedence over mortgages and other liens against the boat,” states Williams.
            A towing contract on the other hand, is like a mechanic’s lien. It is there but is only good with a lot more legal work and could possibly remain unpaid for various reasons.
            Which is why, for a simple tow, you may be presented with a salvage contract. It is much easier to collect.  Williams’ advice is to take a look at any contract and negotiate before you sign – based on the particular circumstances.
            “It is up to the individual boat owner to negotiate with whoever comes to their aid. Whether it is a signed contract or a verbal agreement, make sure there are witnesses if at all possible.
            “If there isn’t immediate peril, whatever you sign will be accepted in a court as a legally binding contract.  If however, your boat is sinking, the weather is worsening and you sign something in a hurry to save the boat, you could argue duress,” he says.
Simply knowing the difference could save you money, time and your boating season.

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