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Salvage developments

During the year, the International Group of P&I Clubs and the International Salvage Union have reached agreement on an optional new scheme to replace the special compensation arrangement for salvors who have failed to earn a sufficient traditional 'no cure no pay' award and have prevented or minimised damage to the environment. The so-called Special Compensation P&I Clause ('SCOPIC') would allow salvors to contract out of the special compensation provisions of Lloyd's Open Form and apply the new scheme at any time of their choosing, regardless of the circumstances.
SCOPIC includes a provision intended to discourage salvors from invoking the new scheme where the traditional 'no cure no pay' award would exceed the remuneration payable under SCOPIC.

ICS has supported SCOPIC to the extent that it seeks to provide clarity and thereby reduce the need for expensive and time consuming litigation. However, there are some continuing concerns both about the departure from the fundamental principles of the 1989 Salvage Convention (e.g. that threat of damage to the environment should be the trigger for payment of special compensation) and about the lack of balance of the clause itself. ICS therefore welcomes the proposal that SCOPIC should initially be introduced on a two year trial basis and then reviewed.

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