What is a Special Casualty Representative?

As ships and maritime assets continue to get larger, the financial value and complexity of these assets increases.  As they increase, the role of a Special Casualty Representative (SCR) becomes more critical to salvage operations globally.  Operating as independent specialists in the interest of all parties, SCRs are there to help ensure financial responsibility as well as provide oversight, clarity and technical input on the salvage operations.  The SCR also accepts the Daily Salvage Reports and prepares an SCR Final Report, both of which are used when the salvage remuneration is assessed.

With the appointment of Ivan Todorov to the SCR Panel from January 2024, Brookes Bell now has the largest team of SCRs (with over 10% globally) of any technical consultancy, with specialists found in Asia, Europe and the United States.  In 2022, Brookes Bell were appointed for the SCR Role on over 40% of the SCOPIC cases.  Our Team of listed SCRs also continue to be appointed to assist during the ITT development and review/monitoring of a variety of wreck removal projects around the globe.

The Role of an SCR

SCRs are involved when there has been a maritime casualty that needs the assistance of a salvage company and an LOF Contract has been signed and SCOPIC has been invoked. Appointed initially by the Owners, the SCR is required to work closely alongside the appointed Salvage Master and the salvage team.  An SCR’s primary role is to monitor ongoing salvage operations, closely identifying risks concerning hazardous cargoes, scrutinising salvage plans, preparation of an SCR’s Final Report and ensuring financial responsibility.

The SCR’s duty is the same as the Salvage Master and these are defined in SCOPIC Appendix B, namely;

“The primary duty of the SCR shall be the same as the Contractor, namely to use his best endeavours to assist in the salvage of the vessel and the property thereon and in so doing to prevent and minimise damage to the environment”.

Throughout the salvage operation, the SCR will observe the process and consult closely throughout with the Salvage Master, reviewing how the task is being conducted and assessing the Daily Progress Reports.  Although SCRs work closely with the Salvage Master, the Salvage Master remains in overall control of the operation.  An SCR will produce an SCR Final Report, which forms the basis for remuneration for the Salvors under the SCOPIC Clause.

Understanding Salvage Conventions and the SCOPIC Clause

It is important to understand that the financial reward for Salvors is formed on the basis of the salvaged value of the recovered assets.  This is as a percentage of the recovered property, in accordance with Article 13 of the Salvage Convention.

In simple terms, there is no commercial value for Salvors to have equipment on standby if they are unable to reasonably cover their costs.  Salvors must be incentivised to maintain personnel and equipment so that when they are required, they can proceed to offer and assist/salvage a maritime asset and any cargo.

There are generally two phases when it comes to salvage situations.  The first is where a maritime asset gets into difficulties and requires external services to bring that situation back under control.  By example, this can be as simple as engine breakdown on a lee shore, through to a grounding or perhaps a fire.

At the outset of each of these situations, and there are many varieties, a Salvage Master and his support team will assess the situation, location, potential challenges, complications, and thereafter make a proposal to either the Owners direct or their underwriters with an offer of assistance.

When it comes to the first stage, this will generally be the mobilisation of assets (craft and personnel) to the location of the casualty and attempt to and bring the situation back under control.

These initial stages generally involve the offer of the simple internationally recognised LOF Contract, with or without SCOPIC incorporated or invoked.

Once, or more likely while, the Contract is being agreed, Salvors will be assessing the potential values of the maritime asset from both the likely hull value, but also with respect to likely cargo values (collectively referred to as property values), against the challenges and location of the incident and complications that may be found with same.  This assessment will generally give Salvors guidance on the benefit or otherwise of invoking SCOPIC in the LOF Contract or not.

In very simple terms, the smallest casualty with minimal values (i.e., fishing vessel), considered against a major casualty that may take a protracted period to bring under control or leave the Salvor with significant exposure to their own daily equipment and personnel costs, will likely result in SCOPIC being invoked from the outset of the Contract (i.e., mega container ship).  Similarly, major fires where property values are likely to be significantly reduced, will also be more prone to Salvors invoking SCOPIC from the outset.

Article 14 was introduced in 1989 to provide special compensation where pollution and significant threats to the marine environment were involved.  The effectiveness was, however, put into question, and was soon ‘replaced’ by the introduction of the Special Compensation P&I Clause (SCOPIC) in 1999.

SCOPIC revolutionised compensation calculations for Salvors operating under the Lloyd’s Open Form (LOF) Contract, introducing a fixed tariff for special compensation to ensure guaranteed remuneration, as a safety net to encourage salvage operations.

As stated, the SCOPIC Clause can be invoked by the Salvors from the first day or at any later stage of the salvage operation, provided that it is incorporated in the LOF Contract.  This ensures the Salvors get an income to complete the work when there would otherwise be little financial incentive to do so.  Incorporation of SCOPIC in Contracts remains optional to Salvors.

Although typically appointed by the shipowner, SCRs do not work for the owners of the ship, the owners of the cargo, the P&I Club or the underwriters. They do not work for any one party but serve the interests of all stakeholders that are engaged in the case of a casualty event.

Challenges for Salvage Operations

While more stringent regulations have improved the safety of vessels, they have also become larger which presents its own challenges, as well as the inconsistent presence of readily available salvage services around the world.

Ivan says a key consideration is that “it depends entirely on how quickly teams can deploy assets to help prevent the casualty turning into a wreck. The larger size of vessels means you may need to deploy larger assets.”  It’s important to note, however, that these assets may not be immediately available along all shipping routes.

In the case of the FREMANTLE HIGHWAY for example – the car carrier that caught fire off the coast of the Netherlands in July 2023 – Ivan added that “the response of the Salvors was phenomenal, because it was on their doorstep. If it were somewhere without such good salvage response infrastructure, the outcome may have been very different.”

To find out more about our SCR services click here.