Lloyd's Open Form (LOF)
The standard salvage contract kept by Lloyd's: the salvor goes to work with no price agreed in advance, and its reward, due only if it succeeds, is set afterward by arbitration in London.
Lloyd's Open Form is a one-page salvage contract that the master of a ship in distress can accept by radio within minutes, without negotiating a price. It applies the no cure, no pay principle: the salvor is paid only if it saves something, and its reward is set afterward by a Lloyd's arbitrator under the criteria of Article 13 of the 1989 Salvage Convention (salved value, danger faced, speed, protection of the environment). The problem it solves is urgency: nobody haggles over a tow while a ship drifts toward the shore. For insurance, the salvage award is generally allowed in general average and then shared among hull, cargo and freight in proportion to the values saved. The security the salvor demands before releasing the property is in practice posted by insurers, and the SCOPIC clause can be bolted on when the ship threatens to pollute.
On April 23, 2021, Lloyd's announced its intention to close its Salvage Arbitration Branch, which administers the form, citing its declining use. After strong opposition from salvors, the International Salvage Union and insurer associations, it backed down on July 21, 2021 and kept both the branch and the form, changing their charging structure as of October 1, 2021.
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