Page 14: of Maritime Reporter Magazine (June 2020)

INSIGHTS: AMERICAN SAlVAGE ASSoCIATIoN 2020

Responder Immunity: yearbook

Protecting the Salvor in “Bet the Company” Responses

By Alfred J. Kuffer he specter of liability beyond the limits of applicable in- risk the work entails.

surance for the salvor’s liability to both its contractual partner and third parties continues to haunt the Ameri- Protection of Salvors Under U.S. Law

Tcan Salvage Association’s members. Hence, the efforts Current U.S. law affords some protection to salvors, but that since 2011 to obtain broad based immunity from claims beyond protection is spotty at best.

the patch work of statute, judge made law and contractual risk OPA 90, some case law, and the traditional ship owners’ right shifting terms. The exposure on certain projects to the prospect to limit liability in non OPA situations provide some intermit- of “you bet the company claims” has caused prospective bid- tent protection to salvors.

ders with the requisite skills, technical expertise, and physical OPA immunity is granted to “any person” who incurs a li- resources to decline opportunities to participate in major but ability for “removal costs’” and “damages” [as defned in OPA- high-risk projects. Responder immunity would negate this dis- 90] resulting from “actions taken or omitted to be taken in the incentive. course of rendering care, assistance or advice.” (33 USC §1321 (c (4))

Summary With respect to the foregoing language, three caveats are in

The Deepwater Horizon explosion followed by the extended order: and risky effort to staunch the fow of oil from the well brought First, “person” is defned as “include[ing] an individual, frm, home to the domestic salvage industry the fnancial risks fall- corporation, association, and partnership.” 33 USC § 1321(a) ing to responders in such a massive casualty. Most important (7). Salvors certainly seem to fll this defnition of “person”. was the realization that the fnancial exposure which the Deep- Secondly, OPA 90 only provides a limited immunity for “per- water Horizon explosion produced quickly outran the protec- sons.” The limitations include (i) the operative event is the tion afforded by all available insurances. response to a spill subject to OPA 90; (ii) excludes claims for

Following the Deepwater Horizon, the ASA thus led an ulti- personal injury and death; (iii) is inapplicable if the responder mately unsuccessful effort to obtain immunity through an act has been grossly negligent or guilty of willful misconduct; (iv) of Congress The ASA is now examining the prospect of gaining the immunity does not apply to responses other than “oil spills by contract at least some of the benefts that the proposed legis- Finally, the immunity is limited to the defned “removal lation would have conferred. by using tried and true risk shift- costs” and “damages..” as defned and , does not include items ing devices such as cross indemnities, and waivers of claims. such as,vessel damage, loss of income to the vessel and salvors.

If the industry fnds the concept should also apply to otherwise With respect to developing case law, responders who fol- insured matters, then waivers of subrogation, and additional in- low government directives in carrying out their work are also sured provisions will also come into play. immune to third party claims. See In Re Deepwater Horizon, 2016 WL 614690.

History Traditional case law generally, but not universally hold a sal-

The loss of the Deepwater Horizon in April 2010 and the con- vor liable only for “gross negligence.

sequent massive third-party liabilities – real and potential – far Salvors working on non OPA incidents may be able to in- beyond the limits of any available insurance- brought to the voke the 1851 limitation of liability statute, 46 USC §§ 30501- fore the fnancial risks responders faced. 30512. and may be able to limit liability based on the value of

As a result,at least two major U.S. companies declined to un- the vessel after the casualty (except in the case of personal inju- dertake efforts to plug the well out of concern for the exposure ry and death claims But limitation is disfavored by U.S. courts, they would take on if efforts failed. In addition, it is the ASA’s so this protection, even if theoretically available, is ephemeral.

understanding that its members have and are continuing to de- The above summary demonstrates that salvors face liability cline work for similar reasons. for gross negligence, will have great diffculty limiting liabil-

If the industry is to be encouraged to take on work presenting ity under the 1851 statute and cannot limit under OPA-90 or, great risk, means must be found to assuage the entrepreneurial as a practical matter the 1851 limitation statute, for personal 14 Maritime Reporter & Engineering News • June 2020