MERCHANT SHIPPING (SALVAGE) BILL. (Hansard, 3 July 1940)

§ The Parliamentary Secretary to the Admiralty (Sir Victor Warrender)
I beg to move, "That the Bill be now read a Second time."
This is a comparatively simple Bill, and its provisions can be explained, I think, quite briefly to the House. The purpose of the Bill is to place the Crown in the same position as the private salvor, that is, to enable the Crown to claim a salvage reward for services rendered by any of His Majesty's ships or any ship under the control of the Admiralty. Until 1916 the Crown was definitely precluded by a Statute enacted in 1853 and now embodied as Section 557 of the Merchant Shipping Act, 1894, from claiming any such reward. But in 1916 this House passed an Act under which the Admiralty was authorised to claim for services rendered provided these services were rendered by vessels specially equipped for salvage work or by tugs, but they were still, under the provisions of that Statute, debarred from raising any claim for services rendered by His 933 Majesty's ships of other descriptions—by miscellaneous craft, other than those I have mentioned, or by shore parties or plant. The disability the Admiralty suffered at that time was commonly circumvented by entering into voluntary agreements with the representatives of salved property, and thereby the Admiralty was enabled to recoup itself for the expenses of services rendered. But, in 1937, as a result of a case in the courts, it was laid down by the House of Lords that voluntary agreements entered into upon that basis were null and void. The result is that the simple process which would have previously been followed, whereby the law could have been circumvented, was no longer possible.
The need for this Bill is especially great at this time, because, as hon. Members know, the Admiralty has taken over the whole of the salvage industry in this country, and in addition we are requisitioning and have purchased, at considerable cost, salvage equipment and ships to deal with cases of vessels in distress. The result is that if the law is left as it stands the underwriter or the owner may be relieved of a very considerable liability at the expense of the general taxpayer. Although a large number of cases are covered by existing legislation, the House, I think, will agree that it is only right that, with an eye for the urgent need of ships at the present time, the Admiralty should undertake salvage operations which a private salvor would reject as unprofitable, and some reasonable reward should be paid out of the benefit received by the owners of the property salved. Lest the House should fear that this Amendment which we propose should result in extortionate payments being demanded by underwriters or shipowners, let me say, in passing, that, of course, like all other salvage claims where voluntary agreement is not reached, there will be settlement in the courts, and the rights of interested parties are thereby protected. Nor is there any question of the Crown claiming salvage awards for services rendered to ships which are either chartered or have been requisitioned by the Ministry of Shipping or other Departments when the payment of a salvage reward would merely merely mean taking money from one Department and handing it over to another. Although the Government and the Ministry have requisitioned a large tonnage 934 of shipping, there still remains a large field open to us, and, in particular, there remains the foreign shipping which may or may not be salved.
Perhaps I can best illustrate the anomaly of the present position by quoting an actual case which occurred not so long ago. It so happened that two of His Majesty's trawlers took in tow a ship which had been damaged by enemy action some 40 miles out to sea. At considerable risk to themselves they brought this ship to port. The tug which came out and actually brought the ship to harbour, which the trawlers were unable to do, was able to make a claim for reward, although in point of fact it had been involved in very little risk, whereas the trawlers, which had done 99 per cent. of the work, were unable under the present law to make a claim. The salvage organisation which the Admiralty run has been instrumental in saving a very large amount of tonnage. Since the beginning of the war, nearly 100 vessels of a total tonnage of nearly 500,000 tons have been successfully salvaged. This figure is nearly half the losses inflicted on British tonnage since the beginning of the war. In a number of these cases the Admiralty have been barred from making any claim for salvage reward.
Another aspect of the Bill in which hon. Members may be interested is its effect on the rights of crews in making claims. Under the Bill crews are not prevented from receiving payments in respect of salvage. The rule regarding crews in the permanent service of the Admiralty, which has been followed for many years, is that they must obtain Admiralty permission before they make a claim. This rule is insisted upon and observed in the interest of the crews themselves, and permission is always given where the Admiralty claim. The Admiralty, however, use their discretion in these matters, in order to protect or save the crews from starting on hopeless or unprofitable litigation on their own. The main machinery of the Bill is in Subsection (1) of Clause 1. Hon. Members may, however, wish me to explain the provisions of Sub-sections (2) and (3), which appear to be a little complicated. The object of these Sub-sections is to remove doubts whether the crew or the owner of a ship is entitled to claim salvage for services rendered by the ship while she is requisitioned. The effect of decisions by the courts recently is that 935 where the terms of the requisition, by placing the possession and control of the vessel in the Crown are equivalent to a charter by demise, the Crown is entitled to any benefit of any salvage services rendered by the ship. This position has been found to give rise to some difficulty in cases where a ship is requisitioned ad hoc for a particular salvage operation, and the salvage services are rendered before any agreement has been made about terms. These Sub-sections provide that the Crown and not the owner shall be entitled to any salvage reward earned by a requisitioned ship unless an agreement has been made to the contrary.

§ Mr. Garro Jones (Aberdeen, North)
Will the hon. Gentleman deal with the rights of crews in cases of requisitioned ships? He has said that in the case of crews of ships in the service of the Admiralty the rights of crews remain, but in the case of the large number of requisitioned ships, is the right of crews to claim salvage intact?

§ Mr. Glenvil Hall (Colne Valley)
Will the hon. Gentleman explain whether the crews of His Majesty's ships are safeguarded, and, if so, which of these Clauses covers them?

§ Sir V. Warrender
Under this Bill we repeal certain Sections of the Merchant Shipping Act, 1894, but the rights of crews, in spite of the alteration in the law, remain intact. This Bill does not alter their rights. In reply to the hon. Member for North Aberdeen (Mr. Garro Jones) the crews of requisitioned ships are not prevented, as I understand it, from making a claim, but where it happens that they are so prevented and the Admiralty make a claim, obviously the Admiralty would apportion the claim to the crews and pay them in the form of a bonus. The Bill also applies to aircraft, but it is doubtful whether any important aircraft operations of this nature are likely to be carried out. Under Clause 3 (2) the Bill will be construed as one with the Merchant Shipping Act and will, therefore, extend to the Dominions and the Colonial Empire. I do not think I can do better that commend this Bill to the House in the words which were used by Lord Wright when judgment was given in the case to which I have referred. Dealing with the law as it stands, precluding us from making 936 claims except in respect of a limited class of vessel, Lord Wright said: It is difficult now to see any decisive reason why the general body of taxpayers should pay the expenses of salvage rather than the particular shipowners or underwriters who have benefited by it. The case is even less obvious when the ships salved are foreign or the underwriters are foreign in whole or in part. I hope that I have convinced the House that this is a gap in the law that should be filled.

§ Mr. Garro Jones
The House will not wish to be detained long on this Measure after the clear definition given by the Minister. It rectifies a defect in the law. The hon. Gentleman omitted, however, to deal with a point which should be cleared up. Although the claims for salvage will be dealt with by the Admiralty, there exists a large number of ships, not under the jurisdiction of the Admiralty, but under the Board of Trade. Often these participate in salvage operations, and I should like to know whether salvage services rendered by all ships, whether owned by the Admiralty or not, are covered by the Bill.

§ The Minister of Shipping (Mr. Cross)
If the hon. Member is referring to ships requisitioned not by the Admiralty but by the Ministry of Shipping, it depends on the terms of the charter. Under our ordinary charters, the rights remain vested in the owners so that the position remains unaffected.