MERCHANT SHIPPING (SALVAGE) BILL. (Hansard, 16 July 1940)

§ LORD TEMPLEMORE

My Lords, I beg to move that this Bill be now read a second time. The purpose of the Bill is to place the Crown in the same position as the private salvor—that is, the Crown should be able to claim a salvage reward for services rendered by any of His Majesty's ships or by any ship under the control of the Crown. Until 1916 the Crown was precluded by a Statute enacted in 1853 and now embodied as Section 557 of the Merchant Shipping Act, 1894, from claiming any such reward. That Act, as your Lordships will see, is repealed in the 961 Schedule of the present Bill. After the 1916 Act they were authorised to claim rewards in respect only of salvage vessels or of tugs. They were still debarred from claiming for the services of warships, miscellaneous craft other than those specified, shore parties, plant, etc. Until a judgment in the House of Lords (Valverda case, 1937) rendered the procedure invalid, the Admiralty were able to modify the statutory disability by entering into voluntary agreements with the representatives of the salved property. In practice the present Bill aims to do little more than return to the position before this decision.

The need for the proposed legislation is especially great in war-time, when the Admiralty have taken up almost the entire salvage organisation of the country, and in addition requisition and purchase salvage equipment and ships to deal with individual cases of vessels in distress. The present practice relieves the under-writers, at the expense of the taxpayer, of a considerable liability. In the last war the Admiralty salvage organisation was only started in 1917 and throughout there was a body of private salvage firms in operation. Although a large number of cases are covered by existing legislation, it is only right that where, with an eye to the urgent need for ships, the Admiralty undertake a salvage job which a private salvor would reject as an unprofitable undertaking, some reasonable reward should be paid out of the benefit received by the owners of the property salved. As an illustration of a case where the Admiralty are debarred from claiming salvage under present law, while the private salvor may do so, the following may be noted. Two Admiralty trawlers—this actually happened—towed a ship damaged by enemy action forty miles to the entrance of a harbour. These two vessels were unable by law to claim salvage, yet the Admiralty controlled tug which came out of harbour, towed the damaged ship a few hundred yards inside without any risk to herself, was able to claim. Since the beginning of the war upwards of 100 vessels with a total tonnage close on half a million tons have been successfully salvaged. This is almost a half of the British tonnage which has been sunk by enemy action since September 3. In a number of these cases the Admiralty have not been able to claim salvage reward. The terms of the 962 Bill do not prevent crews in any way from receiving salvage awards. The rule regarding crews in the permanent service of the Admiralty is that they must get Admiralty permission before they claim. I may say this is always given in any case where the Admiralty claim.

Turning to the Bill, the most important clause is Clause 1, subsections (2) and (3) of which are intended 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 is that 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 the benefit of any salvage services rendered by the ship. This position gives rise to some difficulty in cases where a ship is requisitioned ad hoc for a particular salvage service, and the salvage services are rendered before any agreement has been made about the terms. These two subsections of the Bill provide that the Crown and not the owner shall be entitled to any salvage reward earned by a requisitioned ship unless an agreement is made to the contrary.

Some difficulty has been experienced in regard to the position of commercial tugs called on to assist the Admiralty in salvage operations. Although Clause 1 (2) of the Bill has a bearing on this matter it is only incidentally since the power to requisition and the control of salvage work are given to the Admiralty by Defence (General) Regulations. It is undesirable that where the Admiralty have accepted a salvage contract the owners of the property salved should also be put to the trouble and expense of dealing with other claims put forward by tug owners employed by the Admiralty in connection with the operations. It should be for the Admiralty alone to settle with the tug owners, and there is no intention of treat-ting them unfairly. Negotiations are at present proceeding with the Institute of Tug Owners, and there is every reason to believe that the exercise of the power of requisition in such cases will not be necessary but that the position between the Admiralty and the tug owners will be fixed by general agreement. The Bill also applies to aircraft, although it is doubtful whether any important aircraft operations of this nature will be carried out. I would draw your Lordships' attention to 963 Clause 4 (2), under which the Bill will be construed as one with the Merchant Shipping Acts, and will thus extend to Australia, New Zealand, India, and the Colonial Empire.

Finally, it may be said that the general purpose of the Bill is eminently equitable. The position is summed up in Lord Wright's judgment. Although the present law as interpreted by the noble and learned Lord is against an Admiralty-claim for salvage—and here I should like, if my noble and learned friend has no objection, to quote his actual words— 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 have now explained as well as I can the objects and scope of this small but rather technical Bill. The Bill comes to us from another place, and it is the intention of His Majesty's Government to put down one or two Amendments on the Committee stage in order, as we think, to improve the Bill and make it clearer. That being the case, I will ask your Lordships, if you will be good enough, to allow me to take the Committee stage on Thursday, so that we could then have Report and Third Reading next week and send the Bill back to another place for the consideration of our Amendments. I hope your Lordships will regard this Bill as a necessary piece of war legislation. I beg to move that it be now read a second time.