The liability of salvors towards third parties in case of environmental salvage: Economic analysis

Marine salvors play a crucial role in rendering emergency response to maritime accidents. Their services generate positive externalities for preventing or minimizing damage to property and the environment. However, due to the uncertainties in environmental salvage, the services could also lead to further harm to third parties through acts of negligence. A negligent salvor is not immune to legal obligations but the legal risks of liability should not be excessively high to discourage them from providing socially desirable services. This article examines the consequences of salvorial negligence in environmental salvage in light of economic analysis of law as well as certain maritime law notions such as channeling provisions and limitation of liability. It concludes that given the uncertainties in determining, among other things, the levels of care involved, there is a danger that too strict a liability regime might deter salvors from engaging in environmental salvage. The legal regimes examined may grant a salvor immunity from liability for simple negligence but issues involving the international ship-source pollution compensation regime and public intervention can still discourage them from carrying out environmental salvage.