The UK Standard Conditions for Towage and Other Services have been revised, updating the framework of liability protection for tugs that has remained unchanged since 1986. Helen McCormick, Director, CJC, provides an overview.

First introduced in the 1920s, the ‘UKSCT’ provides significant protection from liability to tugowners, which in turn allows insurers to offer cover which takes into account the particular risks associated with tug operations.

Having engaged with interested parties last year, the British Tugowners Association established a panel to review the UKSCT, with participation from the International Group of P&I Clubs, the UK Chamber of Shipping and the Chartered Institute of Arbitrators.

As review panel chair Nick Dorman noted, UKSCT 1986, “lacks the language to allow it to be relevant in a contemporary world of, among other things, automation, electronic systems and digitalisation.”  For example, modern communications have changed what it means for the tug to be in physical proximity in order to receive orders.

UKSCT 2024 was introduced at a recent BTA safety seminar near Edinburgh, Scotland, and to the European Tugowners Association conference in Rome, Italy, in November.

One notable change is the excision of Clause 4(e), whose insertion into the 1986 Conditions was considered a necessary reflection of the Unfair Contracts Terms Act 1977 in the UK, which came into force in between the 1974 revision and the 1986 revisions of the UKSTC.

Clause 4(e) was included in the 1986 Conditions to make clear that the Conditions did not act as an exclusion of liability for the shipowner for death or personal injury arising from negligence (which is not permitted under UCTA 1977). However, the clause did not remove the general indemnity at Clause 4(b) that the Hirer shall indemnify the Tugowner against “any claims of whatsoever nature or howsoever arising or caused…” Nor did it remove the provision at Clause 3 that, whilst towing, the tug crew would be considered the servants of the Hirer and the Hirer would be vicariously liable for their acts or omissions.

UCTA 1977 is now better understood and has been tested in the Courts, which have confirmed that the Act makes it unlawful for a contract to exclude claims from the injured party for personal injury or death caused by negligence, but it does not prevent commercial parties from allocating liability for these claims. For that reason, Clause 4(e) was no longer felt to be necessary, and Clause 4(b) has also been modified accordingly.

Clause 4(b) also includes the words “whether direct or indirect”, to confirm that losses under both the first and second limbs of the test in Hadley v Baxendale are covered.

Other important changes include amendments to wording covering liability to replace out of date language and to simplify key clauses. The six-stage test of liability included in the first part of Clause 4(c), which deals with unseaworthiness of the tug, has been replaced with a simpler carve out provision that is similar to that found in other maritime conventions and standard form charterparties. The new wording now requires the Hirer to prove that “the loss has resulted from the personal act or omission of the Tugowners committed with the intent to cause such harm or recklessly with the knowledge that such harm would probably result” if they want to bring their claim outside of the exclusions of liability in Clauses 4(a) and 4(b).

Among other significant changes, Clause 9 governing law and jurisdiction includes an express provision recognising the right of the parties to agree a governing law other than English Law, or to choose a dispute resolution forum other than the English Courts.

For more information on the revised UK Standard Conditions for Towage and Other Services (2024), contact Helen McCormick, Director, CJC, helenm@cjclaw.com