There are many factors to consider when buying and owning a yacht – how should it be owned; should it be registered and if so where; should a skipper or crew be engaged; is it going to be chartered?
Likewise, if you are in business building, selling or refitting yachts you need to be sure that your contract terms provide you with adequate protection whilst still complying with legal requirements and actually work for you and the way you do your business.
Selling or purchasing a yacht of any size and type can be a complex process, particularly if the yacht or either of the parties is not in the UK. Significant amounts of money will be involved and it is usual for a deposit to be paid at an early stage of the transaction, before a survey can be carried out. Parties to the transaction will be concerned that the deposit is held securely, that title documentation is in order and that any outstanding finance on the yacht will be settled at completion. Buyers will also be concerned to know that they can withdraw from the sale and get the deposit refunded if the survey is unsatisfactory.
Why choose our specialist yachting lawyers?
Our team of marine solicitors offer legal advice and practical solutions to clients in the superyacht and leisure marine industries. The team members have in-depth knowledge of and great passion for the marine industry and are renowned for being down-to-earth and providing a friendly approach.
Our clients get the advantage of dealing with lawyers who have many years of relevant experience whilst paying fees which reflect our location outside London. Clients also benefit from our access to a huge global network of international lawyers and experts through our membership of various international Associations, meaning that we can guide and advise on all aspects of marine law.
Who do we help in the yacht industry?
Insurers, marine finance companies, yacht charter companies, repair yards, yacht brokers, yacht dealerships and yacht owners can be found amongst our clients, receiving advice on many aspects of the law including:
Sale and purchase contracts
Whether you are buying or selling a yacht (or you are a broker whose clients are seeking legal advice) we can assist. We can handle the transaction for you (even if there is a broker involved), including negotiating and advising on the sale agreement and advising on title documentation and VAT paid status. We can hold the deposit, the completion documents and completion funds as stakeholder and will co-ordinate and deal with completion and the release of any outstanding mortgages. We can also advise on the parties’ rights following the survey.
Sponsorship and associated agreements
We can advise on the terms and conditions of sponsorship agreements, branding etc.
Terms and conditions of business
We can advise on terms and conditions of business for those operating in the marine sector.
We can advise on agreements between manufacturers and dealers in connection with the sale of vessels.
We can advise on contracts for the sale of vessels by a broker, including sole agency and multiple agency agreements.
New build and refit contracts
We can advise on the contract terms, the passing of title, stage payments, warranties, delay and any other issue of concern.
We can handle the registration of your vessel for you, whether on the British Registry or a foreign flag. We will arrange a tonnage measurement survey, ensure title documents are sufficient and that the relevant forms are correctly completed and coordinate the registration process for you.
We can advise on the terms of and obligations and duties imposed by charter agreements and other contracts for the use of a vessel. We advise clients setting up a charter business and owners, charterers and their agents if issues arise during the charter, handling any resultant arbitration or dispute resolution if required.
We can advise on the terms and conditions of agreements for the management of vessels.
Whether you are a lender or a borrower we can advise you on the loan facility and security documentation (including registered and unregistered mortgages, deeds of covenant, personal guarantees, debentures, assignments of insurance and of the rights under build contracts). We can also advise in relation to default situations, including what constitutes default, the enforcement of security (including action to take possession of the vessel) and recovery of any shortfall following the sale of the vessel.
We can advise on corporate structures, offshore or otherwise, established for the purposes of ownership of a yacht and on co-ownership agreements between joint owners of a yacht, regulating the rights and obligations of each owner.
We can provide advice on contracts for the employment of skippers and crew if required.
Marine casualties and admiralty claims
Here are just some of the areas our marine solicitors have expertise in:
- Collision liability: advice on law and jurisdiction; liability under Collision Regulations, provision of security, arrest and release of vessels;
- Salvage: advice on requirements for salvage, salvage remuneration, provision of security and release of vessel;
- Obtaining security: advice on how and when to obtain security for a claim, arresting vessels to obtain security, quantum, guarantee wording;
- Limitation funds: advice on calculation of limitation, establishing a fund, when limitation applies and how it can be challenged;
- MCA and MAIB investigations: advice on how to respond to investigations, the powers of investigators and how to handle interviews.
Insurance and claims
Marine claims come with their own unique problems, and we know that dealing with claims and disputes in this area can be a challenging and frustrating process.
We can help with a wide range of issues including:
- Negligence claims – assistance in relation to pursuing claims for losses suffered as a result of negligence, including claims against surveyors, third parties in respect of collision damage and claims for uninsured losses;
- Breach of contract claims – advice in pursuing claims for losses suffered as a result of a breach of contract, including charter agreements, sale or purchase agreements, repair or refit contracts;
- Defended claims – advice in relation to defending claims being pursued against an insured party in respect of a liability which is covered by their insurance policy.
- Insurance coverage and policy advice – advice on the wording of insurance policies and coverage issues;
- Disputes – advice in relation to disputes (including cross border) arising under insurance policies, including managing claims in other jurisdictions.
Because incidents frequently take place in international waters or with vessels with foreign flags we have considerable expertise in working across jurisdictions together with our tried and tested network of foreign correspondent lawyers and other experts. It also gives us the ability to give you an early assessment of risks you might face, seek to minimise those risks and find the most commercial outcome for you.
Personal injury and fatality claims
Our yacht specialists can help, advise and act for yacht owners and their insurers in defending claims brought by crew or passengers on superyachts or leisure marine craft.
From the protocol stage through to trial we can provide the most appropriate legal advice. We have a great deal of experience in advising on all types of injury or fatality claims, both internationally and domestically and have dealt with many claims arising from racing collisions, jet skis collisions, propeller strikes and ‘kill chord’ incidents. We can represent interested parties at inquests if required.
We are one of very few law firms with experience in this specialised area of law and consequently we can help vessel owners, managers, skippers or crew members if they are facing investigation or prosecution for breaches of Merchant Shipping Regulations, harbour byelaws or the Collision Regulations. We can offer advice on possible defences, pleas and penalties. We can also advise clients during interviews under caution and represent them in the Magistrates courts or the Crown Court if the case goes that far.
Vessel arrest (debt recovery)
Arresting a vessel is a very effective way of recovering a debt owed by its owner. We can advise on such claims and conduct the arrest procedure for you.
We are members of the British Marine Federation and a number of other trade associations and bodies. Several Members of the team are members of the RYA and hold various RYA certificates of competency.
Frequently Asked Questions
Registration is not compulsory in the UK although if you plan to take your yacht out of UK territorial waters you will need it to be registered on an appropriate register somewhere. Most of the providers of marine finance in the UK will require the vessel to be registered on Part 1 of the British Registry as a condition of the loan agreement. This is so that a mortgage can be registered against the vessel.
Part 1 of the UK Ship register is a full title register. This means that it is necessary to submit evidence of ownership of the vessel, stretching back at least 5 years in the case of a pleasure yacht, in order to prove that the person seeking to register the vessel is the legal owner of that vessel. Once a vessel is registered on Part 1 of the UK Ship Register a mortgage can be registered against the vessel.
Part 3 (also known as the Small Ship Register) is not a title register. It is not necessary to submit any evidence of ownership of the vessel in order to obtain a SSR certificate. Mortgages cannot be registered against a vessel on the SSR. The SSR certificate will however be sufficient to satisfy foreign authorities if the vessel is taken out of UK territorial waters.
Part 1 Registration lasts 5 years and must then be renewed. SSR registration also lasts 5 years.
A vessel can be arrested in order to obtain security for a wide range of claims relating to the vessel concerned. These include claims for damage done by the vessel, in respect of injuries sustained on board the vessel, for payment for goods supplied or services rendered to the vessel, in respect of the disputed ownership of the vessel or for unpaid wages due to the crew. We can advise on other types of claim which may also give rise to a right to arrest.
When two or more vessels are owned by the same party they are known as sister ships. It is possible to arrest one sister ship in respect of a claim in connection with another of the sister ships provided that both vessels were owned by the same party at the time when the cause of action giving rise to the claim arose and when the claim form is issued and served.
No. All that is required is an undertaking by the solicitor instructed to make the arrest to pay the Admiralty Marshal’s reasonable costs in serving the arrest warrant. However, it may be necessary to pay expenses incurred as result of the ship being detained, including for example berthing charges throughout the period of arrest. These can be added to the claim and be recovered out of the proceeds of sale if the matter proceeds to that stage.
Most maritime claims are dependent upon the ownership of the vessel. The vessel can only be arrested provided that the party who was the owner at the time that the cause of action arose is still the owner at the time of arrest. Maritime liens can however be enforced irrespective of ownership and entitle the claimant to issue a claim and to arrest the vessel despite a change of ownership. Maritime liens apply only to claims for salvage, crew wages, damage done by a vessel and Master’s wages and disbursements.
Subject to the receipt of all documentation relevant to the claim, the papers can be lodged with the court within a matter of hours. The actual arrest will be dependent on the availability of an Admiralty Marshal’s representative (often Border Force) in the port or harbour where the vessel is to arrested but should be effected within 24 hours of the warrant being issued.
Once a vessel is arrested it remains in the custody and control of the Admiralty Marshal until adequate security for the claim is provided by the owner or insurer of the vessel or the claim is settled or withdrawn or until judgement is obtained and an order is made for the appraisal and sale of the vessel by the Admiralty Marshal.