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Legal framework for towage in the digital era
Campbell Johnston Clark director Helen McCormick sets out significant changes to the UK’s standard conditions for towage
A key offshore and towage contract has undergone a major review for the first time in nearly four decades. The UK standard conditions for towage (UKSCT) and other services 2024 was introduced in November last year and provides a modern legal framework intended to bring tug operations into the digital era.
First introduced in the 1920s and last revised in 1986, the UKSCT has long served as one of the key contracts for tug owners. It provides liability protection and legal certainty that allows insurers to assess and underwrite the particular risks associated with tug operations – often carried out in hazardous or high-pressure environments.
As shipping technology has evolved, so too have the complexities of tug operations. Experts in the industry, such as Targe Towing managing director Nick Dorman, have described the 1986 version as lacking the language to allow it to be relevant in a contemporary world of, among other things, automation, electronic systems and digitalisation.
Among the key issues is the way in which modern communications have altered the definition of proximity – a concept critical to the 1986 terms.
The traditional requirement for a tug to be in physical closeness to receive instructions is now outdated when orders can be transmitted instantaneously from many miles away.
“The new conditions seem to preserve the strengths of a well-known framework”
One of the most significant revisions is the removal of clause 4(e), which had been inserted in 1986 in response to the unfair contract terms act 1977 (UCTA). That clause was intended to clarify that nothing in the conditions excluded a tug owner’s liability for death or personal injury arising from negligence, as a requirement of UCTA.
However, subsequent legal interpretations of UCTA have clarified that while contracts cannot exclude liability for personal injury or death caused by negligence, they can allocate that liability between commercial parties.
As such, clause 4(e) was no longer necessary, and it has been excised from the new 2024 edition. Clause 4(b), which deals with the hirer’s indemnity to the tug owner, has also been refined, including the addition of the phrase “whether direct or indirect” to ensure clarity on consequential losses, referencing the legal test in Hadley v Baxendale.
Notably, a complex six-part liability test in clause 4(c), relating to the unseaworthiness of a tug, has been replaced with a simpler provision. Now, to bring a claim outside the normal exclusions, the hirer must demonstrate that the tug owner acted with intent or reckless disregard for probable harm.
Other technical changes include simplifying language throughout the document, aligning it more closely with modern contract drafting standards and international maritime conventions.
In another step toward flexibility, clause 9 – which sets out governing law and jurisdiction – now explicitly permits parties to agree to a legal framework other than English law, or to choose an international dispute resolution forum. This brings the UKSCT into alignment with the realities of a globalised industry.
With just under a year having passed since the 2024 version of the UKSTC was introduced, it remains to be seen what impact these new terms will have on claims. However, with the simplification of the terms and their adaptation to a new and ever-changing technical environment, the new conditions seem to preserve the strengths of a well-known framework, ensuring their continuing relevance not just for towage operations in the UK, but further afield, in the years to come.
The changes introduced in 2024 were explored by a recent panel discussion event hosted by Campbell Johnston Clark. The panel was chaired by director, Helen McCormick, with Alex McCooke and Rob Shearer from Shipowners P&I Club, and an introduction from Robert Merrylees of the British Tugowners Association.
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