For these reasons, an international agreement setting up such a régime is desirable. Such an agreement, supplementing the measures applied in the related and important fields of public health and safety and the prevention of accidents, may also facilitate the solution of third party liability problems at a national level.
The Convention does not apply to nuclear incidents occurring in the territory of non-Contracting States or to damage suffered in such territory, unless the national legislation of the operator liable otherwise provides [Articles 2 and 23(a)], but with one small exception which grants certain persons rights against operators even though operators are not liable under the Convention (see paragraph 37). The term "territory" as used in the Convention is understood to include territorial seas (2).
A nuclear incident is defined as any occurrence or succession of occurrences having the same origin which causes damage, provided that the occurrence or succession of occurrences, or any of the damage caused, are due to radioactivity or a combination of radioactivity with toxic, explosive or other hazardous properties of nuclear fuel or radioactive products or waste or due to ionizing radiations emitted by any other source of radiation which is inside a nuclear installation, as defined in the Convention. Thus, for example, an uncontrolled release of radiation extending over a certain period of time is considered to be a nuclear incident if its origin lies in one single phenomenon even though there has been an interruption in the emission of radioactivity. With this definition of "nuclear incident" it is clear that where both the occurrence and the damage are due to radioactivity, compensation may be claimed. Similarly, where the occurrence and the damage are conventional, there will be no claim. Compensation may, however, be claimed under the Convention either where an occurrence due to radioactivity causes conventional damage or injury or where an occurrence of conventional origin causes radiation damage or injury.
The situation may arise, however, where both a nuclear incident and a conventional occurrence are so closely interrelated that the resulting damage or loss may be said to have been caused jointly by the nuclear incident and such other occurrence. In such case, to the extent that the damage or loss caused by the conventional occurrence is not reasonably separable from that caused by the nuclear incident, such damage or loss is considered to be damage caused by the nuclear incident and thus compensation in respect thereof may be claimed under the Convention [Article 3(b), first sentence].
Where, however, damage has been caused jointly by a nuclear incident and an emission of ionizing radiation not covered by the Convention given that the source is outside a nuclear installation and is not constituted of materials covered by the Convention it has been provided in order not to prejudge the assignment of liability in such a case, that the Convention does not limit or otherwise affect the liability of any person in connection with such an emission of ionizing radiation [Article 3(b), second sentence].
Some activities, as for example, mining, milling and the physical concentration of uranium ores, do not involve high levels of radioactivity and such hazard as there is concerns persons immediately involved in those activities rather than the public at large. Hence, these activities do not fall within the scope of the exceptional régime of the Convention. Factories for the manufacture or processing of natural or depleted uranium, facilities for the storage of natural or depleted uranium, and the transport of natural or depleted uranium, since the level of radioactivity is low and there are no criticality risks, are also excluded.
Installations where small amounts of fissionable materials are to be found, such as research laboratories, are likewise outside the Convention. Particle accelerators, too, are excluded. Finally, where materials, such as uranium salts, are used incidentally in various industrial activities not related to the nuclear industry, such usage does not bring the plant concerned within the scope of the Convention.
Two primary factors have motivated in favour of this channelling of all liability onto the operator as distinct from the position under the ordinary law of torts. Firstly, it is desirable to avoid difficult and lengthy questions of complicated legal cross-actions to establish in individual cases who is legally liable. Secondly, such channelling obviates the necessity for all those who might be associated with the construction or operation of a nuclear installation other than the operator himself to take out insurance also, and thus allows a concentration of the insurance capacity available.
A Contracting Party may decide that, where one person operates a number of nuclear installations at the same site, these installations are to be treated as a single nuclear installation; this decision may include other premises on the same site where radioactive material is held but which are not nuclear installations as defined in the Convention [Article 1(a)(ii)]. Apart from possible advantages from the insurance point of view of all the installations on the site being grouped together, such a decision would enable victims to benefit from the same compensation régime without having to establish where on the site the incident originated.
- with regard to damage to the nuclear installation itself or to on-site property (as well as to any other nuclear installation on the same site) (see paragraph 40) [Article 3(a)(ii)] for which the operator is not liable under the Convention, the Convention leaves it to the ordinary rules of law to determine the liability of an individual where such damage results from an act or omission of that individual done with intent to cause damage [Article 6(c)(i)(1)]; such is also the case for damage for which the operator is not liable by virtue of Article 9 (see paragraph 48);
- in addition, the Convention does not affect the liability of a person duly authorized to operate a reactor comprised in a means of transport where no operator is liable, under the Convention, for damage caused by nuclear substances coming from or going to that reactor [Article 6(c)(i)(2)] (see also paragraph 11).
Finally, this rule does not affect certain existing international agreements in the field of transport (see paragraph 35) nor is it intended to affect the rules of public international law with regard to any possible responsibility of states towards each other [Annex II to the Convention].
In the ordinary course of law, on the contrary, should an incident arise due to a defect in design or in material supplied, a person suffering damage may well have a right of action against the supplier, for example, on the basis of the so-called products liability.
Secondly, rights of recourse may be exercised by the operator liable where and to the extent that they are expressly provided for by contract [Article 6(f)(ii)]. These rights of recourse may, of course, be exercised by the insurer or other financial guarantor by way of subrogation.
The provisions of Article 6(f) relating to the operator's right of recourse do not include his rights to recover from joint tortfeasors in the case where more than one operator is liable.
It would seem normal, in the case of transport, for the carrier to be the person liable and this is the present situation at common law. However, in the case of nuclear substances, very special considerations are involved. The carrier will generally not be in a position to verify the precautions in packing and containment taken by the person sending the substances. Moreover, if the carrier is to be liable he will have to obtain the necessary insurance coverage in respect of potentially high liability, and this would result in increased transport charges for the operator. Transport insurance ordinarily covers only the value of the goods transported, i.e., their loss or destruction, and does not extend to damage which such goods may cause to third persons.
Similarly, in the case envisaged in paragraph 26, the operator for whom the nuclear substances are destined is normally liable only from the moment when the substances leave the territory (territorial waters included) of the non-Contracting State. He will be liable on such territory only if this same extension of the territorial field of application of the Convention has been made under his national legislation.
Where, in respect of the carriage of nuclear substances coming from or destined for different operators, the carrier has assumed, by substitution, the liability of each of the operators concerned, such carrier is considered as if he were each of the different operators concerned and the rules relating to liability of more than one operator will apply in the same way as if there had been no substitution.
Where the operator liable is at the same time the carrier, for example, where he transports nuclear substances on his own means of transport, these two possible actions may be brought against one person. In this case, however, the operator cannot take advantage of the provisions of international agreements in the field of transport to reduce or alter his liability under the Convention.
The rules relating to damage or loss caused jointly by a nuclear incident and by an incident other than a nuclear incident or caused jointly by a nuclear incident and by an emission of ionizing radiation not covered by the Convention (see paragraph 8) apply equally to nuclear incidents occurring in the course of transport.
All these rules relating to transport apply to all the different means of transport.
Furthermore, the nuclear operator must compensate damage to the means of transport upon which the nuclear substances involved were at the time of a nuclear incident occurring in the course of carriage and outside a nuclear installation.
However, the compensation of damage to the means of transport must not have the effect of reducing the liability of the operator in respect of other damage to less than either 5 000 000 Special Drawing Rights (SDRs) of the International Monetary Fund (see paragraph 43) or, since this amount of 5 000 000 SDRs is considered to be a minimum, any higher amount established by the legislation of a Contracting Party [Article 7(c)]. In practice, if the damage other than that to the means of transport is less than this amount, the part of the amount not used is available, if necessary, for compensation for damage to the means of transport. On the other hand, if other damage is more than 5 000 000 SDRs, there may be proportional distribution of the total amount available to cover all the damage including damage to the means of transport. This might involve paying compensation of more than 5 000 000 SDRs for other damage but cannot result in reducing the amount of compensation for such other damage below 5 000 000 SDRs.
Where property belongs to the operator himself, no action for compensation would lie in any event since a person cannot sue himself.
The maximum liability in respect of any single nuclear incident, whether occurring at or in connection with a nuclear installation or in the course of carriage of nuclear substances, has been fixed at 15 000 000 SDRs (8). However, it is possible to derogate from this amount in two ways.
In the first place, a Contracting Party may, taking into account the possibilities for the operator of obtaining insurance or other financial security up to the level normally required under the Convention [Article 10], establish by legislation either an amount greater than 15 000 000 SDRs or a lower amount; such lower amount may not, however, be less than 5 000 000 SDRs [Article 7(a) and (b)].
In the second place, a Contracting Party may also establish a limit of liability at less than 15 000 000 SDRs when the nuclear installation or, in the case of carriage, the nuclear substances involved are not considered by that Contracting Party as likely to cause great damage as compared to the other nuclear installations and transports referred to in the Convention (e.g. certain small research reactors or laboratories). The aim of this option is to avoid burdening the nuclear operators concerned with unjustified insurance or financial security costs; its use, however is subject to the condition that the reduced amount so established may not be less than 5 000 000 SDRs (9).
A further complication is the difficulty of proof involved in establishing or denying that delayed damage was, in fact, caused by the nuclear incident. A compromise has necessarily been arrived at between the interests of those suffering damage and the interests of operators.
A period of ten years running from the date of the nuclear incident is provided, after which a right to compensation is extinguished if no action has been brought before a competent court [Article 8(a)].
Where nuclear fuel or nuclear substances have been stolen, lost, jettisoned or abandoned it is provided that, while the period of ten years is to be calculated from the date of the nuclear incident, it shall in no case exceed a period of twenty years from the date of the theft, loss, jettison or abandonment [Article 8(b)]. It seems that insurers will not be able for the time being to give cover for a period exceeding ten years from the date of the theft, loss, jettison or abandonment of nuclear substances.
States may, however, establish a shorter period of not less than two years running from the time when the damage and the operator liable have become known to the victim or ought reasonably to have become known, provided that the ten-year period is not exceeded [Article 8(c)]. This shorter period may constitute a conventional period of prescription which may be suspended or interrupted even, where this is recognized, by a mere extrajudiciary demand, provided always that such suspension or interruption does not have the effect of prolonging the period beyond ten or twenty years, as the case may be. On the other hand, the shorter period may be an absolute period after which no right to compensation exists.
Proceedings may also be brought after the ten-year period in two cases. Firstly, if under the national legislation of the operator liable his liability is covered for a longer period, the law of the competent court may provide that proceedings may be brought during such longer period. Any such extension of the period, however, may not affect the rights of compensation under the Convention of any person who, within the ten-year period, has brought an action against the operator in respect of loss of life or personal injury [Article 8(a)]. Secondly, a person who suffers an aggravation of the damage for which he has already brought an action for compensation within the time-limit laid down, may amend his claim after the expiry of the time-limit provided that no final judgment has yet been entered by the competent court [Article 8(e)].
The rules governing the choice of the competent court are laid down in Article 13 (see paragraphs 54-56) and where the courts of more than one Contracting Party might be competent, the competent court is left to be determined by the European Nuclear Energy Tribunal [Article 13(c)(ii)]. In these cases a victim cannot bring his action until the Tribunal has made its determination. In order to deal with this situation, it is provided that the right to compensation shall not be extinguished if, within the time-limits provided for in accordance with the Convention, prior to the determination by the Tribunal, an action has been brought before any of the courts from which the Tribunal can choose or a request has been made to a Contracting Party to institute a determination pursuant to Article 13(c)(ii) by the Tribunal and an action is brought subsequent to such determination within the time, if any, fixed by the Tribunal [Article 8(d)].
The only exonerations lie in the case of damage caused by a nuclear incident directly due to certain disturbances of an international character such as acts of armed conflict and hostilities, of a political nature such as civil war and insurrection, or grave natural disasters of an exceptional character, which are catastrophic and completely unforseeable, on the grounds that all such matters are the responsibility of the nation as a whole. No other exonerations are permitted. The national legislation of the operator liable may, however, provide that he is to be liable even in the case of a grave natural disaster of an exceptional character [Article 9].
Where the incident or damage is caused wholly or partly by the person suffering damage, it will be for the competent court, in accordance with national law, to decide the effect of such negligence upon the claim for compensation.
As has been pointed out (see paragraph 16), where the operator is exonerated, if the applicable law so provides an individual may be liable for damage caused by a nuclear incident resulting from that individual's act or omission done with intent to cause damage.
Although the operator will thus be required to have financial security available for each nuclear incident, in practice insurance coverage will, it seems, only be available per installation for a fixed period of time rather than in respect of a single incident. There is nothing in the Convention which prevents this, provided that the maximum amount available is not reduced or exhausted as a result of a first incident without appropriate measures being taken to ensure that financial security up to the maximum amount is available for subsequent incidents.
It is for the competent public authority to determine the type and terms of the insurance or other financial security which the operator will be required to hold. The type and terms envisaged do not imply the establishment of a supervisory authority in the field of insurance in those countries where control by such an authority over insurance activities does not at present exist, but only the control necessary to ensure compliance with the Convention. Thus the competent public authority must ensure that insurance policies are satisfactory in that they do not contain clauses which might render them ineffective, for example, that the insurer or other financial guarantor cannot put up any defences such as non-payment of premiums against persons seeking compensation.
Whatever conditions are laid down by the competent public authority, something untoward could happen, such as where the financial guarantor is bankrupt, or where insurance is per installation for a fixed period and after a first incident it is impossible to reinstate the financial security up to the maximum liability of the operator. It was recognized that these circumstances could not set aside the obligation of the operator under Article 10 or that of the State which is required to ensure that the operator always holds financial security up to his maximum liability. The Contracting Parties may therefore be led to intervene in such a situation to avoid their international responsibilities being involved.
Where one operator operates two or more reactors or other nuclear installations on a site, and the Contracting Party concerned has not, pursuant to Article 1(a)(ii), determined that they shall be treated as a single installation, that Contracting Party will nevertheless have to decide whether it is necessary for the operator to have and maintain insurance or other financial security for each of the nuclear installations or for the site as a whole.
The guiding principle is that financial security must be available in the amount established in accordance with Article 7 for each nuclear incident, whatever system is adopted by the competent public authority in regard to licensing and insurance of nuclear installations.
The relations between the operator and the insurer or other financial guarantor, for example, with regard to rights of recourse against the operator by these persons, are left to be settled by each State.
The general rule is that a court of the Contracting Party in whose territory the nuclear incident occurs has jurisdiction [Article 13(a)].
Where the nuclear incident occurs partly outside the territory of the Contracting Parties and partly within the territory of one of them, a court of that one Contracting Party has jurisdiction [Article 13(c)(i)].
In any other case jurisdiction will lie with one of the courts which would have been competent, determined, at the request of a Contracting Party concerned, by the European Nuclear Energy Tribunal as being the most closely related to the case in question [Article 13(c)(ii)].
Final judgments enforceable under Article 13(d) do not include judgments rendered against persons other than the operator liable under Article 6(b), judgments rendered in actions in recourse by the operator under Article 6(f), actions against the operator under Article 6(h) or actions for contribution between persons jointly and severally liable.
The relations between the State and operators in so far as actions by the State against its operators are concerned, are left to be settled by each State.