5 Liability and insurance
A central aspect of the proposed legal text is the Chapter (5) on liability and insurance.(1)For a detailed discussion of these issues in the committee’s work, see Trine-Lise Wilhelmsen, Ansvar for skade voldt av romgjenstand [Liability for damage caused by a space object], Tidsskrift for erstatningsrett, forsikringsrett og trygderett, Årgang 17 , nr. 1 -2020, s. 39–71, https://doi.org/10.18261/ISSN.2464-3378-2020-01-03. These are the two requirements which show the tension between the 'industry friendly' objective of the space law reform and the risk and safety considerations. As the ultra-hazardous nature of space activities suggests, the primary task of the legislator is to establish a legal framework, which prevents accidents from happening, through the requirements described earlier. Generally, the probability of damage being caused by an accident related to the launch of a space object (assuming the safety is adequately assured) is relatively low; however, the consequences could be disastrous if it happens.(2)On the Cosmos 954 accident, see, e.g., Lyall&Larsen (fn. 20). The international legal framework described earlier places liability for damage on the launching State (or States), which will be internationally liable for damage caused by the space object on the Earth's surface, atmosphere and(or) in outer space. The concern is especially serious with regard to forthcoming launches of small satellites into orbit from Andøya: indeed, as explained earlier, Norway is internationally liable for damage caused by space objects launched by the governmental and private (Norwegian or foreign) operators from its territory.
The central question is whether national law should envisage opportunities for recourse against an operator in cases where Norway as a launching State is held internationally liable under the international liability regime for damage caused by the space object. Another question is whether the operator should be directly liable for damage going beyond the scope of international liability provisions. A question of insurance also arises: should the law envisage a mandatory insurance and (or) other form of security of compensation?
The space law in force does not expressly regulate the issue of liability, compensation and insurance, but it would be feasible to impose such requirements on operators in light of Norway's international liability as a launching State.(3)See Right into Orbit (fn. 13), p. 101. See also Act relating to electronic communications (The Electronic Communications Act) # 83 adopted on 4th July 2003, para 6-7. However, it may be more reasonable to lay down such provisions in the legal among other points, this enables the injured private persons to seek compensation directly from the operators in the national courts.
Section 21 of the proposed law provides that the operator is "irrespective of fault liable for damages to persons and property on earth as well as aircraft in flight caused by space objects." The proposed legal text imposes the liability for damage on the operator of space activities. However, the strict liability does not apply if the injured has acted intentionally or grossly negligently, or were injured during the participation in the same launch project. For other types of damage caused by space activities, the operator is liable in accordance with Norwegian law of torts.(4)Article 22. See also Wilhelmsen (fn. 62). Section 23 of the proposed law enables Norway to seek recourse from the operator in cases where Norway has compensated for the damage in line with the international liability rules.
The committee assessed the issue of the amount of compensation to be borne by an operator. The Liability Convention does not contain any limitations on the launching State's liability in cases of damage caused by the space object. Considerations of the foreseeability of economic burdens, insurance and the need to set up an industry-friendly legal framework suggest that the operator's liability should not be unlimited.(5)See Right into Orbit (fn. 13), p. 110. The operator's liability is proposed to be limited to the amount of 600 million Norwegian krone (NOK), unless the operator acted with intent or with gross negligence.
The proposed legal text recommends to provide for a requirement for the operator to hold insurance or other adequate security sufficient to cover the compensation.(6)Article 25 of the proposed law. Some sectors are state-insured. The upper limit of 600 million NOK is also proposed for such insurance coverage. The legislator's task here would be to consider whether this approach to liability is acceptable.
The committee also examined the question of liability in cases of joint launch projects and the feasibility of regulating such cases expressly through the legal text, i.e. by imposing certain rules on the agreements between operators and insurance, and whether strict liability provisions should be envisaged in such cases. As noted earlier, the Liability Convention's provisions on strict liability do not apply in cases of joint launches by two or more States (between these States and their nationals).(7)Article III and VII. In practice, liability issues are resolved by participating States or industry participants, through inter-party cross-waiver of liability,(8)See Steven Freeland, appendix to Right into Orbit (fn. 13). also known as the knock-for-knock principle.(9)Wilhelmsen (fn. 62), pp 66–67. If necessary, such agreements may be regulated through governmental regulations. Lastly, the committee decided not to extend the strict liability provisions to cases where damage is caused through joint launches, but instead to leave these cases to be regulated through general Norwegian torts law.(10)Wilhelmsen (fn. 62), p. 67; Right into Orbit (fn. 13), p. 110.