Brussels Conference on Nuclear Third Party Liability and Insurance

February 16, 2014

A Conference on Nuclear Third Party Liability and Insurance, co-organised by the European Commission (EC), the European Economic and Social Committee and the Brussels Nuclear Law Association (BNLA), was held in Brussels on 20-21 January 2014.

This two-day conference gathered more than 300 professionals from governmental, intergovernmental, academic and non-governmental institutions, as well as from nuclear industry and insurers.

The conference provided an opportunity to discuss:

• the outcomes of the public consultation conducted in 2013 (NTPL and insurance issues) by the European Commission;
• the recommendations adopted by a EU Expert Group on Nuclear Third Party Liability.

Recommendations of the Informal Expert Group on Nuclear Liability

The recommendations presented during the conference were divided into three different categories:

1. Claims Handling and Related Matters,
2. Insurance, Operators’ Pools and Other Financial Security,
3. Nuclear Liability Amounts and Other Areas.

It was emphasized by the Group that all proposals were subject to confirmation of EU competence under the Article 98 of the Euratom Treaty, to the subsidiarity and proportionality principles, as well as to their compatibility with the revised Vienna Convention (1997) and the revised Paris Convention (2004).

Working Group 1 – Claims Handling and Related Matters

The recommendations of WG 1 were addressed to the entire process of claims management, in its three different parts:

1. claims registration,
2. claims handling,
3. claims settlement,

WG agreed that recommendations regarding claims management within the European Union should remain non “regime-dependent”, so they can be applied in the same manner. In order to obtain views on claims management, a questionnaire was sent to almost all nuclear insurance pools operating in the EU and Switzerland and to all NPP operator pools active in the EU.

Seven recommendations were presented by Working Group 1:

1. Member States (MS) having nuclear installations on their territories should have a claims management system up and running
   – for this purpose Member States shall ensure that entities providing financial securities have and maintain an appropriate claims management system.
2. MS to establish a “one stop shop” for claims registration and record
   – MS shall designate a single entity or set of entities for claims registration, however, the entity should not be a permanent structure.
3. Establish criteria for EU-wide claims handling communication in the case of an accident
   – appropriate communication guidelines shall be established on the EU level;
4. Establish “one single desk” for claims handling (national level)
   – WG presented several objectives of this recommendation, such as: ensuring coordination between all stakeholders, namely the national authorities, the liable operator; enabling the centralization of infromation regarding funds allocation etc.
5. Allow for the assessment of insurers abilities by national authorities
   – this recommendation is addressed to technical, not financial capacities.
6. Set up rules for advance payments on compensation
   – implementation through EU Guidelines for the MS to set up rules and criteria for advance payments on compensation.
7. Clarify how claims management costs are born
   – the objective is to clarify with whom claims-handling costs lie and the amount of these costs. Moreover, MS shall ensure and control that liability amounts are exclusively dedicated to the compensation of damage.

 Working Group 2 – Insurance, Operators’ Pools and Other Financial Security

WG 2 emphasized in the introductory remarks that it has focused on several questions of importance including but not limited to:

• the third party liability framework currently in operation within the EU.
• the present financial obligations of the various nuclear operators and the solutions put in place to meet such obligations throughout Europe.
• the possibilites of the insurance market to cover both the increased limits and the enlarged risks as per the revised Paris Convention.
• the other ways to cope with the financial obligations of ther opearators and the financial soundness of the various options and the ways to meet even larget limits.

Moreover, as stated by WG 2, the  Group took into consideration the position and interests of MS without nuclear installations, the various merits of economic channelling and legal channeling and the sustainability of higher liability limits.

Four recommendations were presented by Working Group 1:

1. The Member States must work jointly with nuclear operators and nuclear insurance providers, to put in place cover that fulfills the revised Convention requirements and ratify the applicable Convention as soon as possible.
2. The EU Commission is to clarify and communicate the acceptable conditions under which EU States are allowed to act, directly or indirectly, to cover nuclear third party liability risks (e.g. for the uninsurable Convention new heads of damage, limits and cover extentions).
3. Ensure that all financial security provided is sufficiently secure, stable and solvent to guarantee maximum protection for nuclear accident victims; also ensure that a robust and effective claims handling system is put in place.
4. In the longer term the operators and financial security providers are to continue working together to investigate any additional nuclear liability capacity that might become available in the future.

 Working Group 3 – Nuclear Liability Amounts and Other Areas

WG 3 emphasized that number of different issues had to be taken into consideration, such as:

• the exsiting conventional structure within the EU.
• the position and interests of the EU Members without nuclear installations.
• unlimited vs. limited liability, the application of the common law, economic vs. legal channeling.
• the need for improvement of victims’ position, etc.

Recommendations of WG 3:

• EU Decisions:
  A1. All EU Members are required to join the VC or the PC as amended respectively in 1997 or 2004
  OR
  A2. EU Members wishing to join the VC or the PC should ratify exclusively the VC or the PC as amended respectively in 1997 or 2004
  B. All EU members Parties to either the VC or the PC are urged:
  i) to adhere as soon as possible to << their >> respective amending Protocols of 1997 and 2004 (this sub-section (i) to be deleted if Option A1 is retained above) and,
  ii) if they have not already done so, to adhere to the Joint Protocol.
• EU Directive: As stated by WG 3, such directive should “recognize the relevance and robustness of the basic principles of the VC (1997) and PC (2004) establishing the rules of a unified regime of nuclear liability and the importance of the Joint Protocol. Unified regime should address issues of inter alia strict liability, legal channelling, the right to limit the operator’s liability in amount and in time, the obligation of the operator to cover its liability by insurance or other financial security.

The provisions of the Directive would:

• establish amounts for nuclear thir party liability and compulsory financial security up to these amounts in line with the PC (2004) provisions,
• require MS to to ensure that, up to the amounts quoted under 1, compensation available under their legislation shall indemnify victims in all EU MS without discrimination based upon nationality, domicile or residence.

See the Program of the conference:  

http://ec.europa.eu/energy/nuclear/events/20140120_nuclear_third_party_liability_and_insurance_en.htm

All presentations from the conference are available here:

http://ec.europa.eu/energy/nuclear/events/doc/20140120_nuclear_third_party_liability_and_insurance_presentations.zip

reported by:
Łukasz Młynarkiewicz

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