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REFLECTIONS ON THE INTERNATIONAL NUCLEAR LAW ASSOCIATION CONGRESS IN ABU DHABI (PART 4 OF 7): FINANCIAL ASPECTS OF NUCLEAR LIABILITY

Prospect has been invited to attend the bi-annual meeting of the International Nuclear Lawyers Association (INLA) in Abu Dhabi from 4-8 November 2018 – click here to see further information about the event 

On 5th November 2018, The International Nuclear Law Association congress in Abu Dhabi held important sessions on Nuclear Liability and Insurance.

In the continuing session of the International Nuclear Law Association congress in Abu Dhabi, on 5 November 2018, on Nuclear Liability and Insurance, speakers covered some new developments in the area of nuclear liability and insurance, and returned to the familiar topic of the ‘channelling principle’ and whether there should be a right of recourse by nuclear operators against suppliers.

Jamie Fairchild, Canada talked about ‘Canada’s New Nuclear Civil Liability Regime: its key features and Operationalization’. He described the Nuclear Liability and Compensation Act, which came into force on 1 January 2017, and replaced the earlier Nuclear Liability Act. Operator exclusive liability would rise from CAN$75 million to CAN$1 billion.

Ben McRae, Assistant General Counsel, U.S. Department of Energy, USA gave a talk on ‘Examination of Continued Viability of the Channelling Principle, Taking into Account Recent Issues Raised by the Treatment of the “Right of Recourse” in Certain National Laws’.

Mr McCrae referred to section 17 of the Indian nuclear liability law, providing for a statutory right of recourse. In subscribing to the Convention on Supplementary Compensation ‘CSC’, India deposited a declaration that this was consistent with the CSC. Mr McCrae said that he personally thought that a right of recourse, by the operator against suppliers, made no sense, as it simply increased costs and the needs for extra insurance, although he conceded that it might be possible under the Convention. He thought that it would not be to the benefit of individual victims to have to be mired in tort litigation trying to attribute fault between parties.

Helena Kazamaki, ABB, France gave an address on the topic ‘Is Channelling at Risk?’, asking whether the principle in nuclear liability conventions that exclusive liability be channelled to the nuclear operator was under threat, and consider what implications that might have.

As a supplier, she said that ABB saw the right of recourse as an issue relevant to intentional acts, for negotiations by contract, or where the right of recourse was mandated by law, as in India. She gave a sobering assessment of the potential impacts of allowing a right of recourse against suppliers to become established in nuclear liability laws, and thought that the role of insurance in providing cover would be very important.

Alain Quéré , Switzerland and Achim Jansen-Tersteegen, Germany gave a useful introduction to the work of nuclear insurance pools. Ken Manne of NEIL, USA, presented on the comparative merits of captive mutual insurance, insuring over 90 operation nuclear units in the US and generating multi-billion dollar surpluses in coverage.

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

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