UNIDROIT CONSULTATIONReflections

on the Legal Framework for TPL for GNSS

Rome, 22 October 2010

Prof. Dr. Lesley Jane Smith, LL.M. Leuphana Universität Lüneburg

Weber-Steinhaus & Smith, Bremen

Prof. Dr. Lesley Jane Smith, LL.M.

Open Issues

• Clarification – possible gains and costs of a TPL system for GNSS (Galileo)

• Regulatory imperatives• Trade-offs - existing TPL Liability regimes • Current debate on appropriate forum

– National/ EU-ESA/ International?– Responsibility, liability and legal certainty– Avoiding diversity thru’ access to multiple jurisdictions

• Guidance from space law blueprints on liability• Perspectives

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Contract

GNSS duties towards users

Tort

Legal Framework for Provision of Satellite Navigations Services

CONTRACT- BASED SATELLITESERVICES

FREE SERVICES

• SoL= user charge• CS = (fee) • Guarantee• Operable via EGNOS by 2010___________________• PRS: = encryptedservices to MS _________________• SAR = COSPAS SARSAT/ no liability

OS EGNOS Public providers Public usersCommercial usersPrivate users/ beneficiaries ___________________

GPS US, military, no liability as provider abroad (Art 28 Chicago), waiver tosovereign immunity for US citizens, Interoperable/ GNSS

In terms of service providers spec/ contract

Prof. Dr. Lesley Jane Smith, LL.M.

Clarification (1)

• In whose interest?• Operators, providers and users • Concept of damage from signal ‘service’ • Legal relations between parties

– Predominantly contract, but also tort • TPL regime presupposes that other contractual

rules accommodate liabilities – But general space contract practices+ laws contain

waivers and hold-harmless clauses– Signal liability excluded – Contract chain may lead to ‘manufacturer’

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Prof. Dr. Lesley Jane Smith, LL.M.

Clarification (2)

• Dimension of ‘inherently dangerous’ (public) activities not fully assessed

• EU as owner of GNSS system – Delegation of responsibilities to Operator delivering

services – Duty to ensure maintenance of service

• How is system to be provided at national level?• Commercial/ public interface:

– Business model for 5 services –– Guarantee etc – OS; CS; PRS, SOL; SAR

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Prof. Dr. Lesley Jane Smith, LL.M.

Clarification (3)

• Following issues important in absence of TPL regime:

• Organisational liability (agency, consortium)– Owner liability – Manufacturer’s liability – Product liability

• Or should loss lie where it falls?– Much depends on organisation of final provision of

services – Issue of inter-operability underlines advantages of

strict regime– Possibly speaks for independent regime

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Prof. Dr. Lesley Jane Smith, LL.M.

Clarification (4)

• EU ownership of Galileo, EGNOS– Art 8 Reg 683/2008; EGNOS agreement 2009

• Extent of EU liability for Galileo system – As expanded per Reg.1321/2004 – Art 17(1) contractual liability– Art 17(2) tort liability – According to common general principles

• GNSS standardisation– Safety, integrity, accreditation, – Compliance with standards no defence in civil law

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Prof. Dr. Lesley Jane Smith, LL.M.

Clarification (5)

• Rationale behind operator liability – Limitation of liability – Channelling of liability – Insurance-backed system

• Focus of international space law (OST/LIAB) is unlimited liability – Based on ‘liquidity’ of space-faring states– Inherently dangerous activities – GNSS – safety tool

• Presumption that radio signals excluded from scope of UN Treaties may not hold

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Providers and Users of Navigation Signals

ICAO, IMSO, ICG etc.Standardisation SARPS+CertificationAuthorities

ICAO, IMSO, ICG etc.Standardisation SARPS+CertificationAuthorities

innocent beneficiaries/ innocent bystanders

innocent beneficiaries/ innocent bystanders

Manufacturers / providers of receivers/ navigation equipment

Manufacturers / providers of receivers/ navigation equipment

Satellite image courtesy of ESA

Ground station operator(s)- thereafter added value providers

Ground station operator(s)- thereafter added value providers

NAVIGATION COMMUNITIESAirMaritimeRoad + Rail Transport

NAVIGATION COMMUNITIESAirMaritimeRoad + Rail Transport

Satellite Owner/ Operator

Satellite Owner/ Operator

Prof. Dr. Lesley Jane Smith, LL.M.

Clarification (6)

• Victim orientated systems = – Strict liability imperative– Proof of causation and damage, not fault

• Systems with limited liability – ‘Trade-off’ limiting liability against channelling liability

to operator– Exclusivity? – Access to national courts weakens effect of special

regime• Protection of innocent bystander/ TPL

– GNSS as tool to assist timing, positioning, navigation– Inherently dangerous activities?

10t

Responsibility within GNSS ‘Governance’

• Immunity at state level for (commercial) services – = acta iure gestionis

• Applicability of international space law to EU? • Immunity from suit for EU?

– EU now has legal personality, Art 47 TEU

• EU liability regime important– in keeping with its own obligations– ‘State’ and/or private rights of recourse against

operator at national or EU level?

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Liability matrix of satellite manufacturers or service providers

contractscontracts

Primes/ manufacturers

Primes/ manufacturers

Subs or equipment

manufacturer

Subs or equipment

manufacturer

Service providerService provider

Public bodies/ services

Public bodies/ services

Commercial Public/privateCommercial Public/private

Other users contracted

Other users contracted

Tort lawTort law Product liabilityProduct liability

O.S.no contract innocent

beneficiariesbystanders

O.S.no contract innocent

beneficiariesbystanders

Services as defined per contract or public statement

Otherwise Tort / product liability law

Software defect SIGNAL DEFECT

-Product?

Services as defined per contract or public statement

Otherwise Tort / product liability law

Software defect SIGNAL DEFECT

-Product?

Comparison: Third party liability/ French Law 2008

• Efficient liability mechanism for commercial sector

• Operator liable only within time limit (1 yr)• State liability kicks in for operator after

expiry of 1 year• Signals excluded from ambit• Launches from France or EU territory

– French law: two phases – launch and in orbit– France guarantees liability above ceiling, limit

only for damage on earth

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Avoid competing claims and divergent outcomes

Third party liability– Opening for victims otherwise excluded

• Definition of manufacturer – Includes part-manufacturers

• Special product liability regimes (co-exist alongside general tort law)– Generally strict– No contracting out (unless industry agreement

to share burden at same level, no end-users)– Includes suppliers, especially in absence of

available manufacturer

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Exploitation system –method of distribution

• Strict liability– No contracting out (unless industry agreement

to share burden at same level, no end-users)– Suppliers are liable, especially in absence of

available manufacturer

• Users and End-Users– Statutory exceptions to exclusion of liability

towards non-commercial users– Subject to legal control

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Avoid competing claims and divergent outcomes

• Litigation in non-EU jurisdictions attractive – Keeping pace with liability scenario

•Foreign jurisdiction over claims– lex loci commissi– Not to be excluded

•No unitary EU law of conflicts– Applicable law harmonised – Rome I and Rome II (foreign law can apply)

• Leave each region to settle its own claims– Could be response to multiple GNSS systems

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TBD /Perspectives

• Current state of dialogue

• Open issues - aligning regulation of liability – for EU GNSS system– International level / Cf. UNIDROIT discussions

• Contractual structures for provision of GNSS services in EU and beyond, tbd

• Interoperability: a system-related issue– Cost possibly easier to manage at regional level– EU solution open to bilateral agreements

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