Compensation for harm caused by nuclear installations: what’s the damage?

Pages17-35
Publication Date09 Apr 2018
DOIhttps://doi.org/10.1108/JPPEL-06-2017-0020
AuthorRobert Lee,Radek Stech
SubjectProperty management & built environment,Building & construction,Building & construction law,Real estate & property,Property law
Compensation for harm caused by
nuclear installations: whats
the damage?
Robert Lee
Birmingham Law School, University of Birmingham, Birmingham, UK, and
Radek Stech
Law School, University of Exeter, Exeter, UK
Abstract
Purpose This paper aims to explain the changes to the liability regime for nuclear installations before
reviewing the traditional heads of damageunder the 1965 Act. It argues that while there is some welcome
clarication of what amounts to an occurrencein the purposes of the 1965 Act, disappointingly, little has
been done to clarify how concepts of personal injury and property damage under the Act sit alongside
traditional tort notionsleaving the law highly dependent on earlier, but not always consistent,case law. The
paper then goes on to consider the impact of the new categories of compensation, introduced by the Order,
evaluating the extent to which these draw upon EU law structures for environmental impairment liability.
Again, it questionswhether this approach will achieve sufcientclarity and certainty.
Design/methodology/approach This paper is a desk-basedlegal research.
Findings This studyis a discussionof statutory material and case law.
Originality/value This paper is a rst in-depthtreatment of changes to liability principles in the Nuclear
InstallationsAct 1965.
Keywords Environment, Compensation, Impairment, Liability, Damage, Nuclear
Paper type Research paper
Introduction
It is hard to conceive of an environmental disaster with greater capacity for harm than a
nuclear accident. The (still projected) costs related to the Fukushima nuclear disaster may
run to ¥21.5tn ($188bn), ofwhich over one-third (¥7.9tn) is accounted for by reparationand
compensation with a further quarter (¥5.6tn) for the cost of treatment and storage of
contaminated soil (Yasunariet al.,2011;Obayashiand Hamada, 2016). These costs in Japan,
lying outside of any compensation regime,fall largely upon Tokyo Electric Power and other
utilities and are borne by cost cutting (and a return to hydrocarbon-based energy) and
higher utility bills. In Western Europe, international conventions provide for an
international liability regime[1] for the payment of compensation following a nuclear
incident (Touitou-Durand, 2010). Recent changes to, and in particular, raised liability
thresholds in these international conventions have generated revised compensation
structures for nuclearaccidents in the UK.
The Nuclear Installations (Liability for Damages) Order 2016[2](2016 Order) amends
the Nuclear Installations Act 1965 (1965 Act)to comply with amended protocols[3] to the
Paris[4] and Brussels Supplementary[5] Conventions (McRae, 1998). The 1965 Act
implements a strict liability regime on operators of nuclear licensed sites for injury or
damage caused by a nuclear occurrence. Operatorsare required to put in place insurance or
Harm caused
by nuclear
installations
17
Received19 June 2017
Revised17 December 2017
21January 2018
Accepted22 January 2018
Journalof Property, Planning and
EnvironmentalLaw
Vol.10 No. 1, 2018
pp. 17-35
© Emerald Publishing Limited
2514-9407
DOI 10.1108/JPPEL-06-2017-0020
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2514-9407.htm
other provision to cover this liability. The changes made to this regime by the Order are
wide ranging. For example, disposal sites for nuclear wasteare brought within the regime.
More potential claimants, including those suffering damage in a non-convention state with
no nuclear installations, can claim up to the Convention limits. These liability caps will rise
in a banded fashion, explained later, depending on the category of installation, in a move
which broadly passes responsibility for nuclear damage away from government and more
rmly onto the nuclear industry. Such a transfer of responsibility constitutes legal
channelling(Trebilcock and Winter, 1997) and is consistent with the world-wide trends
relating to third party liability for nuclear incidents (Ameye, 2010). Limitation periods will
increase also with an extendedlimit of 30 years for death and personal injury and ten years
for other claims[6].
This paper reviews just one area of change introduced by the 2016 Order, namely, the
type of damage for which compensation may be claimed under the 1965 Act and the
relationship of this notion of damage with that both governed more generally by English
common law and by EU law more specically in the eld of environmental liability[7]. The
issue of compensation has been of interest to international lawyers for some time, especially
in the context of the Chernobyl disaster (Barron, 1986,Levy, 1987). The labyrinthine
international regime (Swartz, 2016) in this complex area has developed in response to the
limitations of ordinary common law(OECD Nuclear Energy Agency, 2017). The tort law
constraints have been highlighted by the UK Government during the consultation on the
2016 Order (Departmentof Energy and Climate Change, 2011). Historically, the 1965 Act has
governed claims for personalinjury or property damage arising out of a nuclear incident. To
these traditional heads of damage are added three new related categories of compensation.
These are payable in respect of:
(1) the cost of measures of reinstatement related to the impaired environment;
(2) loss of income deriving from a direct economic interest in any use or enjoyment of
the environment; and
(3) the cost of preventive measures (including measures taken in response to a
threatened occurrence or an event) and any damage caused by such measures[8].
These form an exclusive remedy where breach of the statutory duties under the 1965 Act
has occurred through which liability is channelled to the operator as defendant (Thomas
and Heffron, 2012). The provisions of the 1965 Act concerning the right to compensation
are now subject to consequential amendments to accommodate these additional
categories of claim[9].
This paper will explain these changes to the liability regime for nuclear installations
before reviewing the traditional heads of damage under the 1965 Act. It argues that while
there is some welcome clarication of what amounts to an occurrencein the purposes of
the 1965 Act, disappointingly little else has been doneto clarify concepts of personal injury
and property damage for the purposes of the Act. As things stand, such concepts sit
alongside traditional tortnotions of injury and damage leaving the law highly dependent on
earlier, but not alwaysconsistent, case law. The paper then goes on to considerthe impact of
the new categories of compensation,introduced by the Order, evaluating the extent to which
these draw upon EU law structures for environmental impairment liability. Here too we
argue that given limited jurisprudence on liability under the Environmental Liability
Directive, the precise extent of liability is open to doubt. Before turning, then, to the main
theme of compensation for harm causedby nuclear incidents, the next section offers a short
introduction to the recentchanges made to the liability regime.
JPPEL
10,1
18

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