The new Austrian act on third party liability for nuclear damage.

• Author: Hinteregger, Monika
• Position: Updating International Nuclear Law

1. INTRODUCTION

   On 7 October 1998, the Austrian Parliament adopted the Federal Law on Civil Liability for Damages caused by Radioactivity (1) which completely re-examines the principles governing liability for damages caused by ionising radiation. It governs the operation of nuclear plants, the carriage of radioactive material and the handling of radionuclides. The new liability law entered into force on 1 January 1999 and covers nuclear damages that are caused after this date. It replaces the 1964 Law on Civil Liability for Nuclear Damage (Atomhaftpflichtgesetz), (2) which, however, will remain applicable for nuclear damages caused before 1 January 1999.

   The deficiencies of the 1964 law, discovered by the public in the wake of the Chernobyl disaster, have been the subject of legal (3) and political debate for the last decade. In the first place, it was deemed bizarre that the law only applied to nuclear installations situated in Austrian territory, in light of the fact that the operation of nuclear power plants in order to produce electrical energy is, due to a 1978 referendum, prohibited by law. (4) In Austrian territory there are only three small research reactors, which present comparatively low risks to their environment. The hazards of foreign nuclear power plants, however, were only covered by fault-based liability and nuisance law, (5) originally intended to regulate conflicts between neighbouring land owners. (6) Extremely low liability amounts and the fact that liability was restricted even in cases of negligence on the part of the liable person were considered an unfair privilege granted solely to the nuclear industry.

   In the course of this discussion, heavy opposition was raised against the principle of legal channeling as well. Although Austria has not yet ratified either the Paris (7) or the Vienna Convention, (8) the old Austrian law concentrated liability for nuclear damage exclusively on the operator of the nuclear plant. Combined with the operator's limited liability or limited resources, this inevitably meant a detriment to the legal position of the injured person that was unique in Austrian tort law. Furthermore, releasing every other person, especially the supplier of services or products, from liability, involves the risk of inducing these persons to reduce the level of care exercised.

   It soon became quite clear that the field of third party liability for nuclear damages needed radical change. In 1995 the Austrian Parliament adopted a resolution (9) in which the Federal Government was requested to revise and modernise the Austrian Nuclear Liability Law, and above all to adjust liability amounts to reflect the hazardous nature of nuclear installations, to abate the privileges operators of nuclear plants enjoy under fault-based liability and to eliminate legal channeling. (10) In addition, the Federal Government was ordered not to present the Paris Convention for ratification until essential improvements, namely the elimination of legal channeling, were made. As legal channeling is also indispensable for the accession to the Convention on Supplementary Compensation for Nuclear Damage ("SCC"), (11) this option, temporarily taken into consideration by some political pressure groups, was turned down too. Finally, the Federal Government and Parliament decided to completely break away from the approach toward nuclear liability law taken by the Paris and Vienna Convention.

   The outcome of this political process, the new Nuclear Liability Law, stands in sharp contrast to the basic principles of international nuclear law. Liability is unlimited in amount. Legal channeling is, to a great extent, eliminated and there is no exclusive jurisdiction, as is provided for by international nuclear liability law. The new law makes sure that an Austrian court has jurisdiction, and that Austrian law is applicable, if nuclear damage occurs in Austria, regardless of where it was caused. Further contents of the new law are a substantial extension of the definition of nuclear damage and regulations in order to facilitate the proof of causality.

   Although the Austrian legislature has decided not to be a part of the international nuclear liability regimes for the moment, this is not necessarily meant to be forever. The Austrian Parliament has taken an intense interest in the further development of the international nuclear liability system. According to Section 30 of the new Nuclear Liability Act, the Federal Government is obliged to report regularly to the Parliament on the development of the international instruments on nuclear liability. (12) In a simultaneously adopted resolution, (13) the Parliament holds out the prospect of revising its decision if the international system of nuclear liability improves to such an extent that it is able to ensure adequate compensation for nuclear damages. For that purpose, the Federal Government is further requested to continue participating actively in international negotiations in order to support the development of this system.

2. MAJOR PROVISIONS OF THE NEW NUCLEAR LIABILITY ACT

   1. Scope of Liability

      The Nuclear Liability Act 1998 covers two different fields of liability: liability for damages caused by radiation from nuclear plants and nuclear material and liability for damages caused by radiation from radionuclides. The damage may be caused by ionising radiation alone or in combination with the other hazardous properties of the nuclear material or radionuclide. (14) The definition of nuclear material follows the definition given by the Federal Law Establishing a Security Control in the Field of Nuclear Energy, (15) which itself is based on Article 18 of the Convention on the Establishment of a Security Control in the Field of Nuclear Energy. (16) According to this definition the term nuclear material means "special fissionable material" (17) and "source material". (18) A nuclear plant is a plant containing nuclear material in such an arrangement that a self-sustaining chain process of nuclear fission can occur, such as nuclear reactors or facilities for the production, processing, utilisation, storage, reprocessing or disposal of nuclear material, including isotope isolation plants. Liable persons are the operator of a nuclear plant, the carrier of nuclear substances and the holder of radionuclides.

      The liability imposed on the operator of a nuclear plant and the carrier of nuclear material is unlimited, is irrespective of fault, and does not depend on the occurrence of a nuclear incident. The carrier is liable for damages caused during the carriage of nuclear material by land, air or sea unless he or she proves that he or she neither knew nor should have known that the goods transported were nuclear material. (19) The operator of a nuclear plant is the holder of the license and any other person who is entitled to control the operation of the nuclear plant and who actually derives or is at least in the factual or legal position to derive its operating profits. (20) This allows for the possibility of piercing the corporate veil in cases where intercorporate regulations abusively exempt the controlling company from liability by shifting the liability to an under-endowed operating company. The operator of a nuclear plant is liable for all damage caused by the operation of the plant including the dismantling of the plant and the disposal of radioactive inventory. (21) The operator's liability also covers damages caused outside his or her plant by radioactive material originating from the plant if the damage is caused before another operator has taken charge of this material, or, where the material was sent to the operator, if the damage is caused after the operator has got the legal right to dispose of the material. (22)

      The operator's liability under the Nuclear Liability Act does not cover damages to the nuclear plant itself and to any other nuclear plant, in operation or under construction, situated on the same site, or to any property on the site of the plant which is used or was used in connection with that plant. The carrier shall not be liable for damages to the means of transport used to forward the nuclear substances involved. (23) Apart from this exemption, no grounds of exoneration from liability are provided. Events like acts of armed conflict, hostilities, civil war or insurrection, as provided for in the Vienna (24) or the Paris Convention, (25) do not discharge the operator or carrier from liability. It is presumed that, even under such circumstances, it is up to the liable person to take adequate precautions. The operator of a nuclear plant situated on Austrian territory is required to maintain insurance covering his or her liability for nuclear damage of at least 5.6 billion ATS (approximately 400 million Euro) plus 560 million ATS (40 million Euro) for interest and costs. For research and pilot plants, the minimum amount is fixed at 560 million ATS plus 56 million ATS for interest and costs. (26) The carrier of nuclear material is obliged to maintain insurance coverage of at least 560 million ATS plus 56 million ATS for interest and costs. For the carriage of source material, the minimum amount is 56 million ATS plus 5.6 million ATS for interest and costs. (27) This insurance has to cover all damages that are caused during its term of validity. Damages due to war, acts of armed conflict, hostilities, civil war, riot or insurrection are excluded from the scope of the insurance policy. (28)

      The liability imposed on the holder of radionuclides is fault-based. (29) The holder is exonerated from liability upon proof that due care was exercised by him (her) and his (her) employees. The burden of proof lies with the holder. (30) If the radionuclide was used for medical treatment, the holder's burden of proof is only related to the technical circumstances of the utilisation of the radionuclide. The proof of medical malpractice, on the other hand, is...