One of the fundamental principles of nuclear law is the principle of compensation. The use of nuclear energy involves risks that cannot be completely prevented even if safety requirements are met. In addition, radiation incidents are known to have a cross-border impact, which means that specific personal injury or property damage resulting from a nuclear incident may occur in a foreign country (i.e. in the country other than the country where the nuclear facility is located). Nuclear law must provide for adequate compensation for persons injured as a result of an accident, both nationally and internationally.

Nuclear liability in international law

Liability for damage caused by a nuclear incident is regulated by the 1963 Vienna Convention on Civil Liability for Nuclear Damage (CLND, in effect from 1977) and the 1960 Paris Convention on Third Party Liability in Field of Nuclear Energy  (which entered into force in 1968 and has 16 members, mainly OECD member states). Both the Vienna Convention and the Paris Convention have been amended since their adoption. In order to ‘combine’ the two conventions into a single comprehensive legal framework (from the perspective of protecting the interests of injured parties), the member states of both conventions concluded a Joint Protocol Relating to  the Application of the Vienna Convention and the Paris Convention (the so-called “Joint Protocol”) in 1988, which entered into force in 1992.

Estonia has acceded to the CLND and the Joint  Protocol, but not to subsequent amendments to the CLND (the 1997 Protocol amending the CLND, the 1963 Optional Additional Protocol on the settlement of disputes, the 1997 Convention on Supplementary Compensation for Nuclear Damage (abbreviated as ”CSC”)), or the Paris Convention or its subsequent amendments.

General principles of liability

The regulation of compensation for nuclear damage is based on four internationally agreed fundamental principles:

1.     Absolute liability – similar to the provisions of the Law of Obligations Act on the civil liability for damage caused by a major source of danger, the liability of the operator of a nuclear facility is not dependent on culpability. It is sufficient to prove a causal link between the nuclear incident and the damage related to the nuclear facility (including, if caused by nuclear material en route to or from the nuclear facility). The operator’s liability is absolute – while circumstances beyond the control of the liable person (force majeure, actions of third parties, unforeseeability of damage) would normally exempt them from the obligation to compensate for damage, these defences do not exempt them from liability in the case of nuclear damage. The only exception provided for in the CLND is where nuclear damage occurs as a direct result of armed conflict, hostilities, civil war or armed insurrection (in which case the operator is exempt from liability).

2.     Exclusive liability of the operator – Exclusive liability of the operator has two aspects. Firstly, no person other than the operator of a nuclear installation is liable for compensation for nuclear damage. However, as an exception, the CLND does not exclude liability for nuclear damage that may arise for other persons under international agreements in the field of transport. Secondly, the operator is not liable for nuclear damage on any basis other than that provided for in the CLND. However, CLND member states are allowed to stipulate nationally that the transporter of nuclear material or the handler of radioactive waste is also recognised as the responsible operator, provided that they themselves express a wish to do so and the original operator of the nuclear facility agrees thereto.

3.     Limited liability – the operator’s liability for nuclear damage is limited in terms of time and amount. The time limit is expressed as the limitation period for claims for compensation for nuclear damage, which, given the long period between the occurrence of a nuclear incident and the manifestation of damage caused by radiation, is three years from the date on which the person became aware or should have become aware of the damage and the operator responsible. In the case of damage to health, a claim may be brought no later than 30 years and in the case of damage to property, no later than ten years after the nuclear incident. Both limitation periods are set as minimums – CLND Member States have the right to set longer limitation periods in cases where the financial security or liability insurance required from the operator is valid for a longer period.

In addition, the grounds for interruption and suspension of the limitation period are left to the national law of the CLND member states. In monetary terms, the operator’s liability is initially limited to USD 5 million. Following the entry into force of the 1997 Protocol of Amendment, the limit was increased to 300 million SDRs (special drawing rights, the International Monetary Fund’s unit of account, currently 1 SDR = 0.37379 EUR) or 150 million SDR, provided that the state, where the facility is located, compensates for any damages exceeding this amount, so that the total compensation is at least 300 million SDR. As a general rule, the operator must also have financial security for the compensation obligation to the same extent. However, a CLND Member States may impose higher limits on the operator’s liability or even unlimited liability. In addition, the CLND Member States may impose lower financial security requirements for nuclear installations with a lower risk level, but these may not be less than 5 million SDRs.

4.     Exclusive jurisdiction (territorial rule and facility rule) – according to the territorial rule, which takes precedence, claims for compensation for nuclear damage are subject to the jurisdiction of the contracting state in whose territory or exclusive economic zone (EEZ) the nuclear incident occurred. If the extent of the EEZ is not specified, the maximum extent of the EEZ as notified to the IAEA shall apply. Secondly, the facility rule applies – if it is not possible to determine where the nuclear incident occurred or if it occurred outside the territory or EEZ of the Member States, the claim for compensation shall be subject to the jurisdiction of the courts of the country where the facility of the operator responsible for the damage is located.

Where, under the territorial or facility rules, the courts of several Member States have jurisdiction, special rules shall apply: if the nuclear incident occurs partly outside the territories of the Member States but partly within the territory of one Member State, the claim shall be subject to the jurisdiction of the courts of the latter. Otherwise, the Member States whose courts have jurisdiction under the territorial or facility rules shall agree on the jurisdiction of the courts of one Member State. Each Member State shall designate the court to which claims for compensation for nuclear damage are to be submitted.

The final decision of the competent court on compensation for damages shall be recognised and enforced by the CLND Member States, unless it is based on fraud, the defendant was unable to present his or her objections or whene the decision is contrary to fundamental principles of law or public policy in the Member State where enforcement is sought. .

See also previous nuclear blogs:

• Nuclear Blog I: Who pays for the demolition of an old nuclear power plant?
• Nuclear Blog II: How is the Peaceful Use of Nuclear Energy Ensured?
• Nuclear Blog III: Selecting a location for a nuclear power plant