Select Committee on Science and Technology Written Evidence


Memorandum 115

Submission from Gates and Partners

SUMMARY

  This paper provides a high-level overview of the existing international and UK provisions dealing with space liability, summarises recent US commercial spaceflight legislation applicable to space tourism and sets out a proposed framework for future legislation taking into account lessons learned from the impact of liability regimes upon the development of the airline industry.

I.  INTRODUCTION

  Mass space tourism is no longer science fiction but a number of technological, operational and legal hurdles need to be addressed to support this nascent industry.

  For present purposes we consider space travel in a craft through suborbital and orbital space rather than the concept of "space hotels" or colonies in orbit or on the Moon.

II.  OVERVIEW: APPLICATION OF INTERNATIONAL AIR AND SPACE LAW TO SPACE TOURISM

A.  Air or space law or both?

  Many of the space passenger transportation vehicles currently under development are two-part vehicles where the space-going portion is carried on and launched from an aircraft. Will such vehicles be subject to air law, space law or both (ie space law whilst in "outer space" and air law at other times)? This is a fundamental issue because the legal regimes for air and space law are very different.

  Unfortunately there is no straightforward answer. At present, UK and international space law does not define where "outer space" starts and finishes. The focus of air and space law has previously been different: air law has recognised the rights of sovereign States to control their airspace whereas outer space is to be used by all States for the benefit of the world.

  The issue has been debated by the United Nations Committee on the Peaceful Uses of Outer Space (UNCOPOUS) since 1967 without resolution and currently the Scientific and Technical Committee is considering the issue from a technical perspective. The debate has focused on two approaches: a direct or spatial approach seeking to define "space" by reference to a certain altitude (various altitudes between 90 and 110km above sea-level have been suggested) or an indirect or functional approach based on the purpose or functions of the vehicle. Similarly, the development of new space vehicles led UNCOPOUS to issue a questionnaire to States with questions concerning what it termed "aerospace objects". States' views were sought as to how such aerospace objects would be defined and which legal regime (air, space, both) applied. The different responses of States demonstrated that achieving consensus on this issue is likely to be challenging.

B.  The existing space liability regime: international

  The existing international space law treaties date from the late 1960's and 1970's. They do not satisfactorily deal with space tourism, since they were drafted in order to facilitate governmental space activities at a time when private space activities were non-existent.

  There are five treaties applicable to activities in space:

    —  the Outer Space Treaty 1967 (OST);[29]

    —  the Liability Convention;[30]

    —  the Rescue Agreement;[31]

    —  the Registration Convention;[32]

    —  the Moon Agreement.[33]

  A detailed consideration of these treaties is outside the scope of this paper and so we highlight some of the main provisions arguably applicable to space tourism.

(i)  Jurisdiction

  A Launching State is responsible under the Registration Convention for registering the space object[34] if launched into earth orbit or beyond. However, at present, space tourism flights are intended to be sub-orbital and so this Convention will not apply.

  The Launching State has jurisdiction and control over objects launched into outer space on its registry and over personnel while in outer space or on a celestial body.[35]

(ii)  Passenger Liability

  Arguably, the main problem with the existing treaties is that they do not provide an effective mechanism to limit liability to passengers. Limitation of such liability was a key factor in supporting the development of the aviation industry[36] and will be equally important to the developing space tourism industry.

  If a space passenger flight was launched into earth orbit, then, because the State of registry under the Registration Convention applies its jurisdiction to the spacecraft, any claims for damage by the passenger would be pursued within that State.

  The Liability Convention only covers liability for damage to the surface of the earth, to aircraft in flight or to the space objects (including personnel on board) of another State: it does not deal with the issue of liability to personnel on the space object itself. In any event, individuals have no direct right of action under the Liability Convention: claims must be brought by the affected State.

  The Launching State is itself responsible for damage caused by a space object to its own nationals or foreign nationals participating (by invitation) in the operation of that space object (from launch until descent) or in the immediate vicinity of a planned launching/recovery area if they are invited by the Launching State.

(iii)  Third Party Liability: Surface Damage

  Under the Liability Convention, a Launching State[37] faces strict liability for any damage caused on the surface of the earth or to aircraft in flight. A Launching State is liable, upon proof of fault, for damage to space objects of other States, or personnel on those objects.

  There is no provision limiting the liability of the launching State but usually States transfer the burden of liability to private companies or insurance through domestic legislation. In case of an accident the claim for compensation can only be presented to a launching State through diplomatic channels, giving thus a political tone to the settlement procedure and leaving private entities with little control.

(iv)  Search and Rescue

  The Rescue Agreement imposes two general obligations on States. First, to render any assistance to astronauts as required. Secondly, a State is required to inform the Launching State and the United Nations if it discovers that a space object has returned to earth and, if requested, to take steps to recover and return it to the Launching State. Strictly speaking the Rescue Agreement does not cover passengers. However, under an expansive interpretation of the term "personnel of a spacecraft" passengers might be affected by its provisions. If so, passengers in distress are entitled to all feasible assistance from any relevant State. Furthermore, they have the right to be safely and promptly returned to representatives of the launching authority.

C.  The existing space liability regime: United Kingdom

  The legal framework for regulating commercial space activities in the UK is governed by the Outer Space Act 1986 ("the 86 Act").

  Sections 1 and 2 provide that the 86 Act applies to UK nationals, firms and bodies incorporated under the laws of any part of the UK that launch or procure the launch of a space object, operate a space object or carry any other activity in outer space, regardless of whether these activities are carried out in the UK or elsewhere. By restricting the application of the 86 Act to UK nationals, the UK runs the danger that a foreign national who conducts space activities in the UK would not be subject to regulation and thus UK would not be adequately protected as a Launching State.

  Before issuing a licence, the British National Space Centre (BNSC) may require the licensee to insure itself against liability incurred in respect of damage or loss suffered by third parties in the United Kingdom or elsewhere, as a result of the activities authorized by the license. The UK does not impose a compulsory third party insurance requirement, although the government may impose this condition upon the grant of a licence.

  Section 10 of the 86 Act requires all persons carrying on space activities to indemnify the UK government against any claim for loss or damage, if such person is one to whom the Act applies. Currently, the BNSC requires the licensee to provide evidence of third party liability insurance of £100 million and for the UK government to be an additional insured to the insurance policy. Therefore, the UK government does not indemnify licensees who bear all financial responsibility for third-party claims, but limits the insurance requirement to £100 million to facilitate operators to buy insurance coverage on reasonable terms.

  The insurance policy should cover both the launch and the in-orbit phase (at least three years). If a licence is granted for the launch of a number of satellites, and a claim is made following one of the launches which exhaust the £100 million cover, the licensee is required to renew the cover for the remaining launches.

D.  The existing aviation legal regime: international

  If it was determined that aviation law applied to a space tourism flight for all or part of its journey, then the following regime would apply.

  International carriage by air of passengers, baggage and cargo is generally subject to a regime based upon the Warsaw Convention 1929, the Warsaw Convention as amended by the Hague Protocol 1955 or the Montreal Convention 1999, depending upon the routing of the flight. In the European Union, Regulation (EC) No 889/2002 of the European Parliament and of the Council of 13 May 2002 amending Council Regulation (EC) No 2027/97 on air carrier liability in the event of accidents is also applicable to Community Air Carriers. For passenger death or bodily injury resulting from an accident in the course of carriage by air, embarking or disembarking, the carrier is liable without proof of fault. Warsaw/Warsaw Hague Conventions limit liability in the absence of wilful misconduct by the carrier: the Montreal Convention provides for unlimited liability although the carrier is not liable above 100,000 Special Drawing Rights if they establish that they took all necessary measures to avoid the loss.

  Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights provides for compensation for passengers in the event of denied boarding or delay.

E.  The existing aviation legal regime: domestic

  Domestic carriage in the UK is governed by the Application of Provisions Order 2004 which applies a modified version of the Montreal Convention. EC Council Regulation No 889/2002 is also applicable to domestic carriage where the carrier is a Community Air Carrier.

  There are many legislative provisions implementing public and private international air law convention requirements such as the Chicago Convention referred to above and providing for air traffic rights, rules of the air and accident investigation.

  The "Liability Convention" opened for signature at London, Moscow, and Washington on 29 March 1972. To date only the US has developed specific legislation in respect of space tourism.

  The background to this is that on 11 February 1988, President Reagan issued the National Space Policy and he announced a 15-point Commercial Space Initiative (CSI) which, inter alia, established a comprehensive risk allocation regime between the government and private sector for use of government launch facilities for commercial purposes and recognised a commercial space sector distinct from the military and civilian government sectors.

  The Commercial Space Launch Amendments Act of 1988 ("CSLA") codified into law these policies and responded to the industry's concerns. The CSLA and the accompanying regulations provide a risk-allocation system amongst the various participants involved in launch services. The aim was to facilitate the development of the US commercial launch industry by allowing it to compete in the international marketplace and to provide launch participants with protection against the risk of catastrophic losses and unlimited liability. The CLSA forms the basis of the three-tiered comprehensive risk allocation regime currently in force and encompasses a complex system of insurance requirements, state indemnification, reciprocal waivers of liability, limitations of liability, contractual remedies and clauses excluding liability.

  The US legal framework requires licensees to obtain liability insurance or demonstrate financial responsibility based on Federal Aviation Administration (FAA) determination of the maximum probable loss (MPL). Currently, US law provides for a statutory limit in the amount of insurance or financial responsibility required of US$500 million for third party claims for injury, loss, or damage, and US$100 million for claims by the US government for damage or loss to Government property resulting from an activity carried out under the license. If the maximum liability insurance available on the world market at reasonable cost is less than US$500 million/$100 million, it is provided that the cap may be lowered to reflect the market's capacity.

  Launch participants are also required to enter into no-fault, no subrogation reciprocal or cross-waivers of claims under which each participant accepts its own risk of property damage or loss and agrees to be responsible for injury, damage, or loss suffered by its employees.

  To the extent that third-party liability claims exceed the MPL-based cap, the US government will pay for claims up to US$1.5 billion (approximately US$2 billion today), provided that the damage did not result from the wilful misconduct of the licensee. For damage to government property, the U.S. government waives claims for property damage above the required insurance.

  Government indemnification for third-party risks is capped at $1.5 billion. Above that amount the launch provider bears exclusive responsibility for covering claims.

(i)  The Commercial Space Launch Amendments Act 2004

  On 23 December 2004 the Commercial Space Launch Amendments Act 2004 (CSLAA) was enacted in the US to facilitate the "development of the emerging commercial human space flight industry" by expressly authorising the licensing of manual re-usable launch vehicles (RLV's), extending the liability indemnification regime for commercial human space flights and establishing a new system for experimental re-usable suborbital rockets.

  The CSLAA purports to establish a distinct commercial human space flight by creating a "clear legal, regulatory and safety regime". The Act requires regulatory standards governing human space flights to evolve as the industry matures and vests the authority to the FAA /Associate Administrator for Commercial Space Transportation (AST) to regulate the industry under 49 U.S.C. Subtitle IX, Chapter 701. This authorisation includes the promulgation of regulations for the safety and health of crew and space flight participants; and for the launch vehicle design or operation that will take into consideration the evolving standards of safety in the commercial space flight industry.

  The main points of the Act are the following:

(a)  Flight participants

  A space flight participant is defined as an individual, who is not crew, carried within a launch vehicle or re-entry vehicle. The CSLAA requires that the holder of a licence or a permit informs the space flight participant in writing about the risks of the launch and re-entry including the safety record of the RLV. The licence holder must also inform the space flight participant in writing prior to receiving any remuneration from that participant, that they US government has not certified the vehicle as safe for carrying crew or space flight participants. In turn, the space flight participant must provide a written informed consent to participate to the launch and re-entry and also a written certification of compliance with physical examinations prescribed by the FAA.

  On 15 December 2006, the FAA issued final regulations (the Regulations) relating to space flight participants. In a nutshell, the regulations include the following:

    —  Informed consent: RLV operators should inform in writing the flight participants (they must be at least 18 years old) about the known and unknown hazards and the risk of the flight in an understandable manner, ie the likelihood and the consequences of any reasonable foreseen hazardous event and safety-critical system failures that could result to their death, injury, disability and total or partial loss of physical and mental function. RLV operators should describe to each flight participant the safety records of their vehicle and of all launch and re-entry vehicles that have carried persons on board, providing also an opportunity for the participants to ask questions.

    —  Training: RLV operators should provide safety training to the participants and should impose security requirements, similar to those applied to airline passengers. Operators are required to train passengers on how to respond during emergencies such as fire, smoke or loss of cabin pressure. Physical examination of passengers is not mandatory, but the FAA recommends it.

(b)  Crew

  The CSLAA requires that the crew receives training and satisfy medical or other standards specified in the licence or permit. Pilots are required to hold a pilot's certificate with an instrument rating and to possess the aeronautical experience and skills necessary to pilot and control the vehicle.

  Crew members with a safety-critical role are required to obtain second-class airman medical certificates issued within a year of the flight and maintain a physical condition and mental state sufficient to perform safety-related roles. Furthermore, the Regulations provide for the operators to train crew members on how to perform their roles to ensure the vehicle will not harm the public. No further guidance is being provided in the Regulations, but the FAA committed itself to carry out further research. The RLV operator must also inform crew members in writing prior to them agreeing to fly or prior to being employed, that the US government has not certified the vehicle as safe for carrying crew or space flight participants.

(c)  Experimental permits

  To encourage the development of reusable suborbital rockets, the CSLAA provides for the issue of experimental permits allowing for an unlimited number of launches. However, this permit is not transferable and does not authorise a rocket to be operated for carrying any property or human being for hire or reward.

  Furthermore, the Act limits the FAA/AST's authority to issue permits for reusable suborbital rockets to those rockets that will be launched or re-entered solely for: (1) research and development to test new design concepts, new equipment, or new operating techniques; (2) showing compliance with requirements as part of the process of obtaining a licence; or (3) crew training.

(d)  Liability insurance and indemnification

  The CSLAA excludes crew and space flight participants from the definition of third party and requires crew and space flight participants to execute reciprocal waivers of claims involving the DOT/FAA. Under this regime each party waives and releases claims against the other and agrees to assume financial responsibility for property damage it sustains and in respect of bodily injury or property damage sustained by its own employees or by space flight participants resulting from licensed activity regardless of fault.

  Furthermore, the liability indemnification regime of the CSLAA is inapplicable to space flight participants. This means that the US government will not entertain a successful third party claim against a space flight participant involved in a licensed flight.

  The Regulations purport to clarify that the complex system of cross-waivers applies to the death of a flight space participant and also that it covers the estate, successors and assigns of a crew or passenger. Furthermore, the Regulations do not require a waiver of claims against the operator, yet operators may make it part of their contractual arrangements. The FAA explicitly rejected a request to require the operator to provide personal insurance for passenger noting that, historically, space flight participants are expected to purchase first party insurance.

III.  CONCLUSION

  Neither the international nor UK domestic existing legislation provides an adequate framework for dealing with space tourism and, even in the US, where legislation has been enacted in response to the developing industry many issues are not yet fully developed or resolved. The technology and the business opportunities are developing faster than the legal regimes. Space tourism flights should be subject to one legal regime specifically tailored to space tourism. Any solution involving the application of air law to one part of the flight and space law to another would be practically unworkable. The aviation industry is a mature and fully-established industry, highly regulated and involving minimal risk to passengers. The space passenger industry is young, developing and, as with the early days of aviation, will involve greater risks to passengers.

  The space sector is important to the UK economy, as the UK has a key role to play in developing these innovative technologies. It is therefore desirable that the UK is at the forefront of developing domestic legislation to support this technology, yet mindful of international obligations.

  Key goals for such domestic legislation would be:

    —  To ensure that the fledgling industry is not stifled by the threat of litigation and unlimited, uninsurable liability.

    —  To be clear so that business is attracted by legal certainty to the UK.

    —  To develop a forward-thinking strategy providing a practical regulatory framework for space tourism—for example traffic management, environmental, safety and accident investigation both domestically and internationally.

  Any legislation would need to ensure that there are fully enforceable and absolute waivers of liability in respect of passengers. Domestically, exemptions would need to be made to the Unfair Contract Terms Act 1977 which prevents exclusion of liability for death/personal injury.

  The existing space law treaties were drafted at a time when space exploration and activities were the province of States rather than commercial organisations and the time is now ripe to draft a new international treaty prepared specifically to support and develop space tourism, drawing parallels with the development of the legal regime surrounding the aviation industry.

  Providing clear and enforceable limited liability is just the starting point of such a treaty. There are many other issues which need to be considered and legislated for. The commercial aviation industry is one of the most heavily-regulated industries in the world. In addition to a mature liability regime and developed product certification requirements, ancillary activities are also regulated. For example, the Chicago Convention on International Civil Aviation 1944[38] and its Annexes provide a fundamental basis for the promotion of flight safety worldwide. Among the eighteen Annexes adopted by the Council of the International Civil Aviation Organization (ICAO), fifteen refer to technical issues of air navigation by prescribing specifications for "physical characteristics, configuration, material, performance, personnel, or procedure".[39] As the space tourism industry develops, these issues will need to be considered as well and there will be a need for the space equivalent of ICAO—International Commercial Space Organisation.

April 2007






29   The Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies 1967. Back

30   The Convention on International Liability for Damage Caused by Space Objects 1972. Back

31   Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space 1968. Back

32   The Convention on Registration of Objects Launched into Outer Space 1976. Back

33   Agreement Governing the Activities of States on the Moon and Other Celestial Bodies 1979. Back

34   Registration Convention Article II. Back

35   Supra Article VIII. Back

36   Convention for the Unification of Certain Rules Relating to International Carriage by Air, Signed at Warsaw on 12 October 1929 (Warsaw Convention 1929). Back

37   ie a State that launches, procures the launch of, or from whose territory a space object is launched. Back

38   Convention on International Civil Aviation, signed at Chicago on 7 December 1944. Back

39   Annex 11, at vi. Back


 
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