UNIDROIT CONSULTATION Reflections 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 2 t

Contract GNSS duties towards users Tort Legal Framework for Provision of Satellite Navigations Services CONTRACT- BASED SATELLITE SERVICES FREE SERVICES SoL= user charge CS = (fee) Guarantee Operable via EGNOS by 2010 ___________________ PRS: = encrypted services to MS _________________ SAR = COSPAS SARSAT/ no liability OS EGNOS Public providers Public users Commercial users Private users/ beneficiaries ___________________ GPS US, military, no liability as provider abroad (Art 28 Chicago), waiver to sovereign 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’ 4 t

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 5 t

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 6 t

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 7 t

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 8 t

Providers and Users of Navigation Signals ICAO, IMSO, ICG etc. Standardisation SARPS+ Certification Authorities ICAO, IMSO, ICG etc. Standardisation SARPS+ Certification Authorities innocent beneficiaries/ innocent bystanders 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 COMMUNITIES Air Maritime Road + Rail Transport NAVIGATION COMMUNITIES Air Maritime Road + Rail Transport 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? 10 t

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? 11

Liability matrix of satellite manufacturers or service providers contracts Primes/ manufacturers Subs or equipment manufacturer Service provider Public bodies/ services Commercial Public/private Other users contracted Tort law Product liability O.S. no contract innocent beneficiaries bystanders O.S. no contract innocent beneficiaries bystanders 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 13

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 14

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 15

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 16

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 17