1. 09/12/2009 SWIM-SUIT User Forum, Rome SWIM-SUIT A Proposal for a Framework Regulation Anna Masutti AS&T Law Firm

2. 09/12/2009 SWIM-SUIT User Forum, Rome 2 The main features and objectives of SWIM main features  ATM information migration from one-to-one messages to many-to-many information distribution models.  A worldwide web for the distribution of ATM data. objectives  Improve information management and consequently airspace flow and capacity.  Decouple the information producer from the information consumer to allow every participant to be a producer or a consumer of information.

3. 09/12/2009 SWIM-SUIT User Forum, Rome 3 Example of SWIM Hazard occurrence (1) Why do we need a regulation?  If the Trajectory is based on erroneous airspace data, an aircraft flying in the en-route/approach phase could be led into trajectories crossing forbidden or dangerous airspace areas.  Once detected, the need to reroute the affected flights increases the workload for ATCO and flight crews.  If not detected, an accident could occur.

4. 09/12/2009 SWIM-SUIT User Forum, Rome 4 Legal aspects & principles for a SWIM regulatory framework  Objective and scope of future SWIM Regulations  Parties involved and their Roles  Main Principles of SWIM Governance  Liability  Compulsory Insurance  Certification (and/or Authentication) process  Sanctions (a system of administrative sanctions)  Implementation and codes of conduct  Dispute settlement and Jurisdiction  Users Committee

5. SWIM-SUIT User Forum, Rome 5 Parties involved and their roles  The Publisher/Manager is for maintaining the consistency of a particular partition.  The Publisher/Manager is responsible for maintaining the consistency of a particular partition. It receives update requests regarding the Flight Object the and does the necessary processing to ensure that a coherent and consistent partition is maintained and to the. It receives update requests regarding the Flight Object from the contributors and does the necessary processing to ensure that a coherent and consistent partition is maintained and made available to the publisher.  The Contributor the value for a partition subset and makes it available to the Manager for consolidation into the Flight Object.  The Contributor sets the value for a partition subset and makes it available to the Manager for consolidation into the Flight Object.  The User to a partition and receives updates from the publisher.  The User subscribes to a partition and receives updates from the publisher. All parties involved can be natural persons or legal entities 09/12/2009

6. SWIM-SUIT User Forum, Rome 6 Governance (1) To prepare recommendations for a legal framework allowing full functionality of SWIM in the European ATM System foreseen by the SES Regulations, we shall analyse the following topics: To prepare recommendations for a legal framework allowing full functionality of SWIM in the European ATM System foreseen by the SES Regulations, we shall analyse the following topics: 1. The nature of SWIM Services 2. The nature of the relationships among the different SWIM participants 09/12/2009

7. SWIM-SUIT User Forum, Rome 7 Governance (2) The importance of establishing the nature of SWIM services is related to the possibility of a State invoking “” i.e. the protection which a State is given from being sued in the courts of other States (no liability). The importance of establishing the nature of SWIM services is related to the possibility of a State invoking “State immunity” i.e. the protection which a State is given from being sued in the courts of other States (no liability). It is important to note that Immunity applies not only to the respective State or but also to its respective Agencies “performing acts in the exercise of sovereign authority”. Some SWIM services will be provided by State bodies such as ANSPs and/or Military Agencies/Organisations, while others will be provided by private entities. 09/12/2009

8. SWIM-SUIT User Forum, Rome 8 Governance (3) air traffic services The provision of air traffic services, as envisaged by Regulation 550/2004, is connected with the exercise of the powers of a public authority, which are not of an economic nature. SWIM is a programme for implementing ATM services, and in theory should not have an economic nature. *** However, SWIM services should be provided by ANSP for a fee, thus becoming a “commercial transaction”. 09/12/2009

9. SWIM-SUIT User Forum, Rome Governance (4) Definition of Commercial Transaction nature of the entities involved. A Commercial transaction means the exchange of materials, products, and services for a payment regardless the nature of the entities involved. 09/12/2009

10. SWIM-SUIT User Forum, Rome 10 Governance (5) (State Immunity) commercial transaction”.  To invoke ‘state immunity’, it is of fundamental importance whether the State acts as a State (acta jure imperii, in the exercise of its sovereignty) or as a private person (acta jure gestionis) involved in a “commercial transaction”.  In the first case it is possible to invoke State immunity, while in the second it is not.  If immunity is granted, it will be extended to State Agencies or companies such as ANSP. 09/12/2009

11. SWIM-SUIT User Forum, Rome Governance (6) T The nature of a state activity depends on the nature of the transaction. For example, SWIM services could be used for a typical State service such as SAR (Search and Rescue) activities. In this case it is rather certain that the State would enjoy immunity in the courts of other countries when wrong information causes damage. 09/12/2009

12. SWIM-SUIT User Forum, Rome Governance (7) Nature of SWIM services If SWIM services are provided in exchange for a payment of money, they have the nature of “commercial transactions” even if they are supplied by a State (or its Agencies), which in this case acts as a private person. In this scenario, it is evident that Governance can not foresee a situation of State immunity and therefore must contemplate a system of liability well designed in accordance with the peculiarities of SWIM and duly harmonized among all Member States. 09/12/2009

13. SWIM-SUIT User Forum, Rome 13 Governance (8) among the different SWIM participants 2. The nature of the relationships among the different SWIM participants The nature of the relationship could be on:  A contractual basis, considering that a SWIM participant could be a publisher or a user. In the first case they should receive payment for the information given; in the second case, they should pay money for the information received. The nature of SWIM activity needs to be classified as a “commercial transaction”. or  A non-contractual basis in case no contract exists. 09/12/2009

14. SWIM-SUIT User Forum, Rome 14 Governance (9) could be on a contractual basis between one SWIM actor and:. The nature of the relationship could be on a contractual basis between one SWIM actor and: - the other actors of the System (publisher, contributor, user), or or - the European Union (Commission), if it is decided that the System will be owned by the EU or or - a private company [or a consortium] acting as concessionaire under a public service contract with the EU (Commission). 09/12/2009

15. SWIM-SUIT User Forum, Rome 15 Liability It is important to ensure a proper level of compensation for victims involved in air accidents caused by incorrect information disseminated via SWIM. It is important to ensure a proper level of compensation for victims involved in air accidents caused by incorrect information disseminated via SWIM. These protection norms should contemplate a system for: These protection norms should contemplate a uniform liability system for: loss of, damage to, and/or destruction of persons or property loss of, damage to, and/or destruction of persons or property ensuring simple and clear rules for victims to easily identify the liable party avoiding legal action in the jurisdiction of the national law in force, without any form of legal protection for the different participants of the System. 09/12/2009

16. SWIM-SUIT User Forum, Rome 16 Liability: proposal A (1) arising from a The first proposal concerns contractual liability arising from a breach of a contract. The main features of contractual liability are:  obligation assumed by any contracting party under the terms of a contract;  several contractual obligations could be established by law on the basis of the following principles: i) liability and presumption of fault* of the contractual party; (ii) burden of proof of the contractual party on the basis of some exceptions; (iii) compulsory minimum insurance coverage per accident. * Some legal systems require fault, others provide for strict liability with certain exceptions. With respect to contracts for services the fault principle may prevail. 09/12/2009

17. SWIM-SUIT User Forum, Rome 17 Liability: proposal A (2) Regarding contractual relationships, the guidelines will suggest the main principles of future regulations governing the duties and liabilities of each party involved in the contracts. These principles will refer in particular to the:  identificationof the liable party;  identification of the liable party;  liability regime/system;  compensation system for the victims of an accident;  (compulsory) insurance coverage. 09/12/2009

18. SWIM-SUIT User Forum, Rome 18 Liability: proposal A (3) Claims when there is a contract Claims when there is a contract A damages claim when there is a contract generally requires:  An injury to third parties;  A breach of contract, and  A causal nexus between injury and breach of contract. 09/12/2009

19. SWIM-SUIT User Forum, Rome 19 Liability: proposal B Considering that in some cases a catastrophic event (causing substantial damages) could occur because of misuse of SWIM, a fair system for victims should be provided by legislation. Therefore, this proposal could be based on the following principles:  [The channelling of liability to a single liable party].  Strict liability of the liable party.  Limited liability of the liable party (first tier).  Compulsory insurance of the liable party, up to the limit of the first tier, and the right to make a direct claim against the insurer.  Supplementary compensation if the damages exceed the first tier (entering the second tier) (which could come from a European Fund).  Limitation on the amount of compensation of the second tier. 09/12/2009

20. SWIM-SUIT User Forum, Rome 20 The principle of Channelling Liability The channelling of liability is the most common solution adopted at the international level to protect victims, who as a result can easily identify the liable party and take legal action without risk that their claims can be rejected. With the channelling of liability, only one party will be identified as liable for the damage caused. Is the channelling of liability suitable for SWIM, considering that there are many parties involved in the dissemination and use of information? 09/12/2009

21. SWIM-SUIT User Forum, Rome 21 The Strict Liability Regime: Advantages for victims Greater protection for victims:  the victims do not need to prove the liable party’s negligence or fault in order to make it liable. Mitigation of the strict liability regime Mitigation of the strict liability regime:  there is no liability in case of force majeure or  when the liable party proves that the damage was caused by an act or omission of a claimant/victim. 09/12/2009

22. SWIM-SUIT User Forum, Rome 22 Limited Liability of the Liable Party (first tier) Protection of the liable party:  The amount of the liable party’s liability cannot exceed [X] amount [A flexible system for liability could be: (i) Up to the above [X] amount, the liable party shall not be able to deny or exclude its liability; if (ii) but beyond the above [X] amount, the liable party can exclude its liability if it proves one of the exemptions provided by law]. 09/12/2009

23. SWIM-SUIT User Forum, Rome 23 Compulsory Insurance The aim of compulsory insurance is twofold:  to assure victims of the financial strength of the liable party.  to avoid the risk of financial difficulties or bankruptcy of the liable party. The liable party shall be required to maintain insurance or other financial security covering its liability for damage up to the maximum of the first tier. Proof of insurance or financial security shall be required. Compulsory insurance system could be established also in a contractual regime (proposal A) 09/12/2009

24. SWIM-SUIT User Forum, Rome 24 Direct claims against the Insurer Direct claims against the insurer is a common solution adopted at the international level to: (i)protect victims, who thereby have a stronger guarantee of compensation, and (ii)rationalise/reduce the cost of claims. Direct Claim could be established also in a contractual regime (proposal A) 09/12/2009

25. SWIM-SUIT User Forum, Rome Supplementary Compensation (second tier)  It would be desirable to establish a two-tier liability system that comprises of a first tier funded by compulsory contributions and a second tier that could be made available when necessary.  The second tier of compensation increases the amount of compensation available to the victims.  The total contribution of supplementary compensation should not exceed, for example, double the amount of compensation paid by the liable party. 09/12/2009

26. SWIM-SUIT User Forum, Rome 26 Circumstances in which Supplementary Compensation is Envisaged Supplementary compensation is envisaged in three cases:  when the damage exceeds the liable party’s limit of liability,  when the presumed liable party is found not liable because the damage was a consequence of force majeure,  when the liable party, liable for the damage under a regulation, is financially incapable of meeting its obligations in full, and any financial security available does not cover the claims or is insufficient. 09/12/2009

27. SWIM-SUIT User Forum, Rome 27 Provisions for the Right of Recourse  The liable party shall have the right of recourse against any person who has caused the damage*.  The Supplementary Compensation Mechanism allows the right of recourse against any person who has caused damage*.  * For example any person/entity who has committed, organized, and/or financed an act of (unlawful) interference which has caused a malfunctioning of the system. 09/12/2009

28. SWIM-SUIT User Forum, Rome 28 Contribution to Supplementary Compensation - A Possible Solution Contribution to the Supplementary Compensation Fund could be established as follows:  A percentage of the mandatory amounts collected in respect of each service offered to the users, or  Member States could contribute to the second tier in proportion to their contributions to the SESAR Programme. 09/12/2009

29. SWIM-SUIT User Forum, Rome 29 Damage occurring in non-EU Member States On a case by case basis, supplementary compensation could provide financial support to an EU MS liable party, when it offers its services outside the territory of Member States and damage occurs outside Member State territory Such compensation may be provided if:  the damage is caused by incorrect SWIM information;  the non–EU Member State where the damage occurs is not responsible for such incorrect information;  the non-EU Member State agrees to contribute to the supplementary compensation fund and its terms and conditions;  such financial support shall not exceed the amount established for the second tier. 09/12/2009

30. Questions and Feedback anna.masutti@astlegal.com