UNIDROIT CONSULTATION Reflections on the Legal Framework for TPL for GNSS Rome, 22 October 2010

1. UNIDROIT CONSULTATIONReflections on the Legal Framework for TPL for GNSSRome, 22 October 2010 Prof. Dr. Lesley Jane Smith, LL.M. Leuphana Universität Lüneburg Weber-Steinhaus & Smith, Bremen

2. 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 Prof. Dr. Lesley Jane Smith, LL.M. t

3. Legal Framework for Provision of Satellite Navigations Services CONTRACT- BASED SATELLITESERVICES FREE SERVICES OSEGNOS Public providers Public users Commercial users Private users/ beneficiaries ___________________ GPSUS, military, no liability as provider abroad (Art 28 Chicago), waiver tosovereign immunity for US citizens, Interoperable/ GNSS • SoL= user charge • CS = (fee) • Guarantee • Operable via EGNOS by 2010 • ___________________ • PRS: = encrypted • services to MS _________________ • SAR = COSPAS SARSAT/ no liability Contract GNSS duties towards users Tort In terms of service providers spec/ contract

4. 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’ Prof. Dr. Lesley Jane Smith, LL.M. t 4

5. 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 Prof. Dr. Lesley Jane Smith, LL.M. t 5

6. 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 Prof. Dr. Lesley Jane Smith, LL.M. t 6

7. 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 Prof. Dr. Lesley Jane Smith, LL.M. t 7

8. 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 Prof. Dr. Lesley Jane Smith, LL.M. t 8

9. Providers and Users of Navigation Signals ICAO, IMSO, ICG etc.Standardisation SARPS+ Certification Authorities Satellite Owner/ Operator NAVIGATION COMMUNITIES Air Maritime Road + Rail Transport Manufacturers / providers of receivers/ navigation equipment Ground station operator(s) - thereafter added value providers innocent beneficiaries/ innocent bystanders Satellite image courtesy of ESA

10. 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? Prof. Dr. Lesley Jane Smith, LL.M. t 10

11. 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

12. Liability matrix of satellite manufacturers or service providers Public bodies/ services Primes/ manufacturers contracts Commercial Public/private Subs or equipment manufacturer Tort law Product liability Other users contracted Service provider O.S. no contract innocent beneficiariesbystanders • Services as defined per contract or public statement • Otherwise • Tort / product liability law • Software defect • SIGNAL DEFECT • Product?

13. 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

14. 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

15. 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

16. 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

17. 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