Who is liable, and how, if debris damages a satellite? (credit: ESA)

Liability for space debris collisions and the Kessler Syndrome (part 2)

by Scott Kerr
Monday, December 18, 2017

[Part 1 was published last week.]

Other issues of liability

Identification of the Liable Party

The Space Liability Convention places liability on the “launching State,” defined as:

1. A state that launches or procures the launching of a space object;
2. A state from whose territory or facility a space object is launched.¹

Therefore, under the Space Liability Convention the determinative factors are where the space object launched from and who is launching the space object.² In the past, the “who” and “where” would result in the same answer; for example, Russia would launch Russian space objects, and the United States would launch American space objects. However, with the growing commercialization of space and increasing number of spacefaring atates, it can no longer be assumed that the answer to “who” and “where” are the same. In such an event, the Space Liability Convention dictates that both states are “jointly and severally liable for any damage caused.”³ The launching state(s) face unlimited liability—there is no limitation of liability provided for anywhere in the Space Liability Convention. However, many spacefaring States have enacted domestic legislation that dictates the liability of private corporations whom launch space objects, modifying the launching state’s liability.

National state legislation

Many states have adopted national space legislation, including Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, France, Germany, Japan, Kazakhstan, the Netherlands, Norway, the Republic of Korea, Russia, South Africa, Spain, Sweden, Ukraine, the United Kingdom, and the United States.⁴ Several are detailed below, in order to demonstrate the common approach to absolute versus fault-based liability and state liability versus corporate liability.

In the Netherlands, space liability is governed by the Dutch Rules Concerning Space Activities.⁵ Under s. 3(4), a spacefaring Dutch company must have and maintain insurance for the maximum possible amount of liability (in the determination of the Minister of Economic Affairs); however, the Minister must expressly consider “what can reasonably be covered by insurance.” If the state is liable for damages under the Space Liability Convention, then the company is liable only up to the amount insured.⁶ Presumably, the state is liable for any remaining damage. Further, a Dutch company operating in space must take steps that can reasonably be expected in order to prevent damage or, where damage cannot be prevented, to limit and rectify it as far as possible.⁷

In Australia, space liability is governed by the Australian Space Activities Act.⁸ Australia is unique in that it differentiates between damage occurring on Earth or in the air and in space, just as the Space Liability Convention does:

67 Damage on Earth or in the air.

1. The responsible party for the launch or return of a space object is liable to pay compensation for any damage the space object causes to a third party:
1. on Earth; or
2. as a result of damage to aircraft in flight.
2. However, the responsible party is not liable to the extent that the responsible party establishes that the damage resulted from:
1. the gross negligence of the third party; or
2. any conduct (whether by act or omission) that the third party engaged in with intent to cause the damage.

68 Damage to other space objects.
The responsible party for the launch or return of a space object is liable to pay compensation for any damage the space object causes, otherwise than on Earth or as a result of damage to aircraft in flight:

1. to a space object launched or operated by a third party; or
2. to a third party, or the property of a third party, on board such a space object;
3. to the extent that the damage is due to the fault of the responsible party or of a related party.

Australia has chosen to impose strict liability for damage on Earth or in the air (liability can be removed by proof the damaged party acted with gross negligence or an intent to cause the specific damage), in comparison to the absolute liability imposed on the launching state by the Space Liability Convention. Arguably, non-compliance with United Nations General Assembly Resolutions, such as the Space Debris Resolution, could constitute gross negligence. This suggests there are circumstances where an Australia space object can cause damage, and the Australian company will not be liable due to a third party’s non-compliance with the Space Debris Resolution, while the State of Australia itself will remain liable under international law. This is only in relation to damage occurring on Earth or in the air, as Australia imposes fault-based liability for damage in space, mirroring the Space Liability Convention. Further, Australian space companies must purchase insurance of at least $750,000,000 (AUD),⁹ and are only liable to the country for the amount of such insurance.¹⁰ However, the insurance must also insure the country against liability under the Space Liability Convention or otherwise under international law.¹¹

In Sweden, the Swedish Act on Space Activities forces all Swedish space companies to indemnify the State against all damages it may be liable for under international law.¹²

In Russia, the Law of the Russian Federation About Space Activity imposes absolute liability for damage that occurs on Earth or in the air, and fault-based liability for damage that occurs in space.¹³ This mirrors the Space Liability Convention. Interestingly, Russia also indemnifies Russian space companies for direct damage inflicted as a result of accidents while carrying out space activities,¹⁴ presumably as a method of supporting the state’s commercial space industry. This also suggests Russia will be aggressive in pursuing damages under the Space Liability Convention, in order to recoup the compensation it may pay to a Russian space company.

The Kessler Syndrome

To conclude, we return to the problem that began this discussion: the Kessler Syndrome. Once again, the Kessler Syndrome is where one space object (such as a satellite or piece of space debris) collides with another space object, which causes the object to fragment into several uncontrolled pieces (referred to as space debris), which may collide with additional space objects, repeating the process and creating more uncontrolled space objects ad infinitum.

The following is a realistic example of the Kessler Syndrome, based in part on the 2009 collision between a defunct satellite and an operational satellite, and in part on the 1978 crash of a public satellite into Earth. Note that all satellites in this example are privately-owned: State A launches a satellite and successfully places it in orbit around Earth. State A continually analyzes available orbital data, and discovers there is a 1 in 10,000 chance of a collision with State B’s defunct satellite. State A determines this level of risk is not sufficient to require avoidance procedures. State B does not analyze available orbital data for its defunct satellite and is unaware of any potential collision. The two satellites collide, rendering both defunct and creating 2,000 pieces of space debris (the “first collision”). One large piece of space debris, identified as a fragment of State B’s satellite, subsequently collides State C’s satellite in orbit creating an additional 1,000 pieces of space debris (the “second collision”). State C’s satellite, suffering a systems failure because of the collision, enters an uncontrolled graveyard orbit and subsequently de-orbits and crashes into a small town in the northern territory of State D, causing significant property damage (the “third collision”). Finally, State D’s orbiting satellite collides with a small, previously unknown piece of space debris, rendering it defunct (the “fourth collision”).

Who is liable for which damage under the absolute and fault-based liability imposed by the Space Liability Convention and national domestic legislation?

The first issue is who is liable for the first collision: State A or State B? This is an issue of causation. State A continually analyzes available orbital data, in accordance with Guideline 3 of the Space Debris Resolution. It correctly identified the probability of the collision, considered avoidance procedures, and chose not to act (an intentional omission). State B was not aware of the probability of the collision, and failed to adhere to Guideline 3 by limiting a collision through de-orbiting its defunct satellite. Conclusion: State A is liable under Article III of the Space Liability Convention, as its intentional omission (not conducting avoidance procedures) caused the collision, constituting fault. This conclusion seems somewhat strange, given that State A was acting in accordance with international best practices, while State B was not. Further, there is no apportionment of fault under Article III of the Space Liability Convention—State A is deemed to be entirely at fault, and therefore is liable for 100 percent of the damages.

The second issue is who is liable for the second collision between the fragment of State B’s satellite and State C’s satellite. State B may argue that the piece of space debris is no longer part of its “space object” according to the definition within the Space Liability Convention, therefore State B’s space object did not cause the damage to State C’s space object. This is an outstanding issue in space law; however, such an argument is unlikely to succeed because the definition of “space object” is open to expansive interpretation. Conclusion: both States A and B are jointly and severally liable to State C, under Article IV(b) of the Space Liability Convention. The burden of compensation is to be apportioned between them “in accordance with the extent to which they were at fault.”¹⁵ Though State B is not at fault for the first collision, it is still jointly and severally liable for any damage subsequently caused by the first collision. Here, State B’s non-compliance with international best practices becomes material, as State B should be apportioned at least 50 percent of the fault for the second collision. Such a situation may be an example of how non-compliance could be “sanctioned”—through apportionment of greater than 50 percent of the fault.

The third issue is who is liable for the third collision between State C’s satellite and the property damage in State D. State C did not violate any international best practices. It continually analyzed available orbital data and frequently conducted avoidance procedures, and would have conducted avoidance procedures were it possible to have tracked the space debris created by the first collision. Conclusion: State C is liable to State D, due to Article II of the Space Liability Convention imposing absolute liability on a state for damage caused on Earth by its space object.

The fourth issue is who is liable for the fourth collision between State D’s satellite and a previously unknown piece of space debris. This piece of space debris may have come from the first collision (which created 2,000 pieces of space debris), from the second collision (which created 1,000 pieces of space debris), or from an unknown source. Conclusion: no party is liable, and State D is not compensated for damages it has suffered. This result seems strange, given that State D was acting in accordance with all international best practices and suffered damage through no fault of its own.

Due to domestic legislation, in each case the damages are paid by the state itself, but the private corporation that owned the satellite is required to reimburse the state through its compulsory insurance. If the maximum available insurance does not satisfy the damages, the state has no recourse for recouping the remaining damages.

Conclusion

Space debris poses a growing threat to the space industry. Ensuring a detailed and logical system of liability for damage caused by space objects should occur before events such as the Kessler Syndrome occur. As such, the Space Liability Convention should be reformed, as it has been unchanged since its adoption 43 years ago. Further, the imposition of unlimited liability, both absolute and fault-based, by the Space Liability Convention creates uncertainty within the space industry. The above analysis demonstrates that liability in space may not be just or even logical at times, though the use of compulsory insurance in many states serves as a method of protecting the viability of the private space industry. However, this does not remove the risk, but rather shifts the risk to the insurance industry. The space industry undoubtedly pays a premium to the insurance industry in order to address this risk. In order to ensure insurance for the space industry is reasonable, liability under the Space Liability Convention and domestic legislation should consider international best practices, such as those provided in the Space Debris Resolution.

Endnotes

1. Space Liability Convention at Article I(c).
2. Space Liability Convention at Article I(c).
3. Space Liability Convention at Article V.
4. United Nations Office of Outer Space Affairs, “National Space Law Collection” (2015).
5. Rules Concerning Space Activities and the Establishment of a Registry of Space Objects, 2006 [Dutch Space Activities Act].
6. Dutch Rules Concerning Space Activities at s. 12.
7. Dutch Rules Concerning Space Activities at s. 10.
8. An Act About Space Activities, and for Related Purposes, 1998 [Australian Space Activities Act].
9. Australian Space Activities Act at s. 48(3).
10. Australian Space Activities Act at s. 69(4).
11. Australian Space Activities Act at s. 48(1(d). Interestingly, in the case of an overseas launch, the insurance need only cover the State of Australia for the launch, but not the return of the space object: Australian Space Activities Act, s. 48(2). In contrast, the Australian space company must obtain insurance for both the launch and return: Australian Space Activities Act, s. 48(1)(a)-(b). This is strange, as under the Space Liability Convention the State of Australia is defined as the “launching State,” and therefore the liable party, throughout the launch and return of the space object.
12. Swedish Act on Space Activities, 1982 at s. 6.
13. Law of the Russian Federation About Space Activity, Decree No. 5663-1 of the Russian House of Soviets at Article 30.
14. Law of the Russian Federation About Space Activity, Decree No. 5663-1 of the Russian House of Soviets at Article 30(1).
15. Space Liability Convention at Article IV(2).

Scott Kerr (scott.william.kerr@gmail.com) is a Canadian qualified lawyer with a corporate-commercial litigation practice and a particular interest in space law and policy. He has received a Juris Doctor (Distinction) and Bachelor of Arts (Honours) from Western University, and a Master of Science in Environmental Science from the University of Sydney. He is currently a Fox Scholar at the Honourable Society of the Middle Temple in London, England.

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