Five years after the Nuclear Installations (Liability for Damage) Order 2016 (the “Order”) came onto the statute books, and almost 17 years after the updated international treaties were agreed, we have learnt that the UK Government intend to bring the Order into effect on 1 January 2022. They expect this to occur at the same time as other signatories also ratify the 2004 Protocols amending the Paris Convention on Third Party Liability in the Field of Nuclear Energy (the “Paris Convention”) and Brussels Supplementary Convention to the Paris Convention (the “Brussels Convention”).
From 1 January 2022, this would immediately increase in the liability cap of operators of nuclear installations in the UK from £140m to €700m (approx. £585m), increasing annually to €1.2bn (approx. £1bn) over the following 5 years. Other changes include:
a new operator duty not to cause significant impairment of the environment; and
additional categories of compensation for which an operator will be liable, including in some circumstances loss of profits arising from the environmental impact of a nuclear incident (eg fishermen); and
material extensions to the geographical scope of those who can claim against the operator (now including, eg, Ireland).
It is important for all nuclear industry participants (both in the UK and globally) to understand these changes. Prior to 1 January 2022 all industry participants should review their contracts and indemnities, and (especially for operators) update their insurance arrangements to ensure they are covered under the updated regime.
The 2004 Protocols updating the Paris Convention and Brussels Convention are expected to be laid before Parliament in December 2021, with the Order then coming into force on 1 January 2022. Although this process allows Parliament to veto the passage of the conventions, this is viewed as highly unlikely.
You can read our detailed note here.
Authored by Adrian Walker and Malcolm Parry.