CIVIL LIABILITY IN EUROPE FOR TERRORISM-RELATED RISK

Transcription

1 CIVIL LIABILITY IN EUROPE FOR TERRORISM-RELATED RISK Today terrorism has become a worldwide phenomenon which does not stop at the European borders. Following the 9/11 attacks on the World Trade Center and terrorist attacks in Paris, Madrid and London, concerns have arisen in Europe about potential liability exposure for terrorismrelated damage. This book tackles the problem of civil liability for damage caused by terrorist acts from several angles. The authors expertly deliver a comprehensive analysis of terrorism-related risk under international and EU law and the national tort law systems of seven representative EU Member States. They also provide a comparison of the situation in Europe with the liability environment in the US. Risk mitigation strategies are considered and critically assessed, as are alternative systems for redressing terrorism-related risks. The book concludes with a reflection on the analysis and presents possible strategies for future regulation by European lawmakers. lucas bergkamp is a partner in Hunton & Williams LLP s Brussels office and heads the European Regulatory practice. His practice concentrates on regulatory issues, in particular environmental, health and safety, product regulation and related liability and transactional matters. He currently teaches in the Masters of European Energy and Environmental Law at KU Leuven. michael faure is Professor of Comparative Private Law and Economics at Erasmus University Rotterdam, and Professor of Comparative and International Environmental Law at Maastricht University. He serves also as Academic Director of the Maastricht European Institute for Transnational Legal Research (METRO). monika hinteregger is Professor of Civil Law at the Department of Civil Law, Foreign and International Private Law of the Karl Franzens University Graz, Austria. She has published abundantly on the topic of tort law and environmental liability. niels philipsen is Associate Professor in Law and Economics at Maastricht University and serves as Vice-Director of the Maastricht European Institute for Transnational Legal Research (METRO).

2 cambridge studies in international and comparative law Established in 1946, this series produces high quality scholarship in the fields of public and private international law and comparative law. Although these are distinct legal sub-disciplines, developments since 1946 confirm their interrelations. Comparative law is increasingly used as a tool in the making of law at national, regional and international levels. Private international law is now often affected by international conventions, and the issues faced by classical conflicts rules are frequently dealt with by substantive harmonisation of law under international auspices. Mixed international arbitrations, especially those involving state economic activity, raise mixed questions of public and private international law, while in many fields (such as the protection of human rights and democratic standards, investment guarantees and international criminal law) international and national systems interact. National constitutional arrangements relating to foreign affairs, and to the implementation of international norms, are a focus of attention. The series welcomes works of a theoretical or interdisciplinary character, and those focusing on the new approaches to international or comparative law or conflicts of law. Studies of particular institutions or problems are equally welcome, as are translations of the best work published in other languages. General Editors James Crawford SC FBA Whewell Professor of International Law, Faculty of Law, University of Cambridge John S. Bell FBA Professor of Law, Faculty of Law, University of Cambridge A list of books in the series can be found at the end of this volume.

3 CIVIL LIABILITY IN EUROPE FOR TERRORISM-RELATED RISK LUCAS BERGKAMP, MICHAEL FAURE, MONIKA HINTEREGGER AND NIELS PHILIPSEN

4 University Printing House, Cambridge CB2 8BS, United Kingdom Cambridge University Press is part of the University of Cambridge. It furthers the University s mission by disseminating knowledge in the pursuit of education, learning and research at the highest international levels of excellence. Information on this title: / C 2015 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2015 A catalogue record for this publication is available from the British Library Library of Congress Cataloguing in Publication data Civil liability in Europe for terrorism-related risk / Lucas Bergkamp, Michael Faure, Monika Hinteregger and Niels Philipsen. pages cm. (Cambridge studies in international and comparative law) Includes bibliographical references and index. ISBN Terrorism European Union countries. 2. Terrorism. 3. Liability (Law) European Union countries. 4. Risk (Insurance) European Union countries. I. Bergkamp, Lucas, author. II. Faure, Michael (Michael G.) author. III. Hinteregger, Monika, author. IV. Philipsen, Niels, 1975 author. KJE8780.C dc ISBN Hardback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.

5 CONTENTS Introduction (Lucas Bergkamp, Michael Faure, Monika Hinteregger and Niels Philipsen) The problems posed by terrorism for civil liability Potential claimants and potentially liable parties Structure of analysis 4 part i. International and EU law 9 1. Liability for terrorism-related risks under international law (Michael Faure, Jing Liu and Niels Philipsen) Civil aviation Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface Brief summary of the regime Basis of liability Liable persons (attribution of liability) Damage covered Exclusions and defences Financial security and compensation mechanisms Relevance of the Rome Convention Convention for the Unification of Certain Rules for International Carriage by Air Brief summary of the regime Basis of liability Liable persons (attribution of liability) Damage covered Exclusions and defences Financial security and compensation mechanisms Relevance of the Montreal Convention Nuclear liability Summary of the regime Basis of liability 21 v

6 vi Liable persons Damage covered Exclusions and defences Financial security and compensation mechanisms Jurisdictional and procedural issues Relevance of the nuclear liability conventions Marine oil pollution Brief summary of the regime Basis of liability Liable persons Damage covered Exclusions and defences Financial security and compensation mechanism Jurisdictional and procedural issues Relevance of the marine oil pollution conventions Other relevant treaties International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea Brief summary of the regime Basis of liability Liable persons Limitation of liability Financial security and compensation mechanism Jurisdictional issues Conclusions Protocol on Civil Liability and Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents on Transboundary Waters Brief summary of the regime Basis of liability Liable persons Limitation of liability Financial security and compensation mechanism Conclusions United Nations Convention on International Liability for Damage Caused by Space Objects Brief summary of the regime Basis of liability Liable persons Damage covered Exclusions and defences Conclusions 50

7 vii 1.5. Conclusions Comparing liability regimes Relevance of the international treaties for TRR Policy relevance Liability for terrorism-related risk under EU law (Lucas Bergkamp and Nicolas Herbatschek) Introduction Member State liability for terrorism-related risk under the Francovich doctrine EU laws and policies regarding terrorism EU policy on combating terrorism Directive 2004/80/EC relating to compensation to crime victims Brief summary of the regime Implications for liability for terrorism-related risk EU legislation relevant to liability for terrorism-related risk Environmental Liability Directive Brief summary of the regime Exclusions and defences Causation Environmental Liability Directive s implications for terrorism-related risk Product Liability Directive Brief summary of the regime The concept of defect Exclusions and defences Causation Product Liability Directive s implications for terrorism-related risk Regulations and effects on liability EU legislation regarding cross-border claims Regulation 44/2001 on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters Brief summary of the regime Conclusions Regulation 864/2007 on the law applicable to non-contractual obligations Brief summary of the regime Conclusions Conclusions Liability regimes 82

8 viii Regulatory regimes Relevance for the security industry 84 part ii. Liability for terrorism-related risk under Member State law Civil liability systems of seven EU Member States (Monika Hinteregger) Bases of liability Fault-based liability Legal basis Duty of care and unlawfulness Breach of duty of care and fault Contributory negligence Vicarious liability Burden of proof Product liability Special liability regimes General instruments increasing liability exposure for dangerous activities Special third-party liability regimes Aeroplanes Genetically modified organisms (GMOs) Nuclear installations Medical products (pharmaceuticals) Environmental harm Relationship between tort liability and regulation Relationship between tort liability and regulation in general Specific regulations affecting liability risks of security providers Causation Standard burden of proof regarding causation Instruments to lighten the burden of proof regarding causation Attribution of liability Damages and available remedies Types of compensable damages Exclusion of heads of damage by contractual agreement Special instruments for mitigating the liability of the tortfeasor 111

9 ix 3.6. Alternative compensation mechanisms Alternative compensation schemes Compensation schemes for victims of terrorism Special rules on case management Case studies (Cases: Monika Hinteregger; England and Wales: Claire McIvor; France: Florence G sell; Germany: Peter Rott; Netherlands: Siewert Lindenbergh and Willem van Boom; Poland: Ewa Baginska; Spain: Pedro del Olmo; Sweden: Philip Mielnicki and Marten Schultz) Case 1 Defective emergency stop button Case 2 Defective safety programmable logic controller Case 3 Public service (infrastructure) undertaking Case 4 Border control Case 5 Aeroplane crash Comparative analysis (Monika Hinteregger) Liability of operator of dangerous activities Heads of liability Fault-based liability Strict liability Liability of security providers Towards customers Towards third parties Fault-based liability Duty of care Effect of regulations for the security provider on fault-based liability Product liability Recourse of operator against security provider and vice versa Liability for pure economic loss and environmental damage Liability for damage caused by natural disaster or act of terror Case 2: Negligence and fault-based liability Case 3: Public service undertaking Case 4: Border control Case 5: Aeroplane crash Conclusions Liability of operators of dangerous activities Liability of security providers Liability to customers Liability towards third parties Pure economic loss and environmental harm Multiple causation and recourse 204

10 x Standard and burden of proof Liability of operators or security providers for damage caused by natural disaster or act of terror 205 part iii. Assessment of liability for terrorism-related risk Insurance of terrorism-related risks (Michael Faure and Niels Philipsen) Insurance: Legal and economic background Reducing risks Conditions of insurability Conclusions Insurance of man-made disasters Demand-side problems: the case for compulsory liability insurance Supply-side problems Government support needed? The case for public private partnerships Government providing an additional layer The Consorcio de Compensación de Seguros The Fukushima case Insurance of terrorism-related risk Conclusions Contracting for liability limitation (Lucas Bergkamp and Michael Faure) Industry practices with respect to limitation of liability Analysis of three specific sectors Industry practices in other sectors Relevance for the security industry Risk mitigation strategies Conclusions Alternative systems for redressing terrorism-related risks (Lucas Bergkamp and Michael Faure) The US Safety Act Exclusive federal cause of action against sellers of QATT Exclusive jurisdiction in a federal district court Limited relief Government contractor defence Liability capped to the amount of insurance coverage Institutional features 258

11 xi Central role of federal agency Exclusive federal cause of action Procedural features Review procedure Publication of the decisions Supervision of the use of the Safety Act mark Substantive features Insurance of natural disasters First-party insurance for natural disasters Demand-side problems The case for comprehensive disaster insurance Theory Examples Supply-side problems Government support CCR CEA Conclusions Victim compensation solutions Government-provided compensation Arguments in favour of government compensation Arguments against government compensation Policy recommendation Is liability for terrorism-related risk enterprise-threatening? (Lucas Bergkamp and Nicolas Herbatschek) Introduction Terrorist attacks and case law The September 11 attacks (9/11) The Lockerbie bombing The Korean Air Lines shootdown World Trade Center bombing School, theatre and mall shootings Arguments in favour of limiting liability for terrorism-related risk in the EU The extent of liability exposure Risk mitigation strategies Conclusions Economic analysis of current liability for terrorism-related risk and alternatives (Michael Faure and Niels Philipsen) Goals and functions of liability law 301

12 xii Goals Functions Lessons from EU law Lessons from international law Limiting liability Mandatory financial security Conclusions Is there a role for the European Union? (Lucas Bergkamp and Nicolas Herbatschek) Options to limit liability Safety Act Other liability limitations Initiatives addressing issues in the market for security goods and services Initiatives aimed at the insurance market A Commission recommendation or communication? Procedural solutions Victim compensation solutions Initiatives aimed at informing the security industry and, as necessary, insurers, Member States and other stakeholders about issues of liability (and, if necessary, insurance and contracting) Prerequisites in institutional EU law EU competence General principles of EU law Conclusions 329 Conclusions (Lucas Bergkamp, Michael Faure, Monika Hinteregger and Niels Philipsen) 330 Bibliography 338 Index 356