Date of this Version
National Space Legislation in Europe: Issues of Authorisation of Private Space Activities in the Light of Developments in European Space Cooperation, Frans G. von der Dunk, editor. Studies in Space Law, vol. 6. Leiden: Nijhoff, 2011. Chapter 4, pp. 125–161.
First three paragraphs:
It is probably difficult to overstate the importance of liability and the related area of insurance when domestic legislation in the field of space activities is concerned, as such activities still constitute a relatively hazardous undertaking and the risks of something going horribly wrong are always close at hand. Moreover, though fortunately so far major accidents as a consequence of space activities—at least on earth—have not occurred, if they would occur there should be little doubt that they may cause major damage, potentially even of a catastrophic size. As a consequence, the question as regards who would be liable to pay for such damage, and as a follow-up whether and to what extent insurance might (have to) cover such liability compensation, is indeed of great importance.
In the context of national authorisation specifically, the issue of liability is framed by the general framework developed at the international level by means, principally, of Article VII of the Outer Space Treaty1 and the Liability Convention.2 The starting point in this respect is the principled allocation of liability for damage caused by a space object to the “launching State” or “launching States” of that space object.
Article II of the Liability Convention provides in this respect: “A launching State shall be absolutely liable to pay compensation for damage caused by its space object on the surface of the Earth or to aircraft in flight,”3 whereas Article III along the same lines provides: “In the event of damage being caused elsewhere than on the surface of the Earth to a space object of one launching State or to persons or property on board such a space object by a space object of another launching State, the latter shall be liable only if the damage is due to its fault or the fault of persons for whom it is responsible.”4