Commercial Exploitation of Space: Space Industry Act 2018

Author Mike Gimelbelb
Licence Copyright waived by author
Source Wikipedia

Jane Lambert

For many years space was a government activity largely because most of the early uses of the technology were military and the vehicles that launched transported people and objects into space were developed from missiles. Gradually, civilian uses were found for the technology such as satellite broadcasting, remote sensing and telecommunications.  The value of the global space market is between £155 and £190 billion and likely to rise to £400 billion by 2030 according to the Space Sector Report 1 which was prepared for the House of Commons Committee on Exiting the European Union. The Industrial Strategy white paper states that the United Kingdom has about 6.5% of that market and that the government hopes to increase that share to 10% by 2030.

In order to achieve that goal the British government has to update the legal framework that regulates the industry.  The legislation that currently applies is the Outer Space Act 1986 which prohibits:
(a) launching or procuring the launch of a space object;
(b) operating a space object; and
(c) any activity in outer space
without a licence from the Secretary of State.  S.5 (2) of that Act sets out the conditions under which licences may be granted. These include

" requiring the licensee to insure himself against liability incurred in respect of damage or loss suffered by third parties, in the United Kingdom or elsewhere, as a result of the activities authorised by the licence."

The purpose of that condition is to indemnify the government against any liability under Art VIII of the annex to the Outer Space Treaty (Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies). It has proved very difficult for space operators to obtain cover against such liability because it was unlimited. As a result, it has been necessary to launch British satellites from sites outside the UK which has inhibited the development of the space industry in this country.  To address that and other issues, the white paper promised new legislation "to enable a safe and supportive regulatory environment" for space activities.

The promised legislation is the Space Industry Act 2018 which received royal assent on 15 March 2018.  S.34 (2) of the new Act imposes strict liability on operators of space activities carried out in the UK for "injury or damage is caused to persons or property on land or water in the United Kingdom or in the territorial sea adjacent to the United Kingdom, or to aircraft in flight over any such land, water or sea, or to persons or property on board any such aircraft—
(a)  by any craft or space object being used by a person (“the operator”) for spaceflight activities,
(b)  by anything falling from such a craft or object, or
(c)   by any person in such a craft."
It will no longer be necessary to prove negligence or intention or other cause of action on the part of the operator because damages will be recoverable as if injury or damage had been caused by the wilful act, neglect, or default of the operator.  It will continue to be necessary under s.36 (1) for those carrying out such activities to indemnify the government and other public authorities against any claims that may be brought against the government, or the person or body, in respect of damage or loss arising out of or in connection with those activities.  As before, those carrying out such activities will need to be licensed under s.8 of the Act and licensees will need to be insured against liability to the government under s.36 or third parities under s.34 but s.12 (2) enables a limit to be put  on the amount of the licensee’s liability under section 36 in respect of the activities authorised by the licence.  If the damages exceed the insured amount the government may indemnify the insured under s.35 (2) in respect of the difference.

The UK Space Agency, which is an executive agency, sponsored by the Department for Business, Energy & Industrial Strategy that is  responsible for all strategic decisions on the UK civil space programme, has recently published a call for evidence to inform further policy development of the Space Industry Act 2018 provisions on liability, insurance and charging to assist the government to set limits to operators' liability for injury and damage and the amount of insurance that they should carry. Responses are required by 25 May 2018.

Setting limits to operators' liability for injury and damage caused by space activities is only one of several issues addressed by the new Act.  Its purpose is to create a regulatory framework to enable commercial spaceflight activities (involving both launch to orbit and sub-orbital spaceflight) to be carried out from spaceports in the United Kingdom.  It is a substantial statute consisting of 72 sections and 12 schedules covering such matters as the appointment of a regulator, licensing, monitoring and enforcing compliance, spaceports and the safety and security of spacecraft.  UKSpace, the trade association of the Brutish space industry, has welcomed the legislation (see UKspace welcomes the Space Industry Bill passing into law 15 May 2018).

Anyone wishing to discuss this article, the Act in general or any other legal issue affecting the space industry should call me on 020 7404 5252 during office hours or send me a message through my contact form.


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