HL Deb 04 March 1965 vol 263 cc1273-88

3.25 p.m.

Order of the Day for the Second Reading read.

THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM)

My Lords, I beg to move that this Bill be read a second time. The Bill deals with the establishment of an international system governing civil liability for injury or damage arising from the use of nuclear energy. It is necessary, so that we can amend our law, to enable us to ratify three international Conventions in the field of nuclear energy. The United Kingdom played a leading part in the negotiation of the main Conventions, and it is obviously desirable that we should put ourselves in a position to ratify them at an early date.

It is a short but, as your Lordships will doubtless agree, a complicated Bill. But the Conventions are by no means simple documents, and we are amending a rather complicated Act. Moreover the subject is technical in both the legal and the scientific sense. I will, however, do my best to make the main provisions of the Bill clear. As described in the Title, it amends and extends the Nuclear Installations (Licensing and Insurance) Act, 1959, [...] it would therefore perhaps be helpful if I first explained, briefly, the main pro- visions of that Act on liability and compensation. As you will be aware the 1959 Act also imposed safety control by licensing, but this Bill does not amend those provisions significantly.

Atomic energy harnessed to peaceful purposes is a novel and exciting development, but naturally it gives rise to fears in the minds of many people. It has a potential for doing damage in a way not known before, since radiation cannot be detected by the senses, and its effects are often long-delayed. Fortunately, the chances of an accident causing injury or damage are remote. The excellent safety and health record of the atomic energy industry puts this beyond doubt, and indeed no claims have been made at all against any licensee since the Act came into force in 1960.

The 1959 Act made special legal provisions to protect those who might be affected in the unlikely event of an accident. Absolute liability was imposed on operators of nuclear installations, because the potentially dangerous nature of their activities, and the type of damage which could be caused, made it unfair to leave on the plaintiff the burden of proving negligence. Because of the long-delayed effects, the limitation period on claims was extended to 30 years. And in order to ensure that funds would be available to meet claims, compulsory insurance in the sum of £5 million was imposed, and provision was made to deal with the remote contingency that this sum might prove insufficient.

But the Act was not confined to protecting those who might be injured or suffer damage. It was also designed to minimise the financial burden on the industry arising from the peculiar nature of the potential hazard. It therefore provided for all liability arising from a nuclear accident to be channelled to the operator responsible. This ensures that the burden on the industry as a whole of providing insurance cover for the liability is kept to a minimum. These are the main provisions of the 1959 Act which it is the Government's intention to preserve in the present Bill, since the international Conventions are based on these same principles. The 1959 Act, however, dealt with our domestic situation as it was then; and now that the Conventions provide the basis for an international regime this Bill is needed so that we can extend and amend our present law.

There are three Conventions which have been signed on behalf of Her Majesty's Government. Two are of regional application and one world-wide, and they are all worthy of support since they will facilitate international exchanges in the peaceful use of atomic energy. At present, nuclear material is moving internationally under some disadvantages which increase costs and inhibit the development of atomic energy. The United Kingdom is an exporter in the nuclear field of know-how, hardware, and nuclear fuel, and plays a leadingrô le in international transport. It is therefore very much in our interest to promote the widest acceptance of the Conventions.

The first Convention in this field was prepared by the Organisation for European Economic Co-operation and signed by member States in July, 1960, in Paris. This was followed by the preparation, under the auspices of the International Atomic Energy Agency, of the Vienna Convention which was adopted at an international conference in May, 1963. As a result, in Paris, the countries concerned agreed an additional Protocol to the Paris Convention which had the effect of amending it to make it compatible with the Vienna Convention, and identical with it in most respects. This Protocol was signed in January, 1964, and its completion was a very outstanding piece of European co-operation since the amendment of the first Convention in the field, before it was in force, could not be lightly contemplated and could not have been so quickly and successfully completed without the utmost good will of all the parties concerned.

The third Convention is supplementary to the Paris Convention and was signed at Brussels in January, 1963. It provides for burden-sharing between the parties to it in the unlikely event of a nuclear accident of disastrous proportions. As a consequence of the Protocol added to the Paris Convention, a Protocol to the Supplementary was also necessary, and this was signed in Paris in January, 1964. All three Conventions are therefore fully compatible, and, as I have said, the object of the Bill is to put us in a position to ratify them.

The Conventions have the following four main objects: first, to channel all liability to the operator of the nuclear installation in which the incident happened, or from which or to which nuclear material is sent; secondly, to impose on the operator absolute liability; thirdly, to limit that liability to a prescribed amount which should not be less than £1¾ million per incident; and, fourthly, to ensure that adequate funds are made available to meet this liability, and that they are used exclusively for that purpose. A few exceptions to these principles to cover special cases, mainly in relation to transport, are provided for. The 1959 Act already establishes in our domestic law these main principles, but its scope is not wide enough in three important ways. First, it covers only some transport incidents involving irradiated nuclear fuel in transit between places in the United Kingdom. The Conventions cover other nuclear materials, such as enriched uranium and plutonium, extend to all transport incidents within their territorial scope, and ensure that an operator is always liable. The Bill, therefore, extends the law to cover nuclear material other than irradiated fuel, and to cover all relevant transport cases including the liability of foreign operators within our jurisdiction. Secondly, the Act deals only with damage due to ionising radiations, whereas the Conventions cover the other hazardous properties of nuclear material.

A your Lordships are aware, the 1959 Act dealt only with damage due to ionising radiations, that is, due to the radioactive properties of nuclear matter, since the other hazards which may arise, for example, from the chemical toxicity of such matter, do not have the special characteristics of the radioactive hazard. But in negotiations on the Conventions it was thought necessary to cover all the damage due to an incident causing radioactive damage. This led to difficulties of interpretation and gave rise to the provision on separability of damage on which Clause 4 (2) of the Bill is based. The position under the Bill is therefore more complex than under the 1959 Act which ignores the other hazardous properties of nuclear matter and involves no test of separability. Moreover, the liability imposed by the Conventions is on a per incident basis, whereas the Act deals with damage caused during period covered by insurance.

Insurance for nuclear liability is available only on a per installation per cover period basis; so far as we are aware this is so throughout the world. But, in order to give full protection to the public, the Conventions call for cover for the liability to be on a per incident basis. In common with other countries wishing to ratify the Conventions, we must therefore provide backing from public funds for any difference there might be between the per cover period and per incident basis. Such a difference could arise only if two incidents engaging the responsibility of the operator of one installation occurred simultaneously or in very quick succession and together caused damage exceeding £5 million. The position under the Act is that, in this respect, liability and insurance cover correspond; under the Bill, provision is made in Clause 8 (1) and (4) to cover any gap there might be. Within our jurisdiction the matter is not significant, because of our system of meeting all established claims in full. But for a United Kingdom operator abroad (outside the coverage of the Supplementary Convention), had the system of the Act been preserved, insurance cover alone would have provided the full cover required by the Conventions.

Thirdly, the Bill necessarily contains a number of rather complicated provisions dealing with liability, rights to compensation, and cover for liability, in order that our law should comply with the three Conventions. It also makes rules concerning jurisdiction, shared liability, and foreign judgements required by the Conventions.

A notable feature of the Bill is the wide jurisdiction taken, which is necessary under the rules of the Conventions which ensure a single jurisdiction. In addition to covering incidents occurring in the United Kingdom, when a United Kingdom operator is concerned, the Bill imposes liability world-wide except for, first, incidents occurring in other contracting States (that is because it will be for such States to impose liability by their own law); and, secondly, for damage suffered in non-contracting States,with an exception in relation to United Kingdom ships and aircraft. These provision reflect the general arrangement under the Conventions that the State of the operator has jurisdiction, except where the incident occurs within another contracting State.

The Bill also makes provisions which are not required under the Conventions. The first and most important set of these deals with international cases not covered by the Conventions. The international system will in time, we hope, become world-wide, but it is bound to take some years to achieve this. Forty-three nations voted in favour of the Vienna Convention, and none against, but it must be recognised that it is a compromise less acceptable to some countries than others. For some time there will be many countries, including a number in the forefront of atomic energy development, which are unlikely to ratify it. We hope, however, that when they have seen it in force they will agree that it provides at least a very good start to regulating liability for damage due to nuclear incidents in the interests of public assurance and protection, and the promotion of the development of nuclear energy for the benefit of the world. I should emphasise that the Conventions do not deal with safety: other international arrangements provide for this.

Under the Conventions, as we are applying them, damage suffered in a non-contracting State is not covered. But, if we left it at that, a claimant in a non-contracting State could be placed in a more favourable position than one in a contracting State. This would happen if the laws of the non-contracting State imposed liability on a United Kingdom operator in excess of that permitted by the Conventions, since the judgment of its courts could normally be enforced here. Moreover, one of the main aims of the Conventions and of our legislation—the channelling of liability to the operator—would be defeated if these laws imposed liability on persons other than the operator, who might be held responsible for causing or contributing to an incident. Clause 7 (5) of the Bill therefore bars enforcement of judgments in such cases.

Another problem arises because the Conventions will not be universally applied at once. We will be able to ensure that nuclear material entering this country from abroad normally engages the liability of a Convention operator; but there may well be traffic between non-contracting States which crosses our territorial waters, and in an emergency the docking or landing of ships or aircraft in the United Kingdom may take place in circumstances where liability ought to rest on persons other than Convention operators. Clause 3 of the Bill therefore imposes absolute liability in such cases. The liability of course is unlimited because there is just no basis or reason for setting a limit. The persons affected by the clause will normally be operators from non-contracting States.

There is a third international case for which the Bill makes provision outside the requirements of the Conventions. It is considered necessary, particularly for the protection of crews, to impose liability on a United Kingdom operator responsible for damage suffered to or on British ships or aircraft in the territories of non-contracting States. This is effected by Clause 5 (2) and will also protect carriers and is particularly desirable in view of the bar to enforcement of foreign judgments under Clause 7 to which I have referred.

The second set of provisions, not required under the Conventions, preserve and extend to the wider scope of the Bill a number of the features of the 1959 Act. The Paris and Vienna Conventions establish minimum standards so that countries with small resources, and involved so far in atomic energy only on the research side, can reasonably be expected to ratify. However, in common with other industrial Powers, the United Kingdom intend to go further. The supplementary Conventon greatly increases the financial protection to be made available, but in addition Clause 6 (3) of the Bill provides that all established claims within our jurisdiction will, subject to Parliamentary sanction, be met in full. Similarly, the period of limitation for claims remains at 30 years, although the Conventions require only 10 years.

Finally, we have taken the opportunity to make a number of minor amendments to the licensing provisions of the 1959 Act. Since it came into force in April, 1960, this Act has proved itself to be a very practical piece of legislation. But in this hitherto uncharted and developing field, it is not surprising that a number of improvements have been found to be desirable; and these are effected by Clause 11 of the Bill. It may be helpful therefore if I say a few words in amplification of my earlier reference to the supplementary Convention. Both the Paris and Vienna Conventions are intended to set minimum standards which can be reasonably met by countries having small resources and which are not at an advanced stage in the development of atomic energy. But richer and more advanced countries will wish to provide greater availability of moneys should they ever be needed, and the Supplementary Convention provides for this and for a useful sharing of the burden among the parties to it in the case of a very severe incident. The Paris Convention, like the Vienna Convention, provides for a minimum liability of £1¾ million per operator per incident, but the Supplementary Convention requires each country to make available from its own individual public funds sufficient money to ensure that compensation up to £25 million would be available, if needed, for claims arising out of an incident for which one of its own operators was liable. On top of this, the partners would make available collectively sufficient money to bring the total to 120 million dollars or £43 million. We have, therefore, first the £5 million to be covered by insurance; the second tranche raises this to £25 million to be provided by the operators country; and the third tranche of £18 million to be provided collectively by the countries in the "club". These arrangements would be used, of course, only to benefit members of the "club". I hope it will be agreed that this useful partnership between the Six and certain other countries of the Organisation for European Co-operation and Development and ourselves will provide reassurance to the public, and to suppliers and carriers, without imposing an unacceptable burden on us. The rather complicated provisions of Clause 8 of the Bill will put us in a position to ratify these provisions of the Supplementary Convention.

I have tried, perhaps without complete success, to deal with the main points arising on the Bill and the Conventions, without getting lost in complicated detail. With the subject so complex, and having regard to the structure of the Bi[...] thought it best to deal with its ma[...] effects without constant reference to individual clauses. I hope that by this means I have convinced your Lordships that the Conventions fully merit our support; that the manner in which we propose to implement their provisions is the right one; and that matters arising outside the Conventions should be dealt with in the way I have described. In the course of my speech I have mentioned some rather large sums of money, but would reiterate that, with the high standard of safety measures in force, we are confident that the chances of a nuclear incident causing damage on a large scale are remote. It is most unlikely that the £5 million provided by insurance will ever be fully required, much less prove insufficient. Nevertheless, the inclusion in the Supplementary Convention and national legislation of a figure of £43 million per incident gives valuable assurance that no victim of a nuclear incident will go uncompensated because the resources of the operator responsible are insufficient. The Bill and the Conventions giving rise to it inevitably contain technical and legal detail of daunting complexity, but I trust that the explanation of the main issues is clear. In this matter of universal public concern, I am sure that your Lordships will approve the Government's determination to safeguard the interests of the public against all foreseeable hazards by fully supporting the Conventions; by dealing with certain international cases not covered by the Conventions, and by preserving special features of the 1959 Act as proposed in the Bill. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Stonham.)

3.50 p.m.

THE EARL OF BESSBOROUGH

My Lords, I am sure that we on this side of the House are most grateful to the noble Lord, Lord Stonham, for his clear exposition of what is in fact a highly complicated Bill—indeed, in another place it was described as a most horrible measure, a nightmare for anyone who was not a practising lawyer. I might add that I think even practising lawyers have had some nightmares over it. But we on this side must be grateful to the noble Lord, because it is substantially our Bill, and we therefore welcome it warmly. It was considered in great detail in another place throughout its various stages. It was given a useful Second Reading, a Committee stage which itself ran into some 168 columns in Hansard, as well as debates, which is not always the case, on Report stage and on Third Reading. We are therefore most grateful to the Government, and to Ministers in another place, too, for dealing courteously and in detail with the many points which were raised by the Opposition, and indeed largely meeting them.

I fear that this was in contrast to the Science and Technology Bill which, as I said the other day, was certainly rushed through another place, perhaps with somewhat undue haste. The Committee stage was curtailed and there was no proper Report stage or Third Reading. In this case, however, I think we should express gratitude to the Government for having adopted what is our Bill; and I think that we in this House should repeat our congratulations to all those who were concerned with the preparation of it, officials and Members on both sides of the House, and also to those who put so much work in on the three international Conventions which the Bill seeks to ratify.

As we have heard from the noble Lord, the Bill amends and extends the Nuclear Installations Act, 1959. The three main objects of that Act were briefly these: to provide for licences for those who wanted to operate nuclear installations; to impose on licensees absolute liability, or at any rate a wide measure of liability, for damage to third parties; and also to ensure that licensees should have adequate funds at their disposal to meet what could well be extremely heavy claims. The present Bill, as I think your Lordships will have gathered, extends the 1959 Act in four respects. It extends absolute liability to nuclear materials other than only irradiated nuclear fuel in transit; secondly, the occurrences covered are no longer restricted to those which take place only on the licensed site or in the course of carriage within the United Kingdom; thirdly, liability is extended, as the noble Lord said, to foreign operators for incidents in the United Kingdom; and, fourthly, the Bill limits licensees' liability to £5 million for each occurrence. I think it was made clear that any amount by which the insurance cover falls short of £5 million is to be found out of moneys provided by Parliament, or out of funds provided by whatever means Parliament may determine.

This is a non-political Bill and, as I say, my honourable friends in another place who were the spokesmen on these matters now seem reasonably happy about it. It is true that during both the Committee stage and the Report stage in another place there were long discussions on the words, which resulted, rightly, in the substitution of the word "injury" for the word "hurt". The Minister without Portfolio and the Parliamentary Secretary met this point satisfactorily, and so, I think, has the noble Lord, and I doubt whether anyone on this side of the House will wish to put forward any further Amendments during our Committee stage. I think, too, that the problems of unborn children and the extension of the time within which a claim can be made were also fully dealt with in another place.

There was some considerable discussion on one particular suggestion—namely, that one Minister, and only one, probably the Minister of Power, whom the noble Lord, Lord Stonham, represents, should be the sole authority in relation to claims. If I may perhaps be permitted a touch of irony, I do not think that we can really expect the present Government to have only one Minister responsible for anything. But I do not propose to pursue that matter this afternoon, apart from saying that I am sorry that, for reasons with which we are familiar, the Minister of Technology was not able to take part in the debates in another place. I see, incidentally, that the Parliamentary Secretary to the Ministry of Power said that when the Bill came to your Lordships' House the Parliamentary Secretary to the Ministry of Technology would of course be able to deal with matters here—that is in column 45 of the OFFICIAL REPORT of Standing Committee "A". While I am very glad indeed that the noble Lord, Lord Stonham has dealt effectively with the provisions of this Bill, I am sorry that, contrary to the promise given in another place, the noble Lord, Lord Snow, is not here, because the Minister of Technology, under whom the Atomic Energy Authority now comes, has quite definite responsibilities under this Bill, especially, as I say, in regard to claims under Clause 6 (3) (i).

I think it decidedly unfortunate that neither Minister of Technology, whether in your Lordships' House or in another place, should have been, or should be, taking part in our discussions, for the Bill, especially on questions of claim with which the Minister of Technology is so closely concerned, is indeed most important. I am sorry, therefore, that the noble Lord, Lord Snow, is not here to-day, although I did see him earlier. If the Ministry of Technology is to accept responsibilities under this Bill, I think that one at least of its Ministers should take part in the preparation and discussion of it. I leave that point for your Lordships to judge.

I accept what has been said in another place, and particularly in regard to the liability of operators of nuclear ships: and I agree that, above all, we should get this Bill through as fast as possible. I think mainly in order to stimulate other countries also to ratify these three Conventions. I hope that consultations with the Commonwealth and Colonial Governments concerned, as well as certain other countries, will proceed as rapidly as possible.

There was, it is true, one matter which was discussed in another place on which it was thought that your Lordships might have something further to say—I refer particularly to Clause 13 and the problems of interpretation. Under this clause, at the bottom of page 17 of the Bill, it will be seen that it has been agreed that the word "injury" means personal injury and includes loss of life. But there may still perhaps be a little doubt about the position of a corporate rather than an individual plaintiff. The noble Lord will recognise that this matter was discussed in great detail in another place, and an example was given there of circumstances in which a factory operated by a company was put out of action by a nuclear incident, and loss was suffered which could not be described as damage to property—which is, of course, covered—but was purely monetary loss with claims made upon the company for breach of contract which nevertheless were attributable to the nuclear incident.

It was agreed, I think, by the Government—I hope the noble Lord agrees with me on this—that this sort of loss is certainly intended to be covered by the Bill and to be comprised within the absolute liability imposed upon licensees. Yet a corporate plaintiff is not, I think, precisely mentioned in the words of the Bill. I think, however, that the Minister Without Portfolio made a good point in another place when he said that it was the proper function of the Judiciary to arrive at a conclusion on this kind of matter. Since the Minister said that personal injury included loss of profit both to individuals who trade and to a corporation, that can be considered a reasonably satisfactory answer. I hope the noble Lord will be able to confirm that point. This was a question which was left open to some extent for debate in your Lordships' House, so that an assurance might be given that a corporate plaintiff would in law be in the same position under this Bill as he would be at Common Law. It was expected that this matter would be further ventilated here, and I shall be grateful to the Government if they have been able to look at the point again.

All in all, therefore, we on this side of the House are happy to give the Bill, which was in a sense conceived by us, the fullest possible support. Sometimes when I visited atomic energy establishments as Parliamentary Secretary for Science, I got the impression that the kind of dangers and risks which are contemplated under the 1959 Act and in this Bill were no longer so serious as perhaps they were considered to be in the earlier days of atomic power. It is true that great progress has been made in safety precautions, and that was implied to some extent in the noble Lord's remarks. None the less, from time to time incidents, perhaps relatively minor in so far as life and limb are concerned, but often costly, have taken place, and this Bill is therefore a most useful and indeed essential measure. I certainly think it right that we should give an example to other countries by ratifying the three Conventions without too much delay.

4.3 p.m.

LORD STONHAM

My Lords, I am most grateful to the noble Earl, first of all for a most lucid speech in which he displayed the extent to which he has studied this subject. I am also grateful for his very warm welcome to the Bill, which he quite rightly said was sub- stantially his Party's Bill. That being so, one might wonder why it took 168 columns of Hansard, and a very great deal of time in another place, to discuss it. I think the answer to that is that it is substantially the Bill of the previous Government with major improvements added to it by the present Government. Therefore, it is a co-operative effort on which we can both congratulate ourselves.

THE EARL OF BESSBOROUGH

Not major improvements.

LORD STONHAM

Again, there is a question of definition, which does not arise in this Bill which is quite complicated enough.

The noble Earl was somewhat worried by the fact that only one Minister, my right honourable friend the Minister of Power, was responsible for this Bill. I am therefore puzzled as to why in 1959 he did not get up and protest then that only one Minister, his right honourable friend the Minister of Power, was responsible for the 1959 Act.

THE EARL OF BESSBOROUGH

My Lords, if noble Lords will excuse my interrupting, there was not a Minister of Technology then. I am speaking only of him.

LORD STONHAM

That is another example of a successful and valuable amendment which this Government have made to the procedure of the previous Government. The noble Earl was worried, however, by the fact that this Bill was introduced by my right honourable friend the Minister of Power. Therefore we have followed in that respect the precedent set by the previous Government, quite rightly, and have placed responsibility with the Minister who is mainly responsible. Indeed, the electricity generating boards are the most important licensees under this Act, and they come under the Minister of Power.

The noble Earl was a little troubled, as I understood him, that the Minister of Technology who is responsible for the Atomic Energy Authority, and therefore has an important interest in this Bill, did not take part in the proceedings in the Commons. But, of course, that would have been a task even beyond the very great powers of my right honourable friend Mr. Frank Cousins, because at that time he was not even a Member of another place. Therefore, it would seem to me that these objections which the noble Earl has raised are of no more moment than the majority of objections and points which we listen to, with the greatest respect, from the other side.

THE EARL OF BESSBOROUGH

My Lords, I feel I should repeat that it was stated in another place, by the Parliamentary Secretary to the. Ministry of Power, that the Parliamentary Secretary to the Ministry of Technology in this place would be dealing with this matter, and he is not in fact with us to-day.

LORD STONHAM

If that be so, I must accept what the noble Earl says and speak to my noble friend about this in due course; because, however unworthy, I have the honour to be the representative of the Minister of Power in your Lordships' House, and would think it wholly wrong if another Minister were asked to deal with a Bill which belonged to the Minister of Power.

The noble Earl raised a point of substance with which I did not deal in my speech, and that was because of the happy prescience of my advisers who thought it wise to leave me something to say when I came to speak a second time: I refer to the point of the definition of damage and the particular position of a corporation. As the noble Earl quite rightly said, this matter caused considerable discussion in another place, and since then Her Majesty's Government have given further consideration to the need for including in the Bill a definition of "damage to property". The Government's view remains unchanged. We are confident that a plaintiff, including a corporate plaintiff, in an action under the Bill as drafted would be in the same position as he would be in an action for negligence at Common Law in which liability was admitted or proved. This is our intention, and the Bill as drafted leaves it to the court to decide, as at Common Law, the extent and quantum of damages and, in particular, any question as to remoteness of damage.

The inclusion of a definition on the lines proposed by the Opposition in another place, and to which the noble Earl has again referred to-day, would make the operator liable to pay for any loss of profits or other earnings, whether or not at Common Law they would have been held by the court to have been too remote. A great deal of thought has been given to the point, and I feel that the Government's decision is the right one. I hope that the assurance which I have now given will remove any doubt on this point and will be regarded as of some value. I am most grateful to the noble Earl for all he has said, and to your Lordships for the reception which has been given to the Bill.

On Question, Bill read 2a, and committed to a Committee of the Whole House.