INTRODUCTION
1. Increased Importance of Nuclear Liability Issues
The issue of nuclear liability and nuclear liability waiver clauses will likely gain increased importance in Sweden, as the construction of new nuclear power plants successively has become a strong political objective.
In 2010, the Swedish government's possibility to suspend or revoke the right to operate nuclear reactors was repealed by new legislation. Other nuclear legislation entered into force in 2011, which allowed for the construction of new nuclear reactors intended to replace a nuclear reactor which had been in operation after 31 May 2005. While the construction of new reactors became possible, only ten could be in operation at the same time.
In June 2023, the Swedish government referred a new proposal for consideration to the Council on Legislation.1 It is there proposed that the current rules, hindering the expansion of the nuclear industry, are changed so that it becomes possible to construct new nuclear reactors at other locations than the existing nuclear installation sites. It is also proposed that it shall be allowed for more than ten reactors to be in operation at the same time. In November 2023, the Swedish government appointed an inquiry chair to consider existing legislation with the view of facilitating new nuclear energy in Sweden.2
Consequently, the nuclear industry in Sweden is successively becoming less restrained and if the new proposal comes into force, it may start a new era in the industry.
2. The Intention with this Exposition
For natural reasons, the topics of nuclear liability and how nuclear liability waiver clauses should be drafted are common in connection with all deliveries of equipment, components and services to nuclear power plants.
Nuclear liability waiver clauses are normally drafted as predetermined templates by specialist counsels at the corporate headquarters of the suppliers and nuclear power plants operators. In the typical situation that two different versions of waivers – both labelled as "mandatory contract requirements" - stand against each other, those specialist counsels do not always participate in the negotiations. Rather, it is other employees of the supplier and the operator who actually discuss the wording of such clauses. Those employees are often not familiar with the underlying regulatory framework. This creates problems and deadlocks.
The main intention with this exposition is to provide an overview of the Swedish nuclear liability rules, along with some suggestions on how to approach the issue of nuclear liability waiver clauses. It is recognized that the corporate instructions of suppliers to the nuclear industry and operators of nuclear power plants seldom allow other than specialist counsels to decide upon the final wording of nuclear liability waiver clauses. It is wise. However, this exposition may be used as guidance for discussions regarding such clauses, prior to submitting a compromise suggestion to both sides' specialist counsels for considerations, comments and perhaps approval.
3. Content
This exposition is structured as follows:
Chapter I The Legal Framework
Chapter II Introduction to the LRO
Chapter III The Operator's Liability
Chapter IV Exceptions to the Operator's Liability
Chapter V The Swedish State's Liability
Chapter VI The Supplier's Liability
Chapter VII Nuclear Liability Waiver Clauses
CHAPTER I
THE LEGAL FRAMEWORK
1. General Overview
Swedish law is within the area of nuclear liability based on the Paris Convention on Third Party Liability in the Field of Nuclear Energy and the Brussels Supplementary Convention, as well as the latest protocols from 2004 amending the said conventions (together the "Conventions").
The reason for the additional protocols from 2004 was Chernobyl. Because of Chernobyl, claims that were not included in the existing definition of "nuclear damage" were made by injured parties, for example loss of turnover, crops, animals, fish, costs of reinstating the environment and loss of an economic interest in enjoying the environment (hotel owners losing income). The disaster in Chernobyl also made it obvious that more financial funds needed to be available to compensate injured parties.3 It was concluded by the contracting states that the Paris Convention needed improvements.
At the same time as the latest protocols from 2004 entered into force on 1 January 2022, the Swedish legislation was updated by a new Act on Liability and Compensation for Radiological Damage (the "LRO"). 4 The LRO replaced the former Nuclear Liability Act from 1968.5. The LRO is supplemented by an ordinance on Liability and Compensation for Radiological Accidents.6
Although this exposition is based upon Swedish law and reference often is made to the LRO, the described situations will generally be the same or similar in other countries that have acceded to the Conventions.7 However, there may of course be differences depending on how the Conventions have been implemented in the national laws and because of each country's principles for contract interpretation etc.
It should be mentioned that there also is another international convention within the area of nuclear liability, the Vienna Convention. It is an alternative to the Conventions.8. For many years, there was no link between the Conventions and the Vienna Convention. Such link was created first after Chernobyl, by the so-called Joint Protocol.9 It has the effect that the Conventions under certain circumstances will apply also to nuclear damage suffered in non-convention countries that have acceded to the Vienna Convention and the Joint Protocol. However, such application of the Conventions in non-convention countries is subject to different pre-conditions which fall outside the scope of this exposition. The same generally applies with respect to non-Swedish injured parties' possibilities to argue that other liability rules than those of the Conventions shall apply.
2. Different Terminologies
The LRO introduced a new terminology for some key expressions in connection with nuclear liability. The expressions "nuclear incident" and "nuclear damage" used in the Conventions were not correspondingly translated to Swedish. Because of this, there is a particular problem when writing in English that initially must be addressed.
The expression "nuclear incident" in the Conventions has been translated to radiologisk olycka in the LRO, which in English corresponds to "radiological accident". Similarly, the expression "nuclear damage" in the Conventions has been translated to radiologisk skada in the LRO, which in English corresponds to "radiological damage". The reason for this deviating translation between the Conventions and the LRO was a desire to align the terminology in the LRO with the terminology in other Swedish legislation.10. No difference in the underlying meaning of these expressions, compared to the meaning of the expressions in the Conventions, was intended.
In continuation, we will use the expressions "radiological accident" and "radiological damage". They shall in this exposition be understood in the same way as radiologisk olycka and radiologisk skada in the LRO.
The deviating translation between the Conventions and the LRO is unfortunate when it comes to nuclear liability waiver clauses in English. When drafted by Swedish lawyers, such clauses will typically use a direct translation of the Swedish terms, i.e. radiological accident and radiological damage. It is also recommendable if the nuclear liability waiver clause is governed by the laws of Sweden. However, those expressions may be unknown to lawyers from other jurisdictions, used to the expressions in the Conventions. For the non-Swedish reader, it shall again be emphasized that no difference in the underlying meaning of the Swedish expressions, compared to "nuclear incident" and "nuclear damage", has been intended by the Swedish legislator.11
From a pure Swedish perspective, it is with the new terminology in the LRO hardly correct to use the title nuclear liability and nuclear liability waiver clauses for this exposition. However, these expressions correspond better to the expressions in the Conventions and are so well established that it would probably cause confusion if others were used.
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Footnotes
1. Lagrådet. The proposal/referral is called: "New nuclear energy for Sweden – a first step". It may be accessed in Swedish at the Swedish Government Offices website: https://www.regeringen.se/rattsliga-dokument/lagradsremiss/2023/06/ny-karnkraft-forsverige--ett-forsta-steg.
2. En särskild utredare. The inquiry is called: "New nuclear energy in Sweden – a second step". It may be accessed in Swedish at the Swedish Government Offices website: https://www.regeringen.se/rattsliga-dokument/kommittedirektiv/2023/11/dir.-2023155.
3. For a further account of the background to the latest protocols, see Third Party Nuclear Liability: The Case of a Supplier in the United Kingdom, Anthony Thomas and Raphael J. Heffron, February 2012, EPRG Working Paper 1205, Cambridge Working Paper in Economics 1207
4. Lag (2010:950) om ansvar och ersättning vid radiologiska olyckor.
5. Atomansvarighetslagen 1968:45.
6. Förordning (2021:1142) om ansvar och ersättning vid radiologiska olyckor.
7. Thirteen countries have acceded to the Conventions, mainly Western European countries. Three more countries have acceded to the Paris Convention but not to the latest protocols from 2004. For a full list of countries which have acceded to the Paris Convention and its additional protocols, see https://www.oecd-nea.org/jcms/pl_31798/paris-convention-latest-status-ofratifications-or-accessions.
8. 33 countries have acceded to the Vienna Convention, mainly Eastern European and Latin American countries.
9. 24 countries have acceded to the Joint Protocol.
10. Mainly Kärntekniklagen and Strålsäkerhetsmyndighetens föreskrifter och allmänna råd om säkerhet i kärntekniska anläggningar.
11. See for example Prop. 2009/10:173 p. 72 and 86.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
