Business / Legal Working Group Outbrief

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Business / Legal Working Group OutbriefChris Kunstadter (Chair) & Russ McMurry (Vice Chair)


BLWG agenda topics

MPL methodology review GSO and NGSO forecasts Waivers for many payloads and other Part 440 Mods Development of a legal framework for private

exploitation and utilization of space resources Long-term extension of third-party risk-sharing regime Strengthening of informed consent protection from

unrestricted second-party litigation Inclusion of spaceflight participants in third-party

indemnification NASA termination liability

2/19


MPL methodology review (1/2)

Telcon Jan 25, 2013 – 50+ participants Recommendations for organizations to perform

MPL review ACTA White Sands Research and Development Various “cat” modelers – catastrophe risk

analysis for the insurance industry AIR, Eqecat, RMS, etc.

Recommendations forwarded to FAA AST

3/19


MPL methodology review (2/2)

FINDING: COMSTAC finds that FAA AST’s assigned task has been addressed, and remains ready to support further work on the MPL methodology review.

4/19


GSO and NGSO forecasts (1/2)

Forecasts completed and ready for issuance Forecasts show strong near-term growth in

NGSO launch activity and steady level of GSO launch activity

Realization factors temper optimistic forecasts; but expanding applications and markets in communications, earth observation, technology demonstration, and human spaceflight drive future growth

Forecasts will be available shortly on FAA AST web site

5/19


GSO and NGSO forecasts (2/2)

FINDING: COMSTAC finds that the annual GSO and NGSO reports are important resources, not just for FAA AST but also for industry and other government agencies. These reports are extensively used for planning and business development throughout the space industry, and should continue to be produced annually.

6/19


Waivers for many payloads and other Part 440 Mods (1/2) FAA AST requested COMSTAC’s views on customer

flow-down: Require licensee to sign cross-waivers only with

customers that have directly contracted with the licensee. A customer of a customer contracting with a licensee

would sign cross-waiver only with the original customer, not all launch participants

A “second-tier” customer would still have to agree to waive claims against all launch participants, and

The original customer would have to indemnify other launch participants if it failed to obtain such a waiver from the “second-tier” customers

7/19


Waivers for many payloads and other Part 440 Mods (2/2) “Clean-up” issues

Third-party beneficiaries Cross-waiver with no customer

FINDING: COMSTAC finds that FAA AST’s work on (a) the customer flowdown issue, pending clarification of the relationships and potential interactions of contractors, customers, and others (e.g., aggregators); and (b) the “clean-up” issues should be pursued.

8/19


Develop a legal framework for private utilization of space resources (1/2) Appropriation Responsibility Ownership Property rights Treaty applicability Commercial vs commercial Licensing Intersection of law, politics and enlightened self-

interest Priority is for interested parties to co-operate

9/19


Develop a legal framework for private utilization of space resources (2/2) RECOMMENDATION: COMSTAC

recommends that FAA AST support efforts in Congress and through the Department of State to confirm the right of private sector companies to enjoy the benefits of resources extracted from the surface or subsurface of the Moon and other celestial bodies, subject to appropriate regulation supervision by a relevant U.S. government entity such as FAA AST.

10/19


Long-term extension of third partyrisk-sharing regime (1/2) FINDING: COMSTAC finds that, under the

current U.S. launch indemnification regime, licensees are required to protect the U.S. government from legal liability up to the maximum probable loss (MPL), at no direct cost to the government, with the expectation that the government will continue to be authorized to seek an appropriation to pay certain excess claims above the MPL, on behalf of all launch participants.

11/19


Long-term extension of third partyrisk-sharing regime (2/2) RECOMMENDATION: COMSTAC

recommends that FAA AST urge Congress to permanently extend the current U.S. launch indemnification regime because it protects the U.S. government from substantial third-party liability claims up to the MPL, at no direct cost to taxpayers.

12/19


Strengthening of informed consent protection from unrestricted second-party litigation (1/4) OBSERVATION: COMSTAC observes that,

while the Commercial Space Launch Act requires that licensees obtain informed consent from their spaceflight participant customers, it is silent on the issue of does not preclude potential claims from participants and their heirs and estates in the event of a flight incident or accident.

13/19


Strengthening of informed consent protection from unrestricted second-party litigation (2/4) FINDING: COMSTAC finds that, to encourage

the successful growth of the commercial space flight industry, operators, manufacturers, suppliers, and other contractors, should enjoy a predictable and consistent legal environment where they can be held accountable for deliberate malfeasance or gross negligence, but not for the inherent risks associated with human spaceflight.

14/19


Strengthening of informed consent protection from unrestricted second-party litigation (3/4) OBSERVATION: COMSTAC observes that

commercial spaceflight activities legally implicate the federal government because the U.S. is a signatory to international treaties making nation-states liable for certain losses arising from space activities of non-governmental entities.

15/19


Strengthening of informed consent protection from unrestricted second-party litigation (4/4) FINDING: COMSTAC finds that cross-waivers

of liability among all parties on the licensee side of the launch activity should be required, and Federal courts should decide legal cases regarding any element of the federal license, including the legal validity of any waivers of claims signed by spaceflight participants, after being fully informed as to the risks of the spaceflight.

16/19


Inclusion of spaceflight participants in third-party indemnification RECOMMENDATION: COMSTAC

recommends that FAA AST work towards modifying CSLA language to specifically include spaceflight participants in third-party indemnification. Spaceflight participants are explicitly excluded from Federal indemnification, and not listed in law as a party to be protected by the licensee’s insurance.

17/19


NASA termination liability

RECOMMENDATION: COMSTAC recommends that FAA AST support termination liability reform at NASA in order to protect commercial and NASA programs from being exposed to overly burdensome termination liability costs. Specifically, a reasonable ceiling should be set on termination liability assessments that reflects historic programmatic cancellation rates at NASA. [WITHDRAWN]

18/19


Thank you!

Christopher T.W. KunstadterSenior Vice PresidentXL Insurance+1 [email protected]

19/19

Business / Legal Working Group Outbrief

Documents

xl group plc companies

world gogso

world gompl methodology

world go1may

world goyellowr

world gowaivers

ngso launch activity

ngso reports