The Government intend to extend, to the Isle of Man, the provision for a limit to be set on an operator’s liability to indemnify the Government against claims brought for loss or damage arising from regulated space activity.
Under the Outer Space Act 1986 (the OSA), operators are required to indemnify the UK Government for any claims brought to the Government for damage or loss arising from activities regulated under the OSA.
Before 2015, this indemnity had no limit, meaning that operators were fully liable for any damages their activities caused. This unlimited liability was seen by industry as a commercial disadvantage and a provision was included in the Deregulation Act 2015 to amend the OSA, introducing a limit to the operator’s indemnity.
Extending the provision for a limit to be set to the Isle of Man, would have the effect of creating a contingent liability for the UK Government for amounts above the indemnity limit in respect of licences issued under the OSA as extended to the Isle of Man by way of the Outer Space Act 1986 (Isle of Man) Order 1990.
The OSA was applied to the Isle of Man in 1990 and the Government of the Isle of Man has requested that the indemnity limit in the amended OSA is extended to them, so that operators based on the Isle of Man will not be at a disadvantage in comparison with their UK counterparts.
The Government have agreed to extend the indemnity limit to the Isle of Man on the basis that the current letters of agreement that are in place with the Government of the Isle of Man are to be updated and formally exchanged following Parliament’s approval of this contingent liability. The updated letters will set out that the Isle of Man Government will meet any liability incurred as a result of Isle of Man space activity, above any indemnity limit set in a licence, that is not covered by insurance. However, the letters maintain the assurance that a request for any contribution from the Isle of Man Government will not be for a sum large enough to destabilise the Isle of Man economy.
When a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, it is required practice for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.
As a matter of record, I will be laying a departmental minute today.