Tort Law

Will GE Be Liable in Design of Japanese Nuclear Plants? Law Prof Questions Traditional Wisdom

The traditional wisdom is that General Electric won’t face liability for its design of the containment systems used at the 1970s-era nuclear reactors damaged in the earthquake and tsunami in Japan.

GE may be protected by Japanese law that limits liability to the plant operator, which is obligated to carry $120 billion in insurance for each nuclear site, Reuters reports. And if an accident is caused by “grave natural disaster of an exceptional character,” the government is completely liable.

A law professor at the University of California at Davis is less certain that GE will be shielded from liability. Writing in an op-ed for the Los Angeles Times, law professor Anupam Chander points to a New York Times article chronicling concerns about the Mark 1 containment system designed by GE and used at the damaged Japanese plants. (GE says it has a track record of reliability and it met international requirements at the time.)

Chander identifies three issues that could challenge the traditional wisdom:

• What do the contracts governing design and construction of the plants say about the governing law? The agreements might have looked to U.S. rather than Japanese law.

• Will public pressure lead GE to set up a voluntary fund, as BP did after the Gulf oil spill?

• Will Japanese courts enforce liability limits if there is any proof of gross negligence or willful misconduct? What if there were a design defect and GE failed to disclose it?

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