Posted Apr 04, 2011 10:30 am CDT
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?