Report to the Congress from the Presidential Commission on Catastrophic Nuclear Accidents

CONCLUSIONS AND RECOMMENDATIONS

I.   Conclusions

    On the basis of its deliberations, the Commission has reached the following conclusions with respect to a catastrophic nuclear accident.

    Conclusion No. 1  The Commission believes that Congress' commitment to “full compensation” under the Price-Anderson Act means that the overarching goal of any plan recommended by the Commission should be compensating for the losses caused by a nuclear accident or a precautionary evacuation. The Commission has concluded that the constraints of a plan that seeks to achieve this goal by applying common law principles of tort in traditional methods of litigation would result in the outright denial of recovery to many deserving claimants and would make recovery for others a difficult and protracted process. The Commission has, therefore, chosen to recommend a plan that is a departure from conventionally litigated actions and that modifies the standards of recovery under a pure tort scheme. Under the Commission Is recommended plan, the goal of full compensation is achieved by providing greater relief to a greater number of people, more easily, more quickly, and more consistently than would otherwise be available.

      The Commission views the goals of its proposed system to be compensatory in nature. It envisions the Price-Anderson system as a vast insurance program, prospectively insuring all potential claimants from a possible large accident at a nuclear facility, rather than as an extension of the common law tort system.

      The Commission believes that some of the traditional remedies in tort law that have served regulatory, deterrent, and retributive ends rather than compensation need not be available here. On the other hand, the Commission believes the claimants should benefit from the more certain rights to compensatory recovery in exchange for the speculative rights to “full” recovery in a traditional tort context.

      For certain types of claims for pain and suffering, increased risk of disease, emotional distress, and wrongful death, techniques have been developed in other mass tort litigation or advocated by legal scholars and practitioners for coping with mass torts that would provide benefits that are fair, consistent, equitable, and show reasonable deference to fiscal realities. The Commission's recommendations draw on these techniques.

    Conclusion No. 2  Criteria should be established for activating a system to be put in effect for a catastrophic nuclear accident, and, once it is triggered, the system should apply to all claims relating to that accident. The point for triggering the system should be established before an accident.

      There is virtually no legislative guidance relating to the size of the nuclear accident that should be considered by the Commission in fashioning its recommendations.

      A literal reading of the words “catastrophic” used in Section 170(1) of the Act and reference to an accident that exceeds the aggregate public liability could suggest that the Commission's recommended system would apply only above the aggregate liability figure, currently $7.3 billion. Consequently, the Price-Anderson system as it stands now would apply for all other claims for the same accident up to the aggregate liability figure. However, the Commission does not believe that bifurcation of claims for the same accident would be feasible or equitable.

    Conclusion No. 3  A system should be designed such that, in the event of a major nuclear accident, Price-Anderson funds would be used to resolve and pay claims fairly, promptly, and efficiently.

      Such a system would fully reimburse pecuniary losses, pay claims for latent illnesses, compensate wrongful death and pain and suffering on a scheduled basis, compensate increased risk of future illness through participation in a medical monitoring system, compensate emotional distress through emotional distress counseling, compensate for legal costs, and prohibit the payment of punitive damages.

    Conclusion No. 4  A system to compensate losses in the event of a major nuclear accident should be placed within a judicial framework but should utilize the efficiency and cost-containing features of administrative processes, including provision for the use of scientific and medical expertise.

      Such a system would affirm the public's trust in the fundamental fairness of the judicial process while ensuring that the goals of compensation are not undermined by slow and cumbersome legal procedures. While a compensation commission or other administrative agency would have several advantages, the Commission felt that the benefits of a court-supervised system outweighed those advantages.

    Conclusion No. 5  On the basis of present knowledge, cancers that could be radiogenic cannot be distinguished from those that occur spontaneously or are due to exposures to other carcinogens. A related problem is reconstructing the dose actually received long after the event. These problems should not bar recovery for latent illnesses.

      To process the cancer claims, some mechanism will be needed for attributing the causation based on readily computed factors, such as level of exposure, age, sex, the type of cancer, and the latency period. The best technique currently available for resolving causation in fact issues appears to be the so-called probability of causation (PC) approach. By PC, the Commission means the assignment of group risk to individual cancers that actually appear. Better techniques may be developed in the future; the Commission assumes that a panel of scientific advisors will avail itself of the best information and methodology available at the time.

    Conclusion No. 6  In order to effectuate the recommendations of the Commission, statutory implementation is desirable to ensure that the best possible system for fair compensation is in place in the event of a major nuclear accident.

      The system the Commission is proposing would require statutory enactment to carry out fully its intentions. Based on its own experience over the past year, the Commission believes that thoughtful review of these substantive and procedural issues can best be conducted in advance. Furthermore, if such legislation were enacted, some important steps in implementation could proceed.

II.   Recommendations

    In view of the conclusions reached by the Commission, it recommends that a system be established that will compensate losses promptly, fairly, and equitably. The system should ensure that pecuniary losses be reimbursed. Nonpecuniary losses should be compensated using techniques that provide fair benefits and that assure prompt and equitable treatment.

    Recommendation No. 1  The Commission recommends that the appropriate “trigger” for application of its proposed system should be when the court finds there is a reasonable likelihood of claims exceeding the first level of insurance and there is a multiplicity of claimants. The provisions presently in the Price-Anderson Act with respect to a determination of an extraordinary nuclear occurrence should be amended in accordance with this recommendation or whatever “trigger” is ultimately enacted.

    If the court finds that the basic level of insurance will likely be exceeded and there is a multiplicity of claimants, there is a logical point at which the accident can be considered a mass tort, and all claims, both above and within the first tier of insurance, should be treated equally under the new system. When claims exceed the first tier, the nuclear insurance pools will start to pay claims from funds drawn from the deferred premiums paid by all nuclear utilities. At this point, even if the injury and damage effects of the accident are limited to one state, locality, or even one utility service area, the financing effects would have national ramifications. The collection of funds to pay up to $7.3 billion in claims could continue under the court's supervision. In addition, the nuclear insurance pools can continue to provide the claim settlement activities contemplated for them in the Act.

    Recommendation No. 2  The Commission recommends that claims be resolved through a judicial process containing administrative features designed to speed the resolution of cases.

    A.   Jurisdiction; Applicable Law.

    • Jurisdiction of all claims should be in the federal courts. Venue should be in a single federal court, chosen by the Multidistrict Litigation Panel.

    • Claims arising out of the accident should give rise to a federal right of action to the exclusion of all state law rights and remedies.

    • The federal right of action and all issues arising out of the pursuit of or defense against such asserted. right should be governed by the terms of the statute, supplemented by federal common law.

    • Waivers of defenses should be triggered by the criteria triggering the plan.

    • Provision should be made for compulsory intervention by claimants who are not yet parties.

    • Actions should, from the first dollar of liability, be conceptualized as against the insurance fund, with defense provided by the nuclear insurance pools. With respect to accidents in which federal money is a source of compensation, the United States should have the option of assuming the defense of the fund from the first dollar of liability.

    B.   Initial Responsibilities.

    The distribution scheme, including both emergency and final payments, should be coordinated by the central court. Registration and blood sampling requirements should be combined with filing and handled within the context of the judicial proceeding.

    • The Commission assumes that emergency distributions will continue while the formal claim resolution process gets under way and, as also currently provided by the statute, that receipt of emergency payment by a claimant will in no way constitute a waiver by the claimant of any right to assert claims under the Act.

    • The central court should supervise the emergency payment features of Price-Anderson, including registration activities.

    • The court should select a Panel of Scientific Advisors to consider generic issues and advise the court and its special masters (including the Claim Master) on the matters indicated below.

    • The court, drawing upon its powers to appoint special masters, should appoint such special masters to oversee the process of administering the registry, including dealing with the nuclear insurance pools regarding the funding of medical monitoring, etc.

    • Civil actions may be commenced by filing a claim at the registry, and the registry should assume the duty of directing service of process to inform the defendants of the pendency of individual actions. All individuals and property owners in the affected area should be notified by every practicable means that registration is a precondition to the maintenance of a claim for compensation.

    C.   Generic Determinations.

    • The statute should provide for the generic determination of issues common to the claimants. All generic determinations should be made by the federal court without a jury.

    • With regard to each subclass affected by generic determinations, the court should appoint counsel for absentee claimants, including those who may have sustained latent illnesses. Claimants can choose to be represented by their own attorneys or to proceed collectively through the court-assisted selection of a management committee.

    • Generic determinations should include the following:

      • Establishing a schedule of compensatory awards for nonpecuniary injuries, if one has not been determined by Congress.

      • Determining proximate cause; deciding whether, with respect to a given category of claims, the alleged harm is too hypothetical or speculative or the causal relation between the accident and that harm is too attenuated to require compensation.

      • Resolving factual disputes that are scientific or medical in character. Two examples are confirmation of the initial determination of the level of exposure sufficient to justify provision for medical monitoring, and establishment of the level of contamination deemed to create an unacceptable risk precluding reoccupation of evacuated property. These issues should be decided with the aid of the Panel of Scientific Advisors.

    • The court's final determinations should be based on the best available scientific/ medical knowledge, as tempered by value judgments which err on the side of public compensation. The court, with the aid of the Panel of Scientific Advisors, should, in each instance, specify whether a generic determination represents the clear understanding of the scientific community and give it conclusive effect in later proceedings unless reopened, or is based upon a lesser consensus and give it rebuttable effect in the later phases of the litigation. When the scientific community is in equipoise, the court should make rebuttable determinations on policy grounds that err on the side of public compensation.

    D.   Reconsideration.

    • There should be a right to an immediate appeal of the generic determinations to the court of appeals embracing the district where the central court is located, and expedited consideration in the Supreme Court.

    • Generic determinations should be subject to reconsideration by the central court on the basis of substantial new evidence or other good cause.

    E.   Individualized Treatment.

    Individual claims should be resolved on a multi-tier model as follows:

    Informal Proceedings.

    • The court should encourage settlement offers. Acceptance of such offers, which can involve a periodic payment schedule, would end the case with respect to submitted claims. All settlements should be registered with the court.

    • Claimants who fail to settle should be required to utilize one of the following dispute-resolution options, which will be administered by court appointed masters:

      • Option 1.  For claimants with personal, business, or property losses, the court should set modest fixed awards, which would be available to a claimant by simply filing an affidavit attesting with particularity to the loss for which compensation is sought

      • Option 2.  The court should appoint a Claim Master to evaluate claims and calculate individualized awards in accordance with the recommendations in Chapters 3 and 4.

    • Acceptance of an informal award would end the dispute with respect to the claims upon which the award was based. Acceptance would not, however, preclude claims based on illnesses manifested after acceptance.

    Formal Proceedings.

    • The court should appoint arbitration panels, supported out of Price-Anderson funds, and make binding arbitration available to all litigants.

      • Both claimants and defendants should have the option of choosing binding arbitration.

      • In the event that a defendant rejected the informal award and demanded binding arbitration, the claimant could instead demand plenary adjudication, including a jury trial.

    • Dissatisfied claimants could demand plenary adjudication, including the right to a trial by jury. However, Congress should provide that defendant waive the right to jury trials.

      • These adjudications should take place in the central court

      • These proceedings should be governed by federal statutory and common law, and by the determinations deemed conclusive in the earlier phase. At this stage, however, rebuttable determinations could be contested.

      • To preserve the objectivity of decision makers, the amounts available to claimants under the informal procedures should not be introduced into evidence. This amount should, however, be considered in determining the award of legal costs.

    • Claimants who choose adjudication but do not better the award available under the informal procedures should be required to shoulder court costs, their own counsel fees, and their other costs, including those for witnesses, incurred in connection with the plenary adjudication. Other legal expenses, including the payment of experts, should be made from the fund.

    • Payments from collateral sources should not be used to offset recovery except when a claimant has demanded plenary adjudication. In no case, however, should proceeds from life insurance policies be used to offset recovery.

    • Federal Rules of Civil Procedure 11, 26(g), and 37(c), which impose sanctions for frivolous pleadings, unreasonable discovery, and unreasonable failure to narrow triable issues, should also be operative.

    Recommendation No. 3  The Commission recommends compensation for those losses caused by a nuclear accident or a precautionary evacuation on the following basis:

    • Pecuniary losses caused by a nuclear accident or evacuation should be compensated dollar-for-dollar.

    • Claims for nonpecuniary losses should be compensated as follows:

      • Claims for wrongful death should be uniformly compensated at a predetermined amount.

      • Claims for pain and suffering when arising in connection with acute radiation syndrome and other physical injury should be compensated on a scheduled basis.

      • Claims that exposure has increased the risk of future illness should be compensated when coupled with a certain threshold level of exposure. Compensation should take the form of participation in a medical monitoring program. Subsequently diagnosed cancer would be compensated as described in Recommendation 4 and in Chapter 4.

      • Claims that evacuation or exposure has caused emotional distress should be compensated. Compensation should take the form of emotional distress counseling. However, claims such as lost wages or medical expenses associated with emotional distress should be compensated as pecuniary losses, subject to claimants establishing clear causal connections between distress and the nuclear accident.

      • An allowance for loss of community in a fixed amount should be provided to those who require permanent relocation. This allowance should be provided in addition to pecuniary losses.

    • All claims for latent health effects, pecuniary as well as nonpecuniary, should be compensated as described in Recommendation 4, below.

    • Claim resolution costs should be separately compensated subject to review and limitation to a reasonable amount by the court or specially appointed cost master.

    • Payments from collateral sources should not be used to offset recovery except when a claimant has demanded plenary adjudication. In no case, however, should proceeds from life insurance policies be used to offset recovery.

    • The insurance pools will make emergency payments for claims of immediate needs. Claims resolved under the proposed plan, therefore, should be heard in the order in which they are received. A hardship exception should exist, however, to permit the earlier resolution of claims where urgent needs require the more immediate supplementation of emergency payments.

    • Compensable pecuniary losses should be paid on a dollar-for-dollar basis and other compensable losses on a scheduled basis, as previously recommended. Awards would ordinarily be made on a lump-sum basis, but claimants should be permitted the choice of receiving either a lump sum, discounted to present value where future injury is a component of the loss, or an annuity that would provide a continuing series of periodic payments.

    Recommendation No. 4  The Commission recommends that pecuniary and nonpecuniary claims arising from latent health effects be compensated.

      Latent illness claims should be paid using a proxy for proof of a causal relation between the illness for which a claim is made and the radiation exposure resulting from the accident. Under this plan, those who exhibit a strong association between the radiation exposure and a particular illness would be paid full awards while those with weaker associations would be paid smaller awards. The most appropriate proxy for causation available at the time should be used. Presently, the best system appears to be probability of causation (PC) methodology.

      Therefore, the Commission recommends that a system be established which pays the full award where PC methodology indicates that it is more likely than not that a particular illness occurred as a result of the accident. Further, it is recommended that a level be established on the other end of the scale where it is extremely unlikely that an illness results from the accident, for which no payment is made. For those whose probability falls between the above two limits, there should be some level of proportional recovery related to the likelihood of causation. However, claimants who wish to rely on traditional notions of tort causation may submit their cases to binding arbitration or adjudication.

      While the Commission recommends this system for paying latent illness claims, it also recognizes that, in this situation, Congress may feel it necessary to pay for any cancers or other illnesses following a major nuclear accident because exposed persons will believe their cancers were caused by the event whether, in fact, they were or were not.


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