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

APPENDIX C
The Provisions of the Act Pertaining to Latent Illness Claims

I.   Introduction and Summary

    It must be emphasized at the outset that Price-Anderson is a system of insurance, indemnity, and limitation on liability, that in its original conception focused on funds to pay claims rather than the rules under which some claims would be paid and others rejected. Since 1966, it has effectively provided some of the rules for determining claims if the nuclear incident is determined by NRC or DOE, as appropriate, to be an ENO. In the case of an ENO, certain statutes of limitations and a number of other important issues and defenses1 must be waived by defendants and their insurers.2

    In sum, claimants must show in the case of an ENO (a) that they have suffered legally cognizable injuries under applicable law, (b) that those injuries were caused by the nuclear incident (not who caused the incident, but rather that the injuries arose out of the instrumentality that was the subject of NRC or DOE Price-Anderson coverage, such as a licensed reactor or transportation of radioactive material from the reactor to another location), and (c) the nature and amount of damages. All of those elements are governed by applicable state law, not the Act.

    The Price-Anderson provisions of the Atomic Energy Act contemplate that it may be necessary to make special provision for latent illnesses in the event that the accident is a very large one and there will likely be a significant drain on the funds available from insurance3 through payment of current claims. These provisions and their legislative history are discussed below in detail; the following am the major points:

    • No payment of insurance proceeds (or indemnity, where appropriate) in excess of 15 percent of the available fund may be made, in a case where the court having jurisdiction has determined that claims am likely to exceed the total fund, unless the court has found that such payment would be in accordance with (or would not prejudice the adoption of) a plan of distribution approved by the court (Subsection 170[o]).

    • Such a plan of distribution must contain an allocation for any latent injury (illness) claims (Subsection 170(o][C]).

    • Any Presidential Compensation plan submitted to Congress in the event of a judicial determination of probable insufficiency of funds to cover all claims, as above, must likewise contain an allocation for latent illness claims (Subsection 170[i][2]).

    • Congress has long recognized that no allocation formula can be legislated in advance, and has chosen instead to vest considerable discretion in the court that has jurisdiction over claims arising out of the nuclear incident to adopt a plan that would provide for latent illness claims (S. Rep. 650, 89th Cong., 1st sess. pp. 16-17).

    • Congress has also long recognized the special problems of proving latent illness claims and has addressed the statute of limitations problem. As to the difficulties of proving causation of latent illnesses, its response prior to commissioning this study had been to fund biomedical research in hopes that more would be learned about cancer induction (S. Rep. 650, 89th Cong., I st sess. pp. 20-21).

    • The assumption underlying the provisions of present law is that there will be a fixed fund, some of which must be allocated for latent illness claims. The 1988 amendments, however, contemplate further action by Congress, if needed, including appropriations, “to provide full and prompt compensation to the public for all public liability claims” (Subsection 170[e][2]).

II.   Detailed Discussion

    As previously stated, the Act recognizes special provisions for latent illnesses may be necessary in the event of a major accident and that there will likely be a significant drain on the funds because of payment of current claims. Thus, Subsection 170(o) provides that, if the federal district court having jurisdiction finds dig public liability for a single nuclear incident may exceed the applicable limit of liability in Subsection 170(e), payments in excess of 15 percent of that limit may not be made unless the court finds:

    that such payments are or will be in accordance with a plan of distribution which has been approved by the court or such payments are not likely to prejudice the subsequent adoption and implementation of [such a plan] (emphasis added).

    Latent illnesses are among the matters to be dealt with in any such plan of distribution. Thus, Subparagraph 170(o)(C), which provides that proposals for plans of distribution shall be submitted by the NRC or DOE as appropriate, and may be submitted by indemnitors or other interested persons, states that such a plan shall include:

    an allocation of appropriate amounts for personal injury claims, property damage claims, and possible latent injury claims which may not be discovered until a later time (emphasis added).

    Latent illnesses are also referred to in connection with the Presidential Compensation Plan to be submitted to Congress in accordance with Subsection 170(i)(2) in the event that the court having jurisdiction makes the above referenced determination under Subsection 170(o)that public liability may exceed the Subsection 170(e)limit. Subsection 170(i)(2)(C) requires the President to submit one or more compensation plans that shall include, inter alia,

    recommendations that funds be allocated or set aside forthe payment of claims that may arise as a result of latent injuries that may not be discovered until a later date.

    In the original 1957 Price-Anderson legislation, the provisions now found (in considerably amplified form) in Subsection 170(o) were contained, along with the liability limit, in Subsection 170(e). That section provided, in pertinent part:

    The Commission or any person indemnified may apply to the appropriate district court of the United States having jurisdiction in bankruptcy matters over the location of the nuclear incident and upon a showing that the public liability from a single nuclear incident will probably exceed the limit of liability imposed by this section, shall be entitled to such orders as may be appropriate ... including... an order setting aside a part of the funds available for possible latent injuries not discovered until a later time.4

    The 1957 legislative history indicates only the following:

    Since it is possible that there may be damages which are not discovered for a period of years, the court is authorized to set aside a portion of the funds available to cover such later claims on the basis of such scientific evidence as may be available to it.5

    The 1966 “waivers of defenses” amendments to Price-Anderson moved the provisions regarding claims management from Subsection 170(e) to a new Subsection 170(o) and expanded them. The Joint Committee explained the expanded provisions in its report, excerpts from which pertinent to latent illness claims are set out below.

    During the committee's 1965 hearings concerning the Price-Anderson Act, questions were raised relative to the desirability, in the administration of the insurance and indemnity fund made available by the act, of making appropriate allocations...for possible personal injuries of delayed manifestation. Concern was expressed in this connection that absent such a system of allocation a catastrophic nuclear incident involving damages approaching or in excess of the act's limit of liability might result in disproportionate sharing of the available funds and, possibly, exhaustion of the total fund prior to emergence of possible latent injuries in some victims.

    In the year that has ensued since the 1965 hearings, additional study has been given to these problems. It is evident that any plan of distribution must be responsive to the needs of the particular situation, and that therefore a specific legislative plan in advance of a large-scale nuclear incident is not feasible. The best solution to the problem, it appears, is to repose considerable discretion in the judiciary, with appropriate modification of the act to assure that funds disbursed in the event of a serious nuclear incident are distributed only in accordance with a court-approved plan of distribution.

    The plan submitted to the court must include an allocation of appropriate amounts for... possible latent injury claims which may not be discovered until a later time (emphasis added) .6

    The Joint Committee was evidently aware of both latency periods and problems ofproof of causation. As to the first, it explained that it had adopted a waiver of statutes of limitations shorter than 3 years from discovery or 10 years from the event as an achievable step, being aware that this represented an improvement over some state laws but was not sufficient to deal with latency periods of 30 years or longer.7 As to difficulties of proof of causation, the Joint Committee declined to recommend legislation, saying:

    The committee continues to recognize that the problem of processing radiation injury cases, including the determinationof whether a particular biological damage has been caused by a particular exposure to radiation, remains a substantial one. Although this [waivers of defenses] bill can eliminate some of the major legal obstacles that might confront a claimant in the event of a nuclear incident, the bill does not purport to cure the problems of proving causal relationships between radiation exposure arising from a nuclear incident — whether or not it is an 'extraordinary nuclear occurrence' — and alleged radiation injury. In many cases, the proof of such relationship can be exceedingly difficult, if not impossible.8

    The Joint Committee went on to state that it supported continued study by the government of the biological effects of radiation, that the results of such efforts should eventually help provide the basic scientific information needed to assist in establishing the validity of claims based upon alleged radiation injury, and that it would continue to authorize substantial funding for biomedical research.9

    The only changes made to Subsection 170(o) in the 1975 amendments to Price-Anderson were with respect to priorities, and do not explicitly address latent illness claims. An excerpt from the 1975 legislative history regarding priorities is set forth in Appendix D.

    The only new reference to latent illness claims in the 1988 amendments is in regard to the report of this Commission, as set forth above; there is no illuminating legislative history in connection therewith.

    The assumption underlying all of the above-quoted provisions of present law is that there will be a fixed fund, some of which must be allocated for latent illness claims. The 1988 amendments, however, contemplate further funding, if needed:

    In the event of a nuclear incident involving damages in excess of the amount of aggregate public liability under [paragraph 170(c)(1)], the Congress will thoroughly review the particular incident in accordance with the procedures set forth in section 170(i). and will in accordance with such procedures, take whatever action is determined to be necessary (including approval of appropriate compensation plans and appropriation of funds) to provide full and prompt compensation to the public for all public liability claims resulting from a disaster of such magnitude (Subsection 170[e][2]).


Footnotes

  1. In brief, these involve any issue or defense as to conduct of the claimant (e.g., contributory negligence, assumption of the risk. comparative negligence), any issue or defense as to the fault of persons indemnified (the NRC licensee, DOE contractor. or other person liable), any issue or defense as to charitable or governmental immunity, and, in the 1966 version of the law, any issue or defense as to a statute of limitations if suit is instituted within 3 years from the date on which the claimant fast knew, or reasonably could have known. of injury or damage and the cause thereof. The 1975 amendments extended the 10-year limit on the waiver to 20 years; the 1988 amendments eliminated the outside limit altogether, so that what must be waived is a statute of limitations more restrictive than a 3-year discovery rule. See Atomic Energy Act of 1954, as amended [hereinafter Act] § 170(n)(1).

  2. See Atomic Energy Act of 1954, as amended [hereinafter, Act) § 11(j) and 170(n)(1), 42 U.S.C. §§ 2014 (i) and 2210 (n)(1).

  3. Or, in the case of DOE contractors or certain smaller NRC licensees, government indemnity.

  4. P. L. 85-256 § 4, adding, inter alia, §§ 170(e).

  5. Report of the Congressional Joint Committee on Atomic Energy. H. Rep. 435, 85th Cong., 1st sess, reprinted in Selected Materials on Atomic Energy Indemnity and Insurance Legislation, Joint Committee on Atomic Energy, U. S. Congress (March. 1974) 234 at 252.

  6. Extending and Amending the Price-Anderson Indemnity Provisions of the Atomic Energy Act of 1954, as Amended, S. Rep. 650, 89th Cong., 1st sess., pp 16-17.

  7. Ibid., pp. 20-21. The outside limit on the statute of limitations waiver was extended from 10 to 20 years in the 1975 amendments to Price-Anderson, and eliminated in the 1988 amendments, leaving the 3-year discovery provision.

  8. Ibid, P. 21.

  9. Ibid, P. 22.


Appendix B « Index » Appendix D