Basis of Liability

A first issue to be addressed is obviously whether the liability is based on either fault (negligence) or strict liability. A strict liability can potentially reach much further than a liability based on negligence. Moreover, there can be many grey zones between fault and strict liability (i.e. a tightened version of fault liability). This is applied in many countries in the case of liability for environmental damage and also corresponds to an international tendency towards introducing stricter liabilities for high-risk activities. In relation to this, the question how the behaviours of the victim and third parties are taken into account and other defences (such as force majeure) also will have to be addressed.

Relationship with Regulation

A second crucial issue determining the scope of liability is the relationship with a regulatory framework. This could be authorizations, licenses or permits or specific conditions contained in those authorizations or simply regulatory prescriptions. Currently, there is no international or EU regime dealing particularly with the liability arising from offshore oil and gas exploration activities, but a large amount of (detailed) regulations already exists on safety standards for the offshore industry. In this respect, the question arises as to whether compliance with a regulatory norm would lead to an exclusion of liability or, vice versa, whether a breach of regulation would lead to liability. For example, is insurance a pre-condition for issuing a license for an offshore facility? As the experience with the Environmental Liability Directive has shown, the relationship with regulation can have an important bearing on the scope of liability. If compliance with a regulatory standard excludes liability, this could seriously limit the scope of liability of the offshore industry, whereas this scope potentially would be much larger to the extent that liability also would remain possible when regulatory standards are complied with. Hence, attention will have to be paid to the question of how the regulation of the offshore industry fits into a consistent integrated system of liability.