The federal government has introduced Bill C-63, An Act to Amend the Nuclear Liability Act (Bill C-63). There has been some confusion in the public domain as to whether the proposed legislation introduces a new exception to the absolute liability of a nuclear operator upon the occurrence of a nuclear incident. In particular, the confusion revolves around an interpretation that gross negligence by suppliers of nuclear goods and services will no longer be protected from liability under Bill C-63.

Section 8(1) of Bill C-63 provides: "An operator - and no person other than an operator - is liable for damage caused, within Canada or in the exclusive economic zone of Canada, by [a nuclear incident]". This is consistent with Section 11 of the Nuclear Liability Act (Canada) (NLA) which currently provides: "Except as otherwise provided by or pursuant to this Act, no person is liable for any injury or damage attributable to a breach of duty imposed on an operator by this Act".

The allocation of nuclear liability between operators and other parties (including suppliers) is further dealt with in Sections 9 and 12 in Bill C-63 which state, respectively: "The liability of an operator for damage caused by a nuclear incident is absolute"; and "No operator has a right of recourse against any person, other than an individual described in Section 11 [see below], in respect of damage caused by a nuclear incident." Similar provisions are contained in Sections 4 and 10 of the NLA.

The confusion may stem from a new provision in Section 11 of Bill C-63 : "an operator is not liable for damage suffered by an individual if the nuclear incident that caused the damage was wholly or partly caused by an act or omission that the individual committed ... [recklessly and with the knowledge that injury or damage would probably result]". [Emphasis added.] The full text of Section 11 includes an additional exception to an operator's absolute liability where the damage is " ... committed with intent to cause injury or damage ... ". But for the addition of the highlighted clause, Section 11 is substantially similar to the current provisions in Section 8 of the NLA.

An analysis if Section 11 of Bill C-63 does not support the conclusion that acts of gross negligence by suppliers of nuclear goods and services will no longer be protected from liability under the proposed amending legislation. The reckless conduct and knowledge components in Section 11 are well understood concepts in criminal law. They are the basis of the necessary mens rea (i.e. guilty mind) required for conviction in most criminal charges. Such analogy is consistent with the statutory language of "intent to cause injury or damage" which is part of this Section. Section 11 of Bill C-63 (and its counterpart in the NLA, Section 8) do not relieve an operator from its absolute liability for damage caused by a nuclear incident in circumstances contemplated by Section 11; it merely exempts the operator from liability for damages suffered by a claimant who commits an act of sabotage.

Under Canadian tort law, there is no readily identifiable or understood distinction between "negligence" and "gross negligence". "Gross negligence" is not a term that is in regular use in Canadian courts. Particularly egregious conduct of a tortfeasor may affect a court's decision on liability and damages, but it will not bring such conduct under a distinct head of liability or damages known as "gross negligence". In any event, neither "negligence" nor "gross negligence" is synonymous with the reckless conduct and knowledge elements of Section 11. Supplier negligence in the delivery of goods or services for use in a nuclear installation falls short of the concept of intent associated with damage caused by reckless indifference.

It is also interesting to compare the reference to conduct of "an individual" in Section 11 of Bill C-63 with its counterpart in Section 8 of the NLA, that is, conduct of "a person". The term "person" is undefined and used in the NLA as a reference to both individuals and a broader group of entities including corporations. This variable use is the basis of negotiations in nuclear supply contracts for contractual indemnification by a nuclear operator for nuclear damage resulting from sabotage by a rogue employee. The use of "an individual" in Section 11 of Bill C-63 arguably provides nuclear suppliers with additional statutory protection from this liability.