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UM E-Theses Collection (澳門大學電子學位論文庫)

Title

Recoverability of pure economic loss in ship-based oil pollution in China

English Abstract

Abstract This paper is talking about the recoverability of pure economic loss caused by ship-based oil pollution in tort in China. Comparing with the common law system, the problems of recoverability of pure economic loss in ship-based oil pollution in China are analyzed, and the solutions are provided. As Banakas noted, managerial revolution has given some social influence to financial interests of ordinary citizens as well as to the 'quasi-proprietary' interest. Since pure economic loss appeared, its recovery is hardly governed by any common principles within one legal system. As a complicated problem, recovery of pure economic loss has attracted lots of concerns from society and has caught high scholarly attentions in many legal systems. Inevitably, the nature of pure economic loss determines that some controversial problems exist in the recoverability of pure economic loss. Generally speaking, in the literature of law, pure economic loss is defined as a loss without any connection to personal injuries or physical damages, which is a solely financial or pecuniary loss. In many legal systems, the problems of recoverability of pure economic loss include 'floodgates' argument, difficulties to prove, high amounts of payments, unequal judicial resources and etc. In most cases, with policy consideration, the courts prefer to prevent pure economic loss from recoverability. With the development of society, more and more cases of allowing the recovery of pure economic loss, which are contrary to general rule of barring them in the common law system, are found in common law system. In China, recovery of pure economic loss is also a difficult legal issue to be dealt with the court, and the recoverability of pure economic loss in ship-based oil pollution, which is one of the specific issues concerning the recovery of pure economic loss, has also arisen. In 2010, China was the world second crude oil importer who imported 234.6 million tons of crude oil in total. The huge quantity of oil transportation alone has brought potential threats to marine environment in Chinese waters. The fact that 90% of imported oil is transported by tankers indicates that the recoverability of pure economic loss in ship-based oil pollution is an inevitable problem in Chinese legal law. The attitude of China towards the recoverability of pure economic loss in ship-based oil pollution is positive in general. However, the law is lagging behind in providing adequate measures and remedies. The establishment of liability, scope of compensation and limits of liability are the core legal problems affecting the recoverability of pure economic loss in ship-based oil pollution. The problem of recoverability of pure economic loss in ship-based oil pollution has to be solved in Chinese laws. In order to seek legal protection for pure economic loss in ship-based oil pollution, we start the research with civil liability for ship-based oil pollution. Toft Liability Law of the People's Republic of China has given a strict liability for environmental torts. The International Conventions on Civil Liability for Oil Pollution Damage (the CLC Conventions) give the strict liability for ship-based oil pollution as well. As a member state of both the CLC 1969 and the CLC 1992, simultaneously, China is bound by the CLC Conventions. It is no doubt that a strict liability regime should have been established for ship-based oil pollution damage in Chinese jurisdiction. However, not all the domestic oil pollution cases are governed by the strict liability rule, such as the case of oil pollution caused by the collision of ships. Therefore, Chinese maritime courts might make the judgments according to the relevant laws they choose, which means that ship-based oil pollution cases might be subject to different laws. While the cases of oil pollution damage without foreign issues, the application of limitation of liability for maritime claims are controversial, because there is not a uniform regulation about the application of limitation of liability for maritime claims in the domestic cases. These situations might affect Chinese maritime courts to make sufficient and reasonable judgments for the cases of the recovery of oil pollutions. Under the strict liability regime for ship-based oil pollution, there is some room for recoverability of pure economic loss. The case of 'Tasman Sea' is the typical case allowing the recovery of pure economic loss in ship-based oil pollution in Chinese judicial practice. However, the undefined state of recoverability for pure economic loss in tort has lasted for a long time in Chinese jurisdiction. After the promulgation of Rules on Several Issues Concerning Compensation for Vessel-induced Oil Pollution in the Trial of Cases (the New Oil Pollution Rules) by the Supreme People's Court in 2011, pure economic loss has formally become one category of recoverable damages caused by ship-based oil pollution in Chinese legal system. The New Oil Pollution Rules in 2011 has become the important legal basis supporting the recovery of pure economic loss in ship-based oil pollution in Chinese jurisdiction. However, the unsolved problem is that how to recover the pure economic loss caused by ship-based oil pollution in China. It is impossible to recover the pure economic loss caused by ship-based oil pollution with endless liability. Hence, defining the civil liability for pure economic loss in ship-based oil pollution is a necessary condition for recovering the pure economic loss. This problem shall be divided into two aspects for discussion, one is the admissibility criteria of claims for pure economic loss in ship-based oil pollution and the consideration of recoverable damages; the other is the limitation of scope of compensation for pure economic loss in ship-based oil pollution. In order to claim for pure economic loss in ship-based oil pollution, general admissibility criteria of claims for ship-based oil pollution are necessary. In China, the New Oil Pollution Rules in 2011 has provided the general standards of claims for pure economic loss in ship-based oil pollution, which are similar to admissibility criteria of claims for pure economic loss in the International Oil Pollution Compensation Funds (IOPC Funds) Claims Manual. The general criteria of claims for pure economic loss in the New Oil Pollution Rules require that the causality between the losses and environmental pollution shall be direct. The IOPC Funds consist of three intergovernmental organizations, which support the recovery for pure economic loss in ship-based oil pollution, and they pursue to balance the interests between the polluters and the victims. The IOPC Funds Claims Manual have established a series of admissibility criteria of claims for pure economic loss. In practice, the consideration of recoverable pure economic losses is examined. In China, the claims for pure economic loss in ship-based oil pollution are compensated under general principles of oil pollution torts. However, general principles of compensation in oil pollution torts are not enough to determine the liability for pure economic loss. Thus, in order to limit the liability for pure economic loss, lying down the recoverable categories of pure economic losses is one of available methods, which limits those who can claim for pure economic loss and the amount of recoverable categories of pure economic loss. Nevertheless, if the liability for pure economic loss is endless, pure economic loss will not be recovered. Cutting off the endless causation between pure economic loss and pollution, is the problem we shall solve. From the perspective of liability limits, the recoverability of pure economic loss in ship-based oil pollution shall be discussed in three aspects: exemptions from liability for ship-based oil pollution, limitation of liability for maritime claims and limiting the liability for pure economic loss by proximate cause. Under the strict liability regime for ship-based oil pollution, strict liability requires that whatever a person at fault or not, he shall be imposed on the liability, if there is no legal exemption from liability. There is a close relationship between exemptions and liability. More exemptions from the liability in statutes are available, less liability will be imposed on tortfeasors. With the increasing oil pollution cases in China, legal exemptions from liability for ship-based oil pollution regulated by Marine Environment Protection Law, which are easily available than the CLC 1992 regime, should be narrowed. Moreover, as a traditional part for maritime law, limitation of liability for maritime claims plays an important role in limiting the liability for pure economic loss in ship-based oil pollution. Financial cap is a general approach to limit the liability for maritime claims. However, the amount of limitation of liability for maritime claims in China Maritime Code is too low to compensate the damages or risk of damages caused by the increasing oil pollution cases within Chinese waters. Although the twofold ship-based oil pollution compensation regime has been established in China, the China Ship-based Oil Pollution Compensation Fund (CSOPC Fund) as a supplementary fund to compensate for victims, is not able to cover all recoverable damages in Chinese jurisdiction, especially it cannot compensate for all the recoverable pure economic loss. Therefore, the amount of limitation of liability for maritime claims should be improved and the CSOPC Fund is needed to develop that the scope of compensation for ship-based oil pollution shall conform to the laws relating to ship-based oil pollution in China. Last but not least, the proximate cause here, especially for the foreseeability test, refers to an optimal approach to limit the liability for pure economic loss. There is not a 'foreseeability' test in Tort Liability Law in China. However, it is necessary to adopt the 'foreseeability' test as a second cap to limit the liability for pure economic loss in ship-based oil pollution. Also, it's the basic premise for recoverability of pure economic loss in ship-based oil pollution on the ground that it can provide the possibility to determine the liability. Overall, recoverability of pure economic loss in ship-based oil _pollution is a complicated problem. Recovery of pure economic loss in ship-based oil pollution is a double-edged sword. From Chinese perspective, on one hand, it challenges Chinese ship-based oil pollution compensation regime. The current incomplete ship-based oil pollution compensation regime in China is not enough for the recovery of pure economic loss in ship-based oil pollution. The problem of recovery of pure economic loss in ship-based oil pollution advances the development of Chinese ship-based oil pollution compensation regime. On the other hand, the increasing ship-based oil pollution cases with high amount payments for compensation has caused more social concerns and awakened more economic interests in China. Interests of victims who are not directly suffering from ship-based oil pollution should be acknowledged as well. If there is not a normatively justifiable basis of determining the liability for pure economic loss, the courts might suffer the problems of the floodgates, imbalance of judicial resources and without consideration of human values, etc. After all, it is necessary for China to develop a complete ship-based oil pollution compensation regime, which aims at balancing the interests between potential polluters and potential victims, and balancing the public interests and private interests. Key Words: Pure Economic Loss, Ship-Based Oil Pollution, Recoverability, Limitation of Liability for Maritime Claims

Issue date

2016.

Author

Xian, Jing Han

Faculty

Faculty of Law

Degree

LL.M.

Subject

Liability for oil pollution damages -- China

Oil pollution of the sea -- Law and legislation -- China

Marine pollution -- Law and legislation -- China

Supervisor

Mo Shijian

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