The 1972 Liability Convention makes launching states financially liable for damage their space objects cause: absolute liability for damage on Earth or to aircraft, fault-based liability for damage in orbit. It has been formally invoked once — for Cosmos 954's radioactive crash in Canada.
Understanding Liability Convention
Cosmos 954: the one real test
When the reactor-powered satellite decayed and broke up over the Northwest Territories in January 1978, contaminated fragments spread across tens of thousands of square kilometres. Canada's claim invoked the convention's absolute liability for surface damage, itemising the massive search-and-cleanup operation. The 1981 settlement — C$3 million against a claimed C$6 million — proved the machinery functioned, while showing that diplomacy, not adjudication, would do the work.
Liability in the constellation era
The convention's pressure now flows through insurance and licensing: governments, aware they hold the international liability, demand third-party cover and debris compliance from licensees. Unresolved edges accumulate — objects sold on orbit between owners in different states, debris of unattributable origin, cumulative harm from congested orbits — and each near-miss between national fleets quietly stress-tests a fault standard written before anyone imagined ten-thousand-satellite constellations.