The strengthened liability and compensation regime for rail, under the Safe and Accountable Rail Act, will be brought into force on 18 June 2016. The regime is based on the “polluter pays” principle, sharing responsibility for rail accidents between railways and shippers.
Under the new regime, federally regulated railways will be required to carry a mandatory minimum level of insurance, based on the type and volume of dangerous goods they carry, ranging from $25 million to $1 billion. The two middle insurance levels, $100 million and $250 million, are being phased in to provide short line railways with additional time to adjust to the new requirements. These levels will be fully implemented on 18 June 2017.
The regime also establishes a supplementary compensation fund – the Fund for Railway Accidents Involving Designated Goods – financed by shippers of crude oil by rail. This fund will cover any damages above the railways’ mandatory insurance level for accidents involving crude oil.
These measures ensure that sufficient resources will be available to adequately compensate potential victims, pay for clean-up costs and protect taxpayers in the event of a rail accident.
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