A steady space? Bringing stellar legal certainty to space issues

A new space race is heating up across the pond — not to be the first to reach the moon, but to provide a credible and flexible legal framework capable of turbocharging the space sectors in the United Kingdom and Europe. 

The intensity of this drive has increased over the summer of 2025. On June 25, the European Commission published the long-anticipated draft EU Space Act, a potentially landmark regulation that will apply to both EU and non-EU operators providing space services in Europe. The Act’s core objectives are fostering EU competitiveness by harmonizing rules across EU member states, promoting environmental sustainability and ensuring the safety and resilience of space infrastructure. If passed, the Act will come into effect from January 1, 2030, with a two-year transitional period for certain assets and activities.

Not to be outdone, the U.K.’s space sector is entering a pivotal phase. The government’s Industrial Strategy of June 2025 identified space as one of eight high-growth sectors and set a target to become Europe’s leading provider of commercial small satellite launch services by 2030. In late August, the U.K. government also announced that the independent UK Space Agency would cease to operate as an independent entity. The body, established in 2010, will instead be rolled into the Department for Science, Innovation and Technology (DSIT), with a view to delivering faster and more coordinated support to the U.K. space sector. These bold ambitions, however, put the legal framework underpinning the goal under scrutiny.

At the UK Space Conference in Manchester held in July, stakeholders from across government, industry and academia discussed how to align regulation with innovation. Three key lessons emerged — each critical to enabling growth, investment and competitiveness in the U.K. space economy.

Lesson 1: streamline the licensing process 

The U.K.’s licensing regime for space investments remains too slow and cumbersome. The regime is governed by two primary statutes — the Outer Space Act 1986 (OSA), which applies to U.K. entities conducting space activities abroad and the Space Industry Act 2018 (SIA), which governs activities within the U.K. — with the Civil Aviation Authority (CAA) the designated regulator under both.

Licensing under the SIA includes operator licences (for launch, return and orbital operations), spaceport licences and range control licences. Applicants must submit detailed documentation, including safety cases, cybersecurity plans and environmental assessments. The process is understandably comprehensive but unnecessarily slow and opaque. 

The government needs to recognize that space is an emerging strategic market, in which early movers will be best positioned to capitalise on orbital opportunities, whether that be space-based solar power, data centres or in-space manufacturing.

The DSIT’s Space Regulatory Review, published in May 2024, went some way to doing that, identifying seven priority outcomes and 17 recommendations to improve and streamline the system. These include better inter-agency coordination (for example, between the CAA, Ofcom and the Environment Agency), clearer guidance via regulations like Civil Aviation Publication (CAP) 2209 and CAP 2215 for licensing and environmental clearances and more predictable timelines. In August, the DSIT’s review was supplemented by the Rendezvous and Proximity Operations (RPO) Sandbox report. The report sets out over 60 recommendations from industry leaders on how to improve regulation for space missions, including RPO, which will be key to realizing the government’s ambitions. 

Now is the time to implement those proposals. Do so and the U.K. can reduce regulatory friction and attract more international investment. Fail and the risk is clear: watch innovative space-enabled technologies flourish elsewhere. 

Lesson 2: scrap strict liability for operators

It is axiomatic that space activities carry risks. The international standard set by the UN Liability Convention 1972 applies fault-based liability for damage caused in space, thus balancing public protection with commercial viability. 

In contrast, both the OSA and SIA impose strict liability. This means that operators must indemnify the U.K. government for loss or damage derived from their activities and can be held liable without a requirement to prove fault. This puts operators in the U.K. at a competitive disadvantage, one that is particularly problematic for NewSpace start-ups and scale-ups. 

Strict liability under the OSA and SIA should be scrapped, bringing the U.K. into line with the international norm. In the meantime, the government should ensure the passage of the Space Industry (Indemnities) Bill currently before Parliament, which would require the CAA to specify a cap on operator liabilities in all licences. This would bring the U.K. in line with jurisdictions such as the United States, where the Federal Aviation Administration uses a Maximum Probable Loss model to calculate insurance thresholds.

The UKSA’s 2024 consultation on orbital liabilities proposed variable caps and sustainability-linked insurance incentives. These reforms could reduce costs, improve certainty and support the growth of domestic launch capabilities.

Lesson 3: adapt the U.K.’s legal framework to support emerging commercial activities

The U.K.’s existing legal framework under SIA already encompasses “sub-orbital” activities and “spaceflight” activities, which are defined broadly to include the launch, operation and return of spacecraft and other space objects, including crewed and uncrewed vehicles. 

However, as the breadth of commercial space ventures continues to expand, it will be vital to ensure that regulation is adapted rapidly to support activities such as asteroid mining, in-orbit servicing and space tourism. The DSIT’s 2024 Space Industrial Plan commits to doing just, while the U.K.’s participation in the 2020 Artemis Accords and 2023 Astra Carta initiative reflects its commitment to responsible exploration and sustainability.

To make things more challenging, the U.K. will need to balance regulatory innovation with interoperability with the EU’s space regime. Although the U.K. is no longer an EU member, it remains a participant in the European Space Agency (ESA) and collaborates on joint missions. Moreover, U.K. companies engaging with EU-based operators or selling services within the bloc will need to comply with the new legislation. Failure to align could create barriers to market access and collaboration. For example, the EU Space Act may require non-EU entities to meet specific licensing and sustainability criteria to operate within EU jurisdictions. U.K. firms will need to assess their compliance strategies accordingly.

The U.K. space sector generated 18.9 billion pounds ($25.5 billion) in income in 2021 and 2022 and supports over 52,000 jobs. It ranks second globally in attracting private space investment, securing 17% of all such investments in 2022, behind only the United States. To not only maintain but enhance this position, the U.K. needs to combine regulatory adaptability with legal certainty, providing an adaptable framework that encourages innovation, but which is not so frenetic as to undermine predictability. Streamlining licensing, limiting operator liability and supporting emergent technologies are three key aspects of this challenge, which will help shape the future of U.K. space law. Get them right and, for the U.K. space sector, the sky really will be the limit. 

Simon Maynard is a partner at King & Spalding in London. He specializes in international dispute resolution, including in the aerospace and defence sectors, as well as advising companies on the international and domestic regulatory framework for outer space investments.

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