Liability and compensation for passengers in international air accidents

Nase, Vernon (2001). Liability and compensation for passengers in international air accidents PhD Thesis, T.C. Beirne School of Law, The University of Queensland. doi:10.14264/uql.2014.555

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Author Nase, Vernon
Thesis Title Liability and compensation for passengers in international air accidents
School, Centre or Institute T.C. Beirne School of Law
Institution The University of Queensland
DOI 10.14264/uql.2014.555
Publication date 2001
Thesis type PhD Thesis
Supervisor Gabriƫl Moens
Total pages 460
Language eng
Subjects 180123 Litigation, Adjudication and Dispute Resolution
Formatted abstract
Chapter 1 presents the core ideas that form this thesis, namely that there is an imbalance in the Warsaw Convention’s liability system that favours air carriers at the expense of passengers. It is further argued that the most effective way to redress this imbalance in the relationship between air carriers and passengers is to remove the liability cap on damages imposed by the Warsaw convention and to remove notions of blame from the liability system.

Chapter 2 outlines the breadth of the Warsaw liability system. This system extends well beyond the original 1929 convention and includes protocols, supplementary conventions, additional protocols, and, even intercarrier agreements that are legitimised by Article 22(1) of the Warsaw Convention.

After describing what each of the instruments comprising the Warsaw system has brought to the system in Chapter 2, Chapter 3, through close examination of core liability provisions and associated case law, seeks to identify the nature of the liability regime and the problems that flow from its fault-based elements. The fact that the convention establishes its exclusivity in the event of an air incident and then fails to provide a cause of action, when the incident involves natural phenomena of the unexpected kind, is a source of concern. Equally, the failure to incorporate mental injury unless it is accompanied by bodily injury, in certain common law jurisdictions, again leaves the injured passenger with no prospect of receiving compensation despite the existence of a recognisable psychiatric illness caused by the trauma of fear for one’s own life.

The courts have not helped the difficult task of applying in domestic courts a convention whose authentic text is in the French language by creating a contradictory body of case law involving what is and is not an ‘accident’, whether hi-jacking is covered by the convention and whether delivery of the passenger ticket has taken place. In Chapter 3 Article 20 is described as ‘the exonerating provision’ because of the opportunities it provides to air carriers to escape from liability if they can establish that they have taken ‘all necessary measures’ to avoid the accident or that the accident was ‘impossible’ to avoid. Chapter 3 also introduces Article 22, which defines the Warsaw Convention’s liability limit in defunct Poincaré francs representing a certain fineness of gold. It is demonstrated that the liability limit was effectively frozen shortly after its introduction through the abandonment of gold clauses during the Great Depression and through the calculation of Warsaw limits by reference to the equally defunct official price of gold, subsequent to the abandonment of the gold standard by International Monetary Fund countries.

The rationale for imposition of the limitation of liability is examined in Chapter 4 and it is concluded that the original and primary justification for the liability limit, the need to protect a financially fragile industry, no longer holds true. The airline industry is seen as a financially stable industry, as is a robust, global aviation insurance industry. Tables used in this Chapter also demonstrate the fact that, once the Warsaw limits became set in stone, the purchasing power of awards and settlements in the Warsaw system progressively diminished due to the effects of inflation over the past seven decades. It is argued that the liability cap can no longer be justified and that unlimited liability would see ticketing increases on no more than a dollar a ticket resulting from increased insurance premiums.

The backwardness of this liability regime has created a situation, in theory and in practice, where claimants from developing countries are massively disadvantaged in comparison with claimants from developed countries. The case study of the Spitzbergen air crash vividly demonstrates the problems that poor claimants from developing countries experience under this system, viz., paltry advance payments that did not reach many of the families, pressure to settle at a disadvantageous low level brought to bear by the legal representatives of the carriers and insurance companies, the use of delaying tactics to wear down the impoverished families and the use of Article 29 as a ‘sword’ to force the Ukrainian claimants to settle at a lower level than the Russian claimants who were able to stay with the case. This case study clearly indicates areas in need of reform.

Chapter 6 focuses on the significant proposals for change that have been made since the adoption of the Warsaw Convention in 1929. While this Chapter highlights inertia, at both state and inter-governmental level, it also points the way for the future, by outlining very significant initiatives taken by IATA, the European Union, individual airlines and individual states to increase liability limits and create a system that at least reaches the minimum acceptable standards of civilised societies. The scandalously low level of the Warsaw liability limits was emphasised by the court in the case of Coccia v Turkish Airlines with the Italian Constitutional Court concluding that ‘a law which, in the face of injury or loss of human life, excludes the possibility of full restitution is not justified ... it offends the guarantee established by Article 2 [of the Italian Constitution] of the inviolability of the person’.

Against this backdrop of change, the International Civil Aviation Organization (ICAO) developed a draft replacement convention, which is the subject of Chapter 7 of this thesis. Despite some positives this draft retained the liability limit and a fault-based liability system, failed to mandate advance payments and declined to include mental injury per se as a recognised and compensable form o f injury. Essentially, an incremental approach applied. The convention consolidated existing amendments and attempted to catch up to industry initiatives.

The subsequent Montreal Diplomatic Conference of States (1999) failed to comprehend the yawning gulf in practice between that provided by the industry to claimants from developed countries and the lesser treatment provided to claimants from developing countries. The finalised text was based on a pragmatic attempt to consolidate and the need to compromise in order to gain acceptance. The result was retention of an increased liability limit and a toughening of the second tier of liability in Article 21. Given this fundamental strengthening of the liability regime in the interests of carriers, in the zone of compensation required by serious injury or death, the finalised text weakens the position of passengers.

In the final chapter of this thesis it is emphasised that radical increases in insurance premiums would not result if an unlimited liability regime were adopted. A proposal for changing the system to redress the imbalance against passengers is presented in this chapter. The proposal embraces the unification of the law of damages, the removal of the liability cap, the removal of fault from the compensation system, mandated advance payments for serious injury or death, abolition of the temporal limitation on making claims and the inclusion of mental injury as a recognised injury. The most fundamental suggestion made is for the removal of international air law claims from domestic court systems and the creation of an international tribunal of air law to deal with such claims.
Keyword Litigation for aircraft accidents
Aeronautics, Commercial -- Law and legislation

Document type: Thesis
Collection: UQ Theses (RHD) - UQ staff and students only
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Created: Wed, 10 Dec 2014, 14:57:11 EST by Mary-Anne Marrington on behalf of Scholarly Communication and Digitisation Service