The Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 (the Act) will come into effect in Australia on 24 January 2009, bringing Australian legislation up to date and in alignment with that now in place in much of the world.
The Act gives effect to the Convention for the Unification of Certain Rules for International Carriage by Air, created in Montreal 28 May 1999 (Montreal Convention). The background and detail of the Montreal Convention was discussed in our Trade & Transport Bulletin of 15 May 2008.
The Act amends the Civil Aviation (Carriers' Liability) Act 1959, the Air Accidents (Commonwealth Government Liability) Act 1963 and the Civil Aviation Act 1988.
These changes affect the liability of air carriers for:
- Injury or death of passengers.
- Loss or damage to cargo and baggage.
- Loss caused by delay in the arrival of passengers, baggage and freight occurring during international air carriage.
The Act increases the scope of passengers and their family members to hold carriers liable for loss suffered by passengers through measures:
- Providing that applicants will be able to claim up to 100,000 Special Drawing Units (currently approximately A$225,000) on a strict liability basis. (Until now Australia has imposed a limit of A$500,000 in most cases.)
- Providing that unlimited damages are available unless the air carrier can establish either the damage was not caused by its own negligence or was caused by the negligence of a third party. (Liability has in the past generally been limited at A$500,000.)
- Increasing the range of individuals who can bring an action against a carrier for loss through inserting a broad definition of 'family member' into the Civil Aviation (Carriers' Liability) Act 1959.
- Increasing the damages potentially recoverable by extending to all 'family members' access to beneficial rules for recovery of damages. (Access was previously only available to spouses and children.)
- Providing for regulations to increase insurance levels for air carriers and to increase liability limits for Australian international carriers. (This will necessitate amendment to existing regulations.)
- Providing that a carrier's liability under the Montreal Convention for the death of a passenger is in place of any civil liability arising due to the death or the injury causing the death, subject to certain exclusions. (This is similar to the previous position.)
- Making it clear that the Montreal Convention and Act do not exclude a carrier's liability to indemnify the employer of a passenger for worker's compensation payments, or to make contributions to a tortfeasor who is also liable for a passenger's injury or death. (Once again this is similar to the previous position.)
- Allowing for the possibility of no maximum liability of a carrier applying to contract of carriage, as carriers may voluntarily stipulate that a higher or no liability limit applies for carriage. (Again this is similar to the previous position.)
- Allowing for claims for personal injury or death to be brought in the territory or state in which the passenger ordinarily resides if the carrier has an establishment there and operates to that place. (This has not been available previously for accidents outside Australia.)
There is clearly a trade-off between reduced strict 'no fault' limits for personal injuries or death and the ability to break through the limitation barrier and obtain unlimited damages if the carrier cannot disprove negligence. The Australian government has had to weigh up the benefit of unlimited liability against the imposition of the lower strict liability limits.
There is also little if any change in relation to air cargo or baggage liability – and these limits remain particularly low – even by way of comparison to limits applicable in sea carriage.
The enhanced ability to bring death and personal injury claims against foreign carriers in Australia is to be welcomed – and was a hard-fought battle that was waged primarily in the United States in the negotiation stage of the Montreal Convention.
WHERE TO NEXT?
The federal government intends to make further changes to Australia's system of carriers' liability and insurance. It should be noted that under Article 50 of the Montreal Convention, State parties are to require their carriers to maintain 'adequate' insurance covering their liability under this Convention. 'Adequate insurance' is not defined and will no doubt be a matter of some debate.
As discussed in the Trade & Transport Bulletin of 11 December 2008, the Australian government recently published an Aviation Green Paper as part of a process of establishing a national Aviation Policy. A White Paper will be released in the second half of 2009.
The federal government has announced a comprehensive review of Australian carriers' liability and insurance arrangements. It is anticipated that a discussion paper will be released in early 2009. We will keep you posted.
Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.
This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.