By CHRIS DANIELS
In four weeks, global rules covering liability and compensation
for the airline industry will undergo their biggest overhaul in 70
On November 4, the 1929 Warsaw Convention, derided as hopelessly
outdated and irrelevant,
will be replaced by the 1999 Montreal
Convention, which brings into law the principle of unlimited
liability for airlines in the event of a crash.
It also gives extra scope for crash victims and their families to
sue for damages in their home countries.
But the opportunity for passengers to take legal action against
airlines in their home countries only applies if the airline flies
to that country.
For instance, a New Zealander would be able to sue an airline in
a local court for a crash or incident in Europe, so long as that
airline also flew to New Zealand.
The injury or death of international air travellers is one of the
few areas not covered by ACC laws, so victims or their families can
sue for damages.
Remarkably, the push for "unlimited liability" coverage came from
the airlines themselves, responding to lengthy and financially
crippling litigation launched by victims and their families after
Anthony Mercer, special counsel, aviation, at law firm Buddle
Findlay, said there had been a degree of altruism in the airlines
accepting unlimited liability, but there was also self-interest.
"They resulted in very expensive litigation sagas in the US,"
"They were finding that an awful lot of money was going into
defence, paying attorney fees over a number of years."
The airlines decided it was inappropriate to continue arguing the
issue of liability, which was being fought over precisely because
the old Warsaw Convention only provided for compensation of
This meant that if a victim's family thought they deserved more
compensation, they had to try to prove the airline had wilfully or
recklessly caused the accident.
Since 1996, many airlines, including Air New Zealand, have waived
the Warsaw Convention in an attempt to stave off the long and costly
"If a family wanted anything more than the $20,000, then they had
to try and prove the wilful
misconduct," said Mercer.
"The carrier would, of course, defend this rather than running
the risk of paying out too much money."
Now, in the event of a crash, the airline, through its insurers,
will try to work out how much it would pay victims, hoping to settle
the matter quickly, rather than having damages determined by a jury
or a judge after a lengthy court battle.
From next month, airlines will have no choice but to be covered
by the Montreal Convention, that lays down the unlimited liability.
Another change to the international law coming into force on
November 4 is the way compensation for lost bags is determined.
Previously it was judged on the weight of the bags lost, but now
a maximum of around $2400 for all baggage has been introduced.
A maximum of $10,000 is coming into force for flight delays.
Air NZ spokeswoman Rosie Paul said the airline already had
extensive liability insurance and the ratification of the Montreal
Convention merely formalised existing arrangements.