Aviation Law – Air Carrier Liability: Overview of the Montreal Convention 1999

The Convention for the Unification of Certain Rules for International Carriage by Air, known more generally as the Montreal Convention 1999, was the result of an international conference held in Montreal, ending on 28 May 1999.  The convention sets out internationally standard laws for air carrier liability following accidents.

Before the Montreal Convention 1999 there was a set of treaties known as the ‘Warsaw System’ which commenced with the Warsaw Convention 1929.  The Warsaw Convention struck a particular balance between the interests of a fledgling aviation industry and the travelling public which had just gained the benefits of international air travel for the first time.  For the protection of passengers, strict liability was introduced, meaning that the air carrier is liable in the event of an accident, even if the carrier was not at fault.  The trade-off for the carrier was that their liability was strictly limited, regardless of the extent of the passenger’s injuries.

In the 70 years that passed between the Warsaw Convention and the Montreal Convention, a series of other conventions made adjustments to the limits and various other principles of liability.  By the 1990s, the ‘Warsaw System’ was outdated
and over-complicated.  The aim of the Montreal Convention was to modernise and simplify the law relating to accident
claims against air carriers.

The Montreal Convention 1999 is given effect in Australian law by Part IA of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth).  This article provides a brief overview of the Montreal Convention 1999.

International Carriage

The Montreal Convention applies only to ‘international carriage’.[i]  Here, ‘carriage’ means the entirety of the agreement
for the carrier to carry the passenger. For a return trip, this means that the carriage has its origin and its destination in the same place.[ii]  ‘Carriage’ is ‘international’ if:[iii]

  • its origin and destination are in different countries; or
  • if its origin and destination are in the same country, there is an agreed stopping place in another country.

For carriage within Australia that is not ‘international’, legislation similar to the Montreal Convention covers the air carrier’s liability.[iv]

The Carrier’s Liability

The liability of the carrier is set out in Article 17(1) of the Montreal Convention, which reads as follows:

The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.

With this in mind, consider the following three questions:

  1. Was there an ‘accident’?  An ‘accident’ is an unexpected or unusual event, external to the passenger, which is not the result of the passenger’s reaction to the ordinary and expected operation of the aircraft.[v]  This is a broad definition that covers pretty well all crashes and many other smaller incidents that occur which cause injury.
  2. Did the ‘accident’ cause death or bodily injury?  The carrier is liable only where the passenger dies or suffers a ‘bodily injury’ as a result of the accident.  The carrier is not liable where the passenger suffers psychological distress on its own, no matter how serious it is.  However, psychological distress can be compensated to the extent it is caused by, or causes, a bodily injury.[vi]
  3. Did the ‘accident’ occur on the aircraft or during boarding or disembarking?

Limitations

If a claim fulfils all the elements, as Art 17 says, ‘the carrier is liable’.  This is what creates the ‘strict liability’ of the carrier, meaning that it is not necessary for the passenger to prove that the carrier is at fault or that its negligence caused the accident.

However, Art 21 creates a two-tiered system of rules for determining liability limits.  Whether the carrier’s liability is limited or unlimited can be determined by asking three questions:

  1. Will the damages be more than the Article 21 limit?  The Article 21 limit is a specified number of Special Drawing Rights (SDR), an international index calculated by reference to a basket of currencies.  As of 28 December 2019, the current limit is 128,821 SDR, which equates to about AU$260,000.  For accidents occurring before then, the limit is lower.  If your damages are below the limit, your claim is in ‘Tier 1’ and the carrier is liable for the full amount of your damages (effectively, the liability is unlimited).[vii]

If the damages are above the Article 21 limit, then two partial defences become available to the carrier, and the following questions need to be considered:

2. Was the damage caused by negligence of the carrier or its servants/agents?  If the carrier can prove that it was not, then its liability is limited to the Article 21 limit.[viii]

Was the damage caused solely by the negligence or other wrongful act or omission of a third party?  Again, if the carrier can prove that it was, then its liability is limited to the Article 21 limit.[ix]

If the carrier cannot establish either of the partial defences, the carrier’s liability is unlimited.

Extinguishment of Rights

Court proceedings for a claim under the Montreal Convention 1999 must be commenced within 2 years, after which the right to claim is ‘extinguished’.[x]  This time is measured from the date of arrival at the destination, that date the aircraft ought to have arrived, or the date on which the carriage stopped.[xi]  The 2-year period is enforced strictly, meaning it is highly important to start any claim before it expires, and as the right to claim is ‘extinguished’ there is no extension possible.[xii]

Jurisdiction

Under the Montreal Convention 1999, there are five jurisdictions (or ‘forums’) where a claim may be made:[xiii]

  1. The domicile of the carrier;
  2. The carrier’s principal place of business;
  3. The carrier’s place of business where the contract of carriage was made;
  4. The place of destination;
  5. The passenger’s principal and permanent residence, provided that the carrier operates services to that jurisdiction and the carrier conducts business in offices there (either its own or another carrier’s by commercial agreement).

For many passengers, it is easiest to make the claim in their home jurisdiction, however the other conditions of the ‘fifth forum’ need to be met.

Exclusivity

Article 29 of the Montreal Convention 1999 provides that claims against the carrier for damages arising from the carriage of passengers can be brought only within the terms and limits set out under the convention.  The scope of Art 29 is
considered separate to the scope of Art 17, meaning that Art 29 requires some cases to be made under the Montreal Convention, but the Art 17 provides no remedy for them.  For example, claims by passengers for psychiatric harm arising from an accident must be made under the convention, but Art 17 allows claims only for ‘bodily injury’ or ‘death’.

For more information about this international scheme, please get in touch with one of our aviation lawyers.

Bradley Hayward
Principal


[i] Montreal Convention 1999, Art 1.

[ii] Collins v British Airways Board [1982] QB 734; 1 All ER 302 (CA); Grein v Imperial Airways Ltd [1937] 1 KB 50; [1936] 2 All ER 1258 (CA).

[iii] Montreal Convention 1999, Art 1(2).

[iv] Civil Aviation (Carriers’ Liability) Act 1959 (Cth), and similar Acts in each State.

[v] Eastern Airlines, Inc. v Floyd 499 US 520 (1991).

[vi] Pel-Air Aviation Pty Ltd v Casey [2017] NSWCA 32; (2017) 93 NSWLR 438.

[vii] Montreal Convention, Art 21(1).

[viii] Montreal Convention 1999, Art 21(2)(a).

[ix] Montreal Convention 1999, Art 21(2)(b).

[x] Montreal Convention 1999, Art 35.

[xi] Montreal Convention 1999, Art 35.

[xii] Bhatia v Malaysian Airline System Berhad [2018] FCA 1471.

[xiii] Montreal Convention 1999, Art 33.

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