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Thursday, 26 June 2008
Page: 3508

Senator SCULLION (Leader of the Nationals in the Senate) (1:19 PM) —This bill, like so many pieces of legislation we have been looking at over the last few months, is legacy legislation from the previous government. The Montreal convention has substantively changed. Under the Warsaw convention, carriers currently are not liable for the death or injury of a passenger or for damage to air cargo if they can prove that they took all necessary precautions to avoid the loss. It also capped the carriers’ liability at a rate which is now out of date, unreasonably low and set at a currency which was then, I think, the Poincare gold franc, which no longer exists.

Different parties to the Warsaw convention subsequently adopted a variety of amending instruments, resulting in a complex and confusing array of international arrangements. The Montreal convention is designed to overhaul the system and to eventually replace the Warsaw convention. It introduces a two-tier system of liability for death or injury. The first tier, which is for damages up to approximately A$190,000, is on the basis of no-fault liability and cannot be reduced except in the event of contributory negligence by the passenger. For the second tier—damages exceeding this threshold—the carrier is liable unless it can demonstrate that the change was not due to its negligence or that of its agents.

Effectively, the Montreal convention increases the compensation limit for victims of air accidents. It also sets the monetary unit of compensation as the SDR—the special drawing right—of the IMF rather than the long-abandoned gold standard and provides for the periodic review of compensation to take account of inflation. It will also enable Australians to bring legal action in Australia rather than in the country where the air accident occurred, and it modernises the list of family members who are entitled to seek compensation in the event of death in an air accident.

The Montreal convention will also ease the burden on air shipping companies by removing the need for handling paper waybills for air cargo and allowing them to use electronically based waybills. The Montreal convention was concluded in May 1999. It combined the various provisions of the previous Warsaw system arrangements into a single package and entered into force in November 2003.

The Department of Transport also issued a discussion paper in 2005 reviewing the Civil Aviation (Carriers’ Liability) Act 1959 in light of the decision by the Australian government to accede to the Montreal convention and proposing amendments to the Australian law that would have had the same effect as the legislation currently proposed by the government. Effectively, the coalition government, as I have indicated, had already decided to accede to the Montreal convention. This is the next step—to amend the law in such a way as to put this into force. This legislation, therefore, is implementing a convention that the coalition had already approved when it was in government and which it had already planned to implement. The coalition is happy to support this legislation.