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Monday, 10 September 2012
Page: 9923

Ms SAFFIN (Page) (12:57): I rise to speak in support of the Aviation Legislation Amendment (Liability and Insurance) Bill 2012. This bill essentially gives expression to actions agreed to arising out of the 2009 national aviation policy white paper. That paper, from memory, was the first comprehensive aviation review in some time. It was useful in guiding reforms and measures that are required.

This bill is an amending bill and will amend the Damage by Aircraft Act 1999—or DBA Act, as it is known—and the Civil Aviation (Carriers' Liability) Act 1959, CA(CL) Act. It will also harmonise and modernise provisions to be in step with the Convention for the Unification of Certain Rules for International Carriage by Air 1999, commonly called the Montreal convention. Thank goodness it has a common name.

I understand that over 100 states have acceded to the Montreal convention and implemented it—including of course Australia. That is absolutely necessary to give consistency, to give a whole range of things that are necessary, to the aviation industry.

Further to amending the two acts and the convention cited, the bill also gives expression to case law that has turned on the issue of contributory negligence. I will talk a little bit about that in my contribution. The specific changes are as follows. It will increase the current domestic passenger liability cap and mandatory insurance requirements—the payout for someone who is injured will be raised from $500,000 to $725,000. I understand this increase reflects CPI changes. I also understand that this amount has not been changed since about 1994. It will also limit mental injuries compensation to the definition contained in the Montreal convention by making the provisions consistent in international and domestic frameworks. Article 17 of the Montreal convention carries the definition, and that revolves around mental injuries and death or bodily injury. I understand courts have interpreted bodily injury as excluding claims for mental injury, but domestically it does not sit like that—it is interpreted differently, and this change will bring those interpretations into synchronicity. The bill will limit the liability of carriers domestically to the bodily injury definition. It will deal with those two areas.

The DBA Act creates a very tough system of liability for air operators and the liability, as we have heard from most of the contributions here, is both strict and unlimited. It would be inappropriate to require airlines to provide uncapped compensation for the pure mental injury without reference to whether the airline was at fault. A large audience who witnessed an air crash could expose aircraft carriers to a potentially very wide group of claimants on the basis of strict and unlimited liability, thereby imposing incalculable risks on the industry. As a solicitor I get a bit of heartburn when I come in here to talk about caps and strict liability and changes and bringing in contributory negligence, but I am here as a legislator, as a lawmaker, with a different role and I understand that these changes are absolutely necessary for the system to work. In considering them I have thought of all the possibilities, all the arguments, that can be raised and I accept that it is necessary to introduce these changes.

I was reading all of this material on the plane yesterday. I fly with Rex a lot because I fly from Lismore to Sydney and then I change over at Sydney Airport. Essentially we are talking about accidents, and I wondered whether I should have been reading it while I was flying. I did not share with the other passengers what I was reading—I smiled to myself and thought, 'Don't be silly; just read it and get it done'. Essentially we are talking about accidents, although we have such a safe aviation industry. We are very fortunate, but it is not just a matter of being lucky—it is making sure that we have the proper legal and policy frameworks and also the enforcement mechanisms to make sure that we maintain such a safe industry in Australia. It is something we can all pride ourselves on, and we do.

I turn now to contributory negligence. Case law has been mentioned by other speakers. It was found in the 2008 New South Wales case of Crook v Aircare Moree Pty Ltd that the partial defence of contributory negligence was unavailable for claims brought under the DBA Act. I have also cogitated on where contributory negligence could be a factor, and it would rarely be brought into play. This change at least allows that to be raised by way of defence and argued through, but I countenance it would rarely be a factor. The things I was thinking about were some common things. We put our seatbelts on in planes and we get told to keep them on at all times except when we have to move around, so I was thinking through all the possibilities where things could be raised and I thought no, it would be rare where the courts would bring that into play with the changes to the act. That is an important consideration. It needs to be there so it can be raised. That is one of the essential changes

Another point is that mandatory passenger insurance legislation was only introduced in 1995. That is not that long ago. That was in response to the tragic Monarch Airlines fatal accident. This accident led to a requirement that our domestic airlines insure against the full extent of potential liability under the CA(CL) Act, and this bill proposes an increase in the level of mandatory passenger insurance that is proportionate to the proposed increase in the cap on carriers' liability. It is important that that be there; it is important for consumer protection and it is important for us. It is important for the public, otherwise we would not be doing it. While Australia does have a proud aviation safety record, it is important that we continue to strengthen these protections. It is an ongoing process so it is not like 'Okay, that is done; that is finished'—things have to be monitored and reviewed continually. Changes come in, and they have to be bedded down and then we see how they go. This legislation is the right thing to ensure that victims of aircraft accidents and their families—God willing, there will be few—are adequately compensated.

I wanted to speak briefly about the possible price increases resulting from this legislation—because I have been asked about it and because I know I will be asked about it on the radio as well. How much will it cost? The information I have is that, for a major airline carrier, the increase might be 13c and, for a smaller regional carrier, it might be 63c. Since I fly in the regions, I always look at estimates like that and wonder why the impact is higher in the regions. I do know why. It is a mathematical thing—number of passengers et cetera. I get that. But those estimated price increases are small and they represent a very small price to pay for an increase in the cap and to have our safety better protected.

Given that I fly a lot with Regional Express, or Rex as we call it, I know that regional airlines will always say, 'Why do we have these extra costs?' But, in a media release from 31 August 2012, the executive chairman of Rex, Mr Lim Kim Hai, said:

Even as almost every blue-ribbon legacy airline in the world, be it Singapore Airlines, Air France, Lufthansa, Emirates or Qantas, reported profits plunging more than 60 per cent or even losses, I feel humbled and blessed that Rex was able to increase its profit by 45.6 per cent to end the financial year with a record profit.

I think a lot of airlines would like to be saying that and to have the health that Rex has. I am very fortunate that my regional airline—the one I fly with—is such a great airline and is doing so well. The small cost issue associated with this legislation will not affect how well Rex is doing. In closing my contribution, I thank the Minister for Infrastructure and Transport for bringing these provisions into line—for modernising and harmonising them—and making sure that we have better consumer protection and better payouts in the event of injury.