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Civil Aviation (Carriers' Liability) Amendment Bill 1991



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House: House of Representatives Portfolio: Transport and Communications Purpose To increase the liability limit of Australian international civil aviation carriers with respect to passenger death and injury and set liability limits in terms of Special Drawing Rights.

Background The Civil Aviation (Carriers' Liability) Act 1959 (the Principal Act) regulates the liability of Australian international civil aviation carriers' with respect to the death or injury to passengers and loss or damage to goods. The Principal Act does this by giving effect at Australian law to certain international conventions and protocols, some of the main provisions of which are briefly discussed below.

The Warsaw Convention: The aim of the Warsaw Convention, which entered into force on 13 February 1933, is to regulate international civil aviation carrier liability and the documents of international air transportation. Article 17 provides that a carrier is liable for damages with respect to passenger death, wounding or any other bodily injury, if the accident took place on board an aircraft, or in the course of embarkation or disembarkation. Article 22 of the Warsaw Convention, limits a carrier's liability, except where there is a contract to the contrary existing between the parties, to: * for each passenger - 125 000 Poicare gold francs; * for checked baggage - 250 Poicare gold francs per kilogram (Note: If the consignor has made a special declaration of the value at delivery, the carrier will have to pay a sum not exceeding the declared sum, unless he/she proves that it is greater than the actual value to the consignor at delivery; and * for objects of which the passenger takes charge - to 5 000 Poicare gold francs per passenger.

The limit on a carrier's liability will not be applicable if the damage results from his/her wilful misconduct or the wilful misconduct of one of his/her agents; or from a fault, which according to the law of the Court to which the case is submitted, is considered to be equivalent to wilful misconduct. The Warsaw Convention was signed for Australia on 12 October 1929 and the instrument of ratification deposited on 1 August 1935.

The Hague Protocol: The Hague Protocol entered into force on 1 August 1963, was signed for Australia on 12 July 1956 and the instrument of ratification deposited on 23 June 1959. The Hague Protocol brought a number of changes to a carrier's liability. A carrier's liability limit towards each passenger was increased from 125 000 Poicare gold francs to 250 000 (Article XI of the Protocol). Article XIII amended Article 25 (paragraphs 1 and 2) of the Warsaw Convention to provide for unlimited carrier liability in cases where it could be proved that damage resulted from an act or omission on the carrier's part, or on the part of the carrier's agents, and was made either with reckless intent, or recklessly, and with knowledge that damage would probably result. Article XIV of the Hague Protocol inserted a new Article 25A into the Warsaw Convention which limited the liability of a carrier's agent to that of the carrier, except in cases in which the damage results from an omission of the agent with reckless intent, and with the knowledge that damage would probably result.

The Guadalajara Convention: The Guadalajara Convention entered into force on 1 May 1964, was signed for Australia on 19 June 1962, and the instrument of ratification deposited on 1 November 1962. Article V of the Guadalajara Convention grated to servants and agents of carriers, the same limited liability regime as that applying to carriers. Article VI of the Guadalajara Convention deals with the total amount of compensation which may be obtained from the contracting carrier and the actual carrier in situations where they are found to be liable. In such a situation, for each of them the amount of compensation is not to exceed the limits provided in Article 22 of the Warsaw Convention. The Guadalajara Convention grants interested parties (e.g. passengers, consignors/consignees or their claimants), at their option, in relation to carriage performed by the actual carrier, the right to bring an action against that carrier or the contracting carrier, or against both together or separately (Article VII).

The four Montreal Protocols: In 1968, the International Monetary Fund (IMF) created the Special Drawing Right (SDR) as the unit by which legal settlements were to be expressed. The SDR is based on a basket of sixteen currencies of countries belonging to the IMF and engaged in, at least, 1% of the world's trade. When Montreal Protocols Nos. 1-4 come into force, they will substitute the SDR for the Poincare gold franc. Montreal Protocol No. 3 increases the liability limit of carrier's to: * in the case of passenger death or injury - 100 000 SDR (which is equivalent at current exchange rates to approximately $180 000); * in the case of passenger delay - 4 150 SDR; * in the case of the destruction, loss, damage or delay to baggage - 1 000 SDR (which is equivalent at current exchange rates to approximately $1 600); and * in the case of loss, damage or delay to cargo - 17 SDR per kilo. (This limit will apply except where the consignor has made a special declaration of the value of the cargo and, if required paid a supplementary fee. Where this occurs, the carrier will be liable to pay a sum not exceeding the declared sum.)

A system of strict carrier liability is provided for under Montreal Protocol No. 4. A carrier is liable merely because the damage has occurred on board an aircraft, without the victim having to prove fault and without the carrier being able to exonerate himself/herself by justifying that certain measures were taken in order to avoid the damage (Article 17). This strict liability regime is also extended, subject to four defences, to cargo by Article 18. A carrier will not be liable for damages in relation to the destruction, loss of, or damage to, cargo resulting solely from one or more of the following: * inherent defect, quality or vice of that cargo; * defective packaging of that cargo performed by a person other than the carrier or his/her servants or agents; an act of war or an armed conflict; or * an act of public authority carried out in connection with the entry, exit or transit of the cargo.

Main Provisions New sections 8 and 9 will be substituted into the Principal Act by clause 4. Where a court is assessing damages recoverable against a carrier under the Principal Act, it is to convert all SDR amounts into Australian dollars using the exchange rate published by the Reserve Bank (proposed section 9).

Section 17 of the Principal Act, which deals with actions against parties to the Warsaw Convention as amended by the Hague Protocol, will be repealed by clause 6 and new sections 17 and 17A inserted. Proposed section 17 provides SDR equivalents to Poincare gold franc liability limits contained in the Warsaw Convention as amended by the Hague Protocol. The effect of proposed section 17A will be to increase, in relation to passenger death and injury, the liability limit applicable to Australian international civil aviation carriers from 16 600 SDR to 100 000 SDR (which is equivalent at current exchange rates to approximately $180 000).

Section 23 of the Principal Act, which deals with actions against parties to the Warsaw Convention, will be repealed by clause 7 and new sections 23 and 23A inserted into the Principal Act. Proposed section 23 provides SDR equivalents to Poincare gold franc liability limits contained in the Warsaw Convention. The effect of proposed section 23A will be to increase, in relation to passenger death and injury, the liability limit applicable to Australian international civil aviation carriers from 8 300 SDR to 100 000 SDR (which is equivalent at current exchange rates to approximately $180 000).

A new Part IIIB (proposed sections 25D-25H), that deals with the effect of Montreal Protocol No. 3 at Australian law, will be inserted into the Principal Act by clause 11. The effect of proposed section 25E will be to give effect at Australian law to Montreal Protocol No. 3 in relation to any carriage by air to which the Protocol applies, irrespective of the nationality of the aircraft performing that carriage. Proposed section 22H will allow the Minister to declare by gazettal who are the Parties to Montreal Protocol No. 4; the parts of Commonwealth in respect of which any party to the Protocol is bound; and the extent to which any party to the Protocol has availed itself of a reservation allowed by the Protocol.(Note:It would appear that an error has been made in the numbering of this proposed section. It could be argued that it should read as proposed section 25H rather than proposed section 22H.)

A new Part IIIC (proposed sections 25J-25Q), that deals with the effect of Montreal Protocol No. 4 at Australian law, will be inserted into the Principal Act by clause 12. The effect of proposed section 25K will be to give effect at Australian law to Montreal Protocol No. 4 in relation to any carriage by air to which the Protocol applies, irrespective of the nationality of the aircraft performing that carriage. Proposed section 25L provides SDR equivalents to Poincare gold franc liability limits contained in Montreal Protocol No. 4. The effect of proposed section 25M will be to increase, in relation to passenger death and injury, the liability limit applicable to Australian international civil aviation carriers from 16 600 SDR to 100 000 SDR (which is equivalent at current exchange rates to approximately $180 000).

Bills Digest Service 30 October 1991 Parliamentary Research Service

For further information, if required, contact the Law and Government Group on 06 2772430.

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1991.

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Published by the Department of the Parliamentary Library, 1991.