The Liability Regimes in International Air Transportation

Deficiencies and Achievements

Term Paper (Advanced seminar) 2013 21 Pages

Law - Miscellaneous


Table of Content

List of Abbreviations

1. Introduction to the Law of International Carriage by Air

2. The Liability Regimes in International Air Transport
2.1 Development from Warsaw to Montreal Convention
2.2 The Warsaw Convention of 1929 and its System
2.2.1 Format and Legal Relevance of Carriage Documents
2.2.2 The Liability of the Carrier
2.2.3 Adaptions to the Warsaw Convention 1929-1955
2.3 The Montreal Convention of 1999 and its Contents
2.3.1 M99 Format and Legal Relevance of Carriage Documents
2.3.2 The Liability of the Carrier

3. Achievements and Deficiencies of Warsaw and Montreal Regimes
3.1 General Air Carrier Liability Interpretation – Pro and Contra
3.2 Development of Passenger’s Bodily Injury Liability from Warsaw to M99
3.3 Emergence of Liability Rules for Flight Delays and Cancellations
3.4 Changes to Baggage and Cargo Liability over the past 80 years

4. Conclusion and Outlook



List of Abbreviations

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1. Introduction to the Law of International Carriage by Air

This seminar paper deals with the development and contents of the most important rules for liability in international air transportation. The aim is to make clear which basis for liability claims exists, which parties are involved and what the maximum liabilities for different issues are.

Therefore, the paper is divided into four chapters. The introduction will give a general overview about the concept of liability and basic definitions. Chapter 2 will introduce the historical development during the 20th century and illustrate the contents of the Warsaw system as well as the Montreal Convention (M99). In chapter 3 the different regimes will be compared in regards to different liability objects and achievements as well as deficiencies are described. Finally a conclusion and outlook will close the paper.

The need of clear and structured air law is of utmost importance for the whole aviation industry. Even though total loss aircraft accident numbers are declining, there are many events where liability rules need to be applied. Be it for example a damaged baggage. Limits and amounts of possible payments need to be carefully considered in e.g. the airlines cost calculation.

Air law is not an autonomous branch in the system of law because of the different subjects involved. There can be various combinations of subjects like physical persons, corporate bodies or sovereign states. Some examples could be cases within the same or from different jurisdictions between two physical persons, between a physical person and a corporate body, between a physical person and a citizenship/ foreign State, between corporate bodies or even between states. These combinations lead unavoidably to the fact that aviation-related relations can be governed by private law, labor law, administrative law, criminal law or public/ private international law.[1]

In general it is differentiated between public law (the relations between state authorities and the citizens) and private law (people and private legal entities on equal footing without subordination). This paper mainly deals with private international air law which regulates the relationship of private entities (persons or businesses) acting in international air transport. The focus will not be on public international law which governs the actions of international community states. The rapid development of air transport after World War I made it necessary to create public laws that include liability rules.[2]

One of the most important sources for international law are treaties. A treaty is defined as “legally binding agreement deliberately created by, and between, two or more subjects of international law who are recognized as having treaty-making capacity.”[3] A treaty, which can be a convention, agreement or protocol, usually consists of a title, a preamble, recitals, the articles, a conclusion and the signatures in written form. Only by treaties states (sometimes even international persons) may create binding legal obligations, governed by international law. Details about treaties can be found in the law of treaties. In order to join a treaty it is not sufficient to only sign the concluded rules but each state has to ratify the treaty. In Germany ratifications are done by the parliament and finally signed by the President of State. If adjustments over time are needed, treaties can be amended by agreement between the parties considering the decided rules for conclusion (often two-thirds of present states is sufficient).[4]

The history and contents of the most important private international treaties for air transportation will be described in the next chapter.

2. The Liability Regimes in International Air Transport

2.1 Development from Warsaw to Montreal Convention

The following Warsaw and Montreal Conventions have to be differentiated from the Chicago convention of 1944, as Chicago deals with public international law looking at e.g. technical standards, licensing, freedom of air, accident investigation or security issues. But public law should not be the topic of this paper.[5]

The Warsaw Convention of 1929 was the first rule setting treaty for air carrier’s liability for damage caused to passengers, baggage and cargo as well as for negative results of delays. It is still the basis, even though it was updated, for carrier liability and therefore an important base for airline management decisions. Due to the drastically expanding aviation industry the Warsaw Convention had to be updated by the following treaties over the past century:

The Hague Protocol of 1955 with adaptions to the demand of modern transport and higher liability, the Guadalajara Convention of 1961 with additional rules regarding chartering, the Guatemala Protocol of 1971 with new updates but not coming into force, four more amending Protocols in Montreal in 1975, the Montreal Agreement of 1966 with a conclusion between IATA carriers and the United States Civil Aeronautics Board as well as the Malta Agreement and finally the new Montreal Convention of 1999 (M99). Last enhancements were done in the Cape Town Convention on Mobile Equipment in 2001. It is important to know that ICAO decided to establish the Montreal Convention as a supplementary convention and not another protocol. Main reason was the increasing questioning of the Warsaw system liability limitations by several country courts.[6]

This shows that the liability laws continuously need to be updated as a reaction on technological development and expansion of the whole industry. In the following the contents of Warsaw and Montreal Convention will be described. A detailed comparison and assessment follows in chapter 3.

2.2 The Warsaw Convention of 1929 and its System

The Warsaw Convention was signed on 12th October 1929 and went into force on 13th February 1933. Today 152 countries ratified it and partly still adhere to it. The modified Hague Protocol was ratified by 137 states and went into force on 1st August 1963.[7]

Before looking at its contents, it makes sense to understand the applicability of the Warsaw Convention. In article 1 it says “This Convention applies to all international carriage of persons, luggage or goods performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.”. So this treaty only applies for international transport of persons, baggage or cargo by a carrier using an aircraft (any machine that can derive support in the atmosphere from reactions of the air, not hovercrafts)[8]. However, many countries apply these rules also for domestic flights.[9] The Convention does not apply to cross-border carriage by air for experimental trial flights by air navigation companies, carriage in extraordinary circumstances nor to transportation under international postal conventions. It can happen that on one flight for some passengers the Warsaw Convention rules apply while for others it does not. The simple reason is that it depends on the ratification of the state where the passenger boarded the aircraft. If a plane stops for commercial reasons in a different country this situation can occur.

Furthermore, it must be stated that not all relations between airline and passenger/ forwarder are covered by the Convention but there are additional conditions by IATA. In total there are five chapters with 41 articles which will be explained in the following.[10]

2.2.1 Format and Legal Relevance of Carriage Documents

Under chapter 2 of the Convention the requirements of passenger ticket, baggage check and air waybill are defined. First, it is of utmost importance to provide the passenger or shipper with the limitation of carrier liability under the prevailing rules or the carrier might lose these limitations.[11] Each passenger ticket must include the place and date of issue, points of departure and destination, intermediate stops (if applicable), name and address of the carrier and the already mentioned notice that the carriage is subject to the Warsaw Convention. The Convention also applies without ticket issue, but then the carrier is unlimited liable. The trend of the internet, online ticket sales and paperless travel leads to many new questions on how the underlying liability needs to be shown. This will be explained later.[12]

In article 4 the luggage ticket is defined. This check must contain the same data as for the passenger ticket and further include a reference to the serial number of that ticket, package information such as value declared and a statement that only the check bearer gets the baggage.

Finally, the rest of chapter 2 states the requirements for air waybills. Each AWB has to be made out in triplicate where each copy holds the status of an original. The copies are for the carrier, consignee and consignor and should include information like e.g. routing, carrier/consignee/consignor name and address, nature/weight/ dimensions or condition of goods.[13] In this case the carrier liability is only unlimited if an error in AWB information is of commercial significance. The consignor is liable for all damaged that occur because of his inaccurate declaration (articles 10 & 16). The carrier thereby does not even have to check whether the given information is correct or not. Whenever something is lost by the carrier, it is important to state this in the claim as liability differs from damage.[14] All these rules were first introduced by the Warsaw Convention and therewith a major breakthrough.

2.2.2 The Liability of the Carrier

This chapter 3 of the Warsaw Convention is also called the “heart”. The most likely reason for setting limits for liability of airlines was the protection of the infant aviation industry which otherwise would not have been able to continue its development. Normally the limitation of liability to a fixed money amount is totally contrary to its general principle of restitution (status quo ante).

A main element of the liability is the presumption of fault of the carrier, meaning that the carrier has to prove that the damage was not his fault instead of the claimant to evince the carrier’s wrongdoing. This principle is called reversed burden of proof and a very important element.[15] The carrier will be unlimited liable if it is proven that he misconducted by purpose or did not do all possible measures to avoid the damage. It is not allowed to reduce the liability limits by bilateral contract.

In case of a lawsuit the plaintiff has the choice between four jurisdictions: Carrier domicile, place of contract creation, flight destination place or the usual place of business of the carrier. Of course those states must be contracting partners of the Convention. Overall the carrier is liable for “…damage sustained in the event of death or wounding of a passenger or any other bodily injury…”[16]. Articles 17-19 also include liability for delays (if not reasonable) and damaged baggage or cargo.

The carrier liability limit was set to 125,000 francs (8,300 USD; 10,000 USD after devaluation) between 1929 and 1968 for death, wounding or other injuries. This however was not always paid but only when the claimant proved that the amount of damage was on this level or above. The limit for loss of or damage to baggage and cargo was set to 250 francs (17 SDRs[17] or 20 USD after devaluation) per kg. Hand luggage has a limit of 400 USD per kg.[18] In two cases the carrier liability does not have a limit: Wilful misconduct (article 25) and when no passenger/ baggage/ air waybill ticket was issued or is missing information or the convention note (articles 4, 8).

It is out of question that the rapid expansion of international air transportation led to changing circumstances and requirements in regards to liability. In the following the adaptions in the Warsaw system after 1929 will therefore be described.

2.2.3 Adaptions to the Warsaw Convention 1929-1955

After a rapid growth of air transportation after World War II the need for an update of the 26 years old Warsaw Convention arose. Therefore, the Hague Protocol was created and ratified by 137 states (the US only in 2003) and came into force on 1st August 1963. Main amendment was the doubling of carrier liability to around 20,000 USD. Also the requirements for passenger and baggage tickets were too complex before and had from now on only to include the place of departure/destination, stopping places and that liability is subject to the Convention. Also carriers were no longer released from liability in case of proving that damage was caused by negligence in the handling of e.g. cargo. Article 25 and the term “wilful misconduct” was replaced by “…intent to cause damage or recklessly and with knowledge that damage would probably result”.[19]

Only six years later, in 1961, a supplementary convention named after the Mexican city Guadalajara was ratified by 86 parties. The whole field of unscheduled-services or charters was added to the Warsaw basis. However, only wet-leasing[20] was part of it. The performing carrier thereby is only liable to the Warsaw limits while his acts can lead to unlimited liability of the contracting carrier (article 3). Jurisdiction was extended to the actual carrier’s forum.


[1] Cf. Milde 2008 Page 3

[2] Cf. Wensveen 2007 Page 463 ff

[3] Diederiks-Verschoor 2006 Page 7

[4] Cf. Diederiks-Verschoor 2006 Page 9

[5] Cf. Milde 2008 Page 13ff

[6] Cf. Diederiks-Verschoor 2006 Page 100ff

[7] ICAO 2013 I

[8] Jakhu, Sgobba, Dempsey 2011 Page 59

[9] Cf. Warsaw Convention Chapter 1, Article 1

[10] Cf. Diederiks-Verschoor 2006 Page 103 ff

[11] Cf. Milde 2008 Page 267

[12] Cf. Warsaw Convention Chapter 2, Article 3

[13] Cf. Warsaw Convention Chapter 2, Article 8

[14] Cf. Diederiks-Verschoor 2006 Page 114 ff

[15] Cf. Milde 2008 Page 268 ff

[16] Warsaw Convention Chapter 3, Articles 17-19

[17] Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (Source IMF)

[18] Cf Milde 2008 Page 269

[19] Cf. Diederiks-Verschoor 2006 Page 151 ff

[20] A wet lease is a leasing arrangement whereby one airline (lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to an airline (the lessee), which pays by hours operated.


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liability regimes international transportation deficiencies achievements



Title: The Liability Regimes in International Air Transportation