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Certain Aspects of Insurance and Liability with Respect to Passengers in Air Carriage*
Published online by Cambridge University Press: 21 May 2009
Extract
Eloquent evidence exists of the special importance of aviation accident insurance. Although air transport has gradually obtained its place under the normal means of conveyance—in international passenger transport perhaps even the first place—it still carries the odium of being more hazardous than surface transport. A comparison of the annual accident statistics for air carriers, railroads and inter-city buses up to a few years ago, shows that the number of passenger lives lost per passenger mile travelled by scheduled airlines has always exceeded the number of lives lost per passenger mile travelled on the railroads. Notwithstanding the considerably increased safety factor of air travel, the aircraft from its very nature provides a risk which in itself is much more serious than that of other means of transport. It may be that statistics show that accidents in road traffic are more numerous than those in air traffic—this on a comparable basis—but air traffic throughout the years shows by comparison more death casualties.
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References
1. Convention for the Unification of Certain Rules Relating to Damage Caused by Aircraft to Third Parties on the Surface. Rome 1933.
2. Belgium, Brazil, Guatemala, Roumania, Spain.
3. Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw, October 12th, 1929. The convention had on January 1st, 1952 more than sixty ratifications. It was followed by The Hague Protocol, a revision of the Warsaw Convention, accepted and undersigned by representatives of twenty-five states at The Hague on September 28th, 1955. This Protocol has received twenty-two ratifications. Thirty ratifications are necessary for its coming into force.
4. ICAO doc. 6031 LC/129.
5. Article 11 deals with the extent of the liability, which is a limited one and varies according to the weight of the respective aircraft.
6. Honig, J. P., Nederlands Juristenblad 17 mei 1952, no. 20, pp. 421Google Scholar et seq. Sauveplanne, J. G., Luchtvaartverzekering (1949), pp. 144Google Scholar et seq. Lemoine, M., Traité du Droit Aérien (Paris 1947), no. 708.Google Scholar See also notes 25, 20 and 60 infra.
7. A different point of view had been put forward among others by Goff, Le and Le Goff, Davin. M., Traité Théorique et Pratique de Droit Aérien (Paris 1934), no. 1374.Google Scholar
G. E. Davin, Transport Aérien, Responsabilités et Assurances, p. 234 (Liège 1938).
8. Many carriers already carry so called automatic insurance policies. These provide an indemnification for their passengers for the damage, personal and otherwise, sustained by them to a maximum amount as stated in the policy (generally the limits of Warsaw) and upon condition that the beneficiary waives his right of action against the carrier.
9. See Honig, , supra note 6, p. 422.Google Scholar
10. Doc. 31, International Institute for the Unification of Private Law.
11. Art. 2, par. 2 (a) of the Convention.
12. See Lemoine, M. in Inter Avia (1952), Vol. VII, no. 9, p. 513.Google Scholar
13. Art. 2. par. 3: The registered owner of the aircraft shall be presumed to be the operator and shall be liable as such, unless in the proceedings for the determination of his liability, he proves that some other person was the operator and, in so far as legal procedures permit, takes appropriate measures to make that other person a party in the proceedings.
14. Supra note 10. Passage concerned: “The owner or any person who is entitled to and has the use of a vehicle shall effect a civil liability insurance covering damages caused to third parties (injury to persons and damage to property) by the vehicle in a state of circulation”.
15. Supra 4.
16. See Art. 16, par. 5, no. 1 of the Convention.
17. See Citeja Doc. no. 85.
18. See Citeja Doc. no. 252. Also proposed at the Brussels Convention of 1938 (Brussels Protocol).
19. Codice della Navigazione of 1942. Art. 1015. Translation in English by Monta (Milano 1958): Code of Navigation.
20. Belgium, Brazil, Egypt, Austria, Switzerland.
Under Dutch law a right of direct action would necessitate special stipulations, such right not fitting in the frame of common Dutch law, cf. Sauveplanne, , supra 6, pp. 146, 147.Google Scholar
21. E.g. Belgium, Denmark, Iceland, Sweden. See infra 24.
22. Argentine, Brazil, Canada (See Air Transport Board Order no. 11/54), See infra 24.
23. Australia, South Africa, Nicaragua, Denmark, Iceland, India, Iraq, Ireland, New Zealand, Norway, Sweden, U.K.
Australia, Canada, South Africa and Nicaragua have implemented the provision concerned, whereas the other mentioned states do not require insurance. In a few states of the U.S.A. insurance is required; others have indicated the possibility of a later provision for compulsory insurance in their legislation, whereas still others have no legislative provisions. See infra 24.
24. Pakistan, Finland, Israel, Philippines and Netherlands.
The Netherlands main carrier K.L.M. however, carries insurance against all risks of damages inflicted to persons and goods in exercising the air transportation business, such by virtue of an agreement between the airline and the state. Foreign carriers carry insurance against third parties as a condition of the acquisition of their permit.
25. See Memorandum submitted to the Inter Agency Group on International Aviation, in support of U.S. ratification of the Protocol signed at The Hague on September 28, 1955, to amend the Convention for Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on October 12th, 1929. By Peter Sand (University of California at Berkeley) 1961, p. 8.
26. See “The Sweeney Report”. Report to the Association of the Bar of the City of New York of the Subcommittee of the Warsaw Convention, adopted and approved by the Committee of Aeronautics on May 9th, 1950, and published by the CAA in 1951.
27. Codice della Navigazione, Art. 941 and 996. Supra note 19.
28. Supra 19, Art. 996 et seq.
29. Supra 25, p. 9.
30. Dutch air law does not impose any obligation on the carrier to take out insurance for passenger risks. However, under agreement with the Dutch Government K.L.M. is obliged to cover the possible risks of damage caused to persons and goods. Provisions imposing on the company (or on other Dutch air carriers) an obligation to provide for automatic insurance do not exist.
31. An important form of transport not included in the convention is charter transport. This is due to the compulsory form of the, by the convention exactly prescribed passenger tickets and airway bills, which are in general not suitable for charter transport. However, carriers who apply themselves to the transport of groups of passengers in charter, often seek ways to cope with these requirements of the convention in order to invoke its limitation of carriers' liability. To fill this deficiency the ICAO Legal Committee drafted a convention supplementary to the Warsaw Convention, which was signed at Guadalajara on September 18th, 1961. See ICAO Doc. 8181.
32. Among others, Nationalist and Red China, several South American and Middle-East countries and Austria in Europe.
33. Such decided by an English court in Grein v. Imperial Airways Ltd. (1937) 1 K.B. 50, p. 69 and by a U.S. court in Ritts v. American Overseas Airlines. 1949 U.S. Av. 65, p. 70 and by an Italian court in Palleroni v. S.A. di Navigazione Aerea (1939) Revue Générale de Droit Aérien, P. 309.
34. Warsaw Convention, Art. 21 and 20.
35. See Calkins, G. Nathan. The cause of action under the Warsaw Convention. J.A.L.C. Vol. 26 (1959), p. 217 et seq.Google Scholar
36. This is also the Dutch point of view; of: D. Goedhuis—National Airlegislations and the Warsaw Convention (The Hague 1937), pp. 46 seq. and 270/271.
37. In the British and Dutch air transport acts the persons who have a right of action are expressis verbis defined.
38. See A. B. Rosevaer Q.C. Federal Acts Relating to Fatal Accidents in Canada, in papers presented at the Annual Meeting of The Canadian Bar Association—Winnipeg 1961.
39. See H. Drion—Limitation of Liabilities in International Air Law, (Nijhoff—The Hague, 1954), p. 126.
40. The Dutch air transport act deviates from the treaty in so far as its regulation of damage caused by delay is concerned. It moreover provides for regulation of some minor topics not elaborated by the treaty.
41. U.K.: British Carriage by Air Act 1961. Australia: An act relating to carriage by air 1959.
42. According to ICAO doc. 7450—Lc 136, Vol. II, Annex VI, Appendix VII of the Ninth Session of the Legal Committee in 1953 the following countries at that time had their own, after them mentioned limits of liability:
The amounts are mentioned here in dollars according to the currency rates of the national money units at that time. Several of them may have been changed in the meantime (for the Netherlands now the Treaty's limit of 125.000 francs— ± Nfl. 31.500).
43. Supra Chapter II and infra p. 387.
44. Ranging from $15,000. till $25,000. with the exception of the state of Alaska, where the limit is $50,000.
45. This divergency of views in the U.S.A. was responsible for the fact that the U.S. delegates at the Hague Conference were in favour of a much wider limit than that of $16, 586. as is now provided for by the Hague Protocol. On the other hand by not opposing this doubling of the Warsaw limits the delegates of the other countries were making what they regarded a generous concession to U.S. and Canadian views.
See Calkins, , The Hague Protocol (1953) J.A.L.C., Vol. 26, p. 263 et seq.Google Scholar
46. Blumenthal et al. v. U.S. (i960) 7 Avi. 17 181.
47. Floyd G. Affolder v. N.Y., Chicago and St. Louis Railroad Company. 339 U.S. 96–102 (1950).
48. KLM v. Tuller (1961) 7 Avi. 17 544.
49. (1953) J.A.L.C. Vol. 26, p. 272. Paul Reiber. Ratification of the Hague Protocol.
50. The doctrine of “res ipsa loquitur” is dependant on the absence of explanation and is invoked when the harm is of such a kind that it does not ordinarily happen if proper care is being taken and the instrumentality causing the accident is within the exclusive control of the defendant. See Street, H., The Law of Torts (Butterworth and Company, Ltd., London) 2nd ed. pp. 134 and 135Google Scholar
51. Attorney's fees have been 50% of the recovery so consistently that the rules of the Courts of New York per January 1st, 1957, have been amended, limiting the fees for recovery to approximately 33%. When the plaintiff wins $25,000. it would mean a fee of $8,500. and with the other costs of litigation which can conservatively be estimated to be $2,000. in cases of this kind, the plaintiff's net amount would be $14,500., which is less than the Hague Protocol limit.
52. During the past few years several European airline companies proceeded to the purchase of a so-called “Single Limit Policy”. With regard to passengers' insurance: that kind of policy only knows one maximum, which is very high, for instance $500,000. or higher. This maximum provided for in the policy concerned covers the passengers as well as the plane (hull insurance).
For larger amounts, so-called umbrella policies are taken out in different so-called “layers”, each of which exceeds the former in amount. These “umbrella policies” cover all forms of legal responsibility of the carrier, of which, of course, the most important are those concerning third parties and passengers.
53. Supra Note 19.
54. Brazil is one of these countries where air transport in several cases means the only connection of a place with the outside world and where notwithstanding the presence of more than 25 foreign insurance companies, the prospective passenger may find it impossible to buy flight insurance in some places. It is second to the U.S.A. in the field of sport aviation (in 1952 more than 1900 little aircraft had been registered) and it has several air transport companies. Its Tratado de Direito Mercantil Brasiliano imposes on everyone who undertakes to carry goods, to bring them safe to the place of destination and a similar contractual responsability exists with respect to passengers.
See François, J. L.. Assurances Aériennes au Brasil. Revue Général de l'Air (1952) Vol. 15 p. 202 et seq.Google Scholar
55. See Logan, George in J.A.L.C. (1942) Vol. 13, p. 20.Google Scholar
56. See J.A.L.C. (1952) Vol. 19 p. 317 et seq.Google Scholar
57. See J.A.L.C. (1942) Vol. 13 p. 281 et seq. See also Drion, p. 289 et seq., supra note 39.Google Scholar
58. For an early opinion see the judgement of the French Cour de Cassation of May 12, 1930 (Gazette du Palais 1930–2–118). Lemoine no. 708—Supra 6.
59. Revue General de L'Air (1950) Vol. 13, p. 3.Google Scholar
60. Revue Général de l'Air, (1954) Vol. 17 p. 136.Google Scholar
61. In several countries however the amount to which one can take out personal insurance is limited; e.g. in the U.S.A. it is only possible to buy accident insurance to an amount of $ 62.500 if through vending machines.
In Germany it is forbidden to take out more accident insurance than D.M. 100.000 for death and D.M. 200.000 for permanent disability.
62. A popular advertising slogan in the U.S.A. to stress the low tariffs of air transport reads: “From the vice-president to the typist!” A system of unlimited liability however forces the carrier to secure himself against claims from the high salaried vice-president as well as from the low paid typist. This security cannot be but negotiated in the price of the ticket, which is one and the same for high paid and low paid passengers. Thus the typist pays part of the possible claim from the vice-president.
63. The problem how to define the precise amount of the limit is quite a complicated one and several factors as the average load factors and the number of airplanes in possession of the carrier should be of assistance.
64. See Wilberforce, R. O.: “Some recent developments in the law of aviation”. The Grotius Society (1949), Vol. 35, p. 73 et seq.Google Scholar
65. Supra 31.
66. See Drion, , supra note 39, p. 42.Google Scholar “If there is any field in which unification of the law on a world wide basis would be impropriate, it is the field of the amount of damages to be paid in case of death or injuries. For in few areas local views and circumstances of a social and economic character are of such importance”.