wala conference, ciudad real, 18/19 may 2009 damages to third parties on the surface update of rome...

WALA Conference, Ciudad Real, 18/19 May 2009Damages to third parties on the surfaceUpdate of Rome Convention

Heinz Dillmann Vice PresidentSpecial Legal AssignmentsFraport AG

H. Dillmann, WALA Conference Ciudad Real, 18/19 May 2009

When did the revision of the Rome Convention start?

ICAO started in 2000 to revise the Rome Convention of 1952.

9/11 accelerated the considerations.

A special group of the ICAO Council elaborated a concept for twonew conventions.


How did the ICAO Legal Committee in early 2008handle the concept?

It drafted

• a convention on compensation for damage to third partiesresulting from acts of unlawful interference involving aircraft(unlawful interference convention) after very controversial discussions

• a convention on compensation for damage caused by aircraft to third parties (general risks convention) after nearly nodiscussion


Unlawful Interference Convention as drafted by ICAO Legal Committee

What is the scope of the convention?

Who is the addressee of the claims of the victims on the surface?

Where can those claims be made?

Is there limited or unlimited liability of the airline?

How to handle big damages going beyond the financial capability of an airline?

Do victims always get full compensation?

Are those who have to pay entitled to take recourse, for example against an airport?


What is the Scope of the convention?

Applicable if on an international flight damage occurs in the territory of a state party.

If the damage occurs in the territory of a non-state party, the convention applies if the airline comes from a state which is a state party.

Domestic flights are only covered if a state party opts in.


Who is the addressee of the claims of the victims on the surface?

Exclusive remedy: The victims can only address the airline the aircraft of which was grounded by terrorists


Where can those claims be made?

No forum shopping

Claims only before the courts of the state where the damage occured provided that this state is party to the convention.

If aircraft is grounded above the high seas claims are to be made at the courts of the state where the aircraft is registered.


Is there limited or unlimited liability of the airline?

Airline is to take over strict liability.

Liability is limited up to a maximum of 700 million special drawing rights, called SDR (784 million Euro) depending on the maximum mass of the aircraft (first layer).


How to handle big damages going beyond the financial capability of an airline?

International fund to be established by the state parties.

Fund will pay additional compensation up to 3 billion SDR (3.36 billion Euro) as a second layer.

Fund will not be feeded by the states, but by contributions from passengers and freight forwarders.


Do victims always get full compensation?

Only in case the senior management of the airline has contributed by an act or omission done at least recklessly and with knowledge that damage would probably result it has to compensate damage beyond 3.7 billion SDR (third layer).

Senior management will be presumed not to have been reckless if it proves that it complied with applicable regulatory requirements.

If a servant or agent has contributed to the event the airline does not have to pay the third layer if senior management properly selected the servant or agent.


Are those who have to pay entitled to take recourse, for example against an airport?

Airline can take recourse even if only an airport employee has acted or omitted with negligence when providing security measures

Recourse is limited to the amount which could reasonably have been covered by insurance.

Recourse by the fund only against the airline under narrow conditions.

No recourse by the fund against airports.


General Risks Convention as drafted by ICAO Legal Committee

Convention applies to international flights. Opt-in for domestic flights.

Airline enjoys a liability limitation up to 700 million SDR.

Condition: Airline proves that damage did not result from its negligence or that of its servants or agents.

Exclusive remedy: Victims on the surface may only bring action for compensation against the airline or its servants or agents

Claims only at the courts of the state party where the damage occurred.

Unlimited right of recourse against airports if they contributed to the event at least with negligence


What happened to the drafts elaborated by the ICAO Legal Committee?

ICAO Council on 23 June, 2008, decided to submit them to a diplomatic conference in Montreal from 20 April to 2 May 2009.


Did the aviation industry including ACI propose amendments?

Aviation industry presented position paper before the diplomatic conference.


What were the key elements of the position paper?

• Domestic flights should be included

• Compensation for mental injury should be excluded

• Transit and transfer passengers should not contribute twice to the fund

• Cap on strict liability of the airline should also apply, i. e. third layer of compensation should not be triggered if not the senior management but an employee or agent has contributed to the disaster

• More precise definition of reasonable insurance required


Did the diplomatic conference pick up these proposals?

Only a few proposals were picked up

• transit and transfer passengers shall not contribute twice to the fund

• recourse basically limited to what could have been covered by insurance available on a commercially reasonable basis


What are the other most important amendmentsmade by the conference?

• Contributions to the fund shall reach a volume of 3 billion SDRwithin four years

• State parties have to ensure that airlines collect and remit the contributions to the fund


Are there even more amendments?

• Airline has to pay compensation beyond 3.7 billion SDR (third layer) even if an employee of the airline has contributed to the disaster at least recklessly and with knowledge that damage would probably result

• However, airline is not liable for such an act of its employee if it proves that an appropriate system for selection and monitoring of its employees has been established

• The senior management of the airline shall be presumed not to have been reckless if it proves that it has established and implemented a system to comply with ICAO Annex 17 (security)


Last but not least?

Also the fund shall have a right of recourse against an airport if it acted or omitted at least with negligence.

Any recourse of the airline and/or the fund against an airport is basically limited to the amount which could have been covered by insurance available on a commercially reasonable basis.

However, in case of a recourse of the fund this cap is broken if the airport has contributed to the event by an act or omission done at least recklessly and with knowledge that damage would probably result.


When do the conventions enter into force?

The unlawful interference convention enters into force 180 days after deposit of the 35th instrument of ratification provided that the total number of passengers departing in the previous year from the ratifying states is at least 750 million.

The general risks convention enters into force 60 days following the deposition of the 35th instrument of ratification.


Can airports be happy with the result?

Final answer can only be given after deep analysis by the aviation industry.

As regards recourse by the fund the conference allowed airlines but not airports to prove that their senior management did not act recklessly or that they properly selected a reckless employee.

Providing security is a core state obligation.

Nevertheless, the states hand over more and more responsibility to airlines and airports even if they have private shareholders.

The revision of the Rome Convention shows that this has consequences when it comes to liability for damages.

wala conference, ciudad real, 18/19 may 2009 damages to third parties on the surface update of rome...

Documents

wala conference ciudad

rome convention

state parties

nonstate party

international flight

additional compensation

unlimited liability

forum shopping claims