Saturday, 7 February 2015

Flight MH370: A few clarifications on the notions of “accident”, “missing aircraft”, “liability” and their legal implications

The Malaysian government has officially declared the disappearance of flight MH370 an “accident” under Annex 13 to the Chicago Convention. It was reported that such statement aims at facilitating compensation of the families of victims. In law, it is not unusual to use the same terms with different meanings in different context. Such is the case of the term “accident” as used in accident and incident investigation, and in airline liability. The above Malaysian declaration causes confusion and raises questions.

Accident investigation

The term “accident” for the purpose of accident and incident investigation is defined in Annex 13 to the 1944 Chicago Convention on international aviation, which elaborates on Arts 26 and 37(k) of the Convention. The aim of Annex 13 is to establish standards and recommended practices, i.e. technical rules and procedures, for the purpose of official inquiries (investigations) into occurrences associated with the safe operation of aircraft, which led or could have led to injuries or death of persons or property damages.

An “accident” under Annex 13 is
an occurrence associated with the operation of an aircraft which takes place between the time any person boards the aircraft with the intention of flight until such time as all such persons have disembarked, in which […] c) the aircraft is missing or is completely inaccessible”.
The Annex clarifies that
an aircraft is considered missing when the official search has been terminated and the wreckage has not been located”.
However, the Malaysian government has stated that the search has not been terminated and will go on.

Moreover, concerning the investigation of accidents that occurred over the High Seas, which are outside the territory of any State, Annex 13 obliges the State of registry of the aircraft to publish a preliminary as well as a final report on the causes of the accident. Malaysian authorities have released a preliminary report on the occurrence already since May 2014, which means that the Malaysian Government had already tacitly declared the disappearance of flight MH370 an accident.

To the rest, particularly important is Standard 3.1 of Annex 13, which makes clear that the sole objective of the investigation is the prevention of similar occurrences in the future, not to apportion blame or liability (emphasis added).

Airline passenger liability

Concerning airline passenger liability in international aviation, the pertinent rules can be found in special international conventions, known as the Warsaw System, which refers to the 1929 Warsaw Convention and its amendments, and the 1999 Montreal Convention, which has replaced the Warsaw System. Under both instruments, airline passenger liability is triggered, when an “accident” occurs.

Although the definition of “accident” has been left to the courts of the Member States, its basic elements are uniform across the globe. An “accident” is
“an unexpected or unusual event or happening, external to the passenger”.
In other words, any sudden occurrence unrelated to the specific passenger can be an “accident”, including acts of other passengers and terrorist acts. This does not mean that the airline is left without defenses; however, failure to invoke and prove such defenses confirms its duty to compensate the passengers.

The exact legal instrument applicable on the case, 1929 Warsaw Convention as amended or 1999 Montreal Convention, depends on the most recent instrument ratified by both the State of the place of departure and the State of the final destination of the flight, as these places are indicated on the ticket. Since the flight took off from Kuala Lumpur destined for Beijing, and both Malaysia and China have ratified the 1999 Montreal Convention, we can assume that the MC will mostly apply.

The MC foresees a duty of advance payments to passengers’ families in case of an accident. Such payments have already been paid by Malaysian Airlines’ insurers.

Combining “accidents”

As we can see, an “accident” under Annex 13 has a different meaning and objective than an “accident” under the Warsaw System and the 1999 Montreal Convention. Moreover, the events that followed the disappearance of flight MH370 did not necessitate an official declaration of “accident”. So, what’s the point in doing this?

It seems that to declare an “accident” serves rather political than legal purposes. The Malaysian government has been heavily criticized for its handling of aviation issues, not only regarding flight MH370, but also concerning the more recent accident of Air Asia flight 8501. It is likely that Malaysian authorities believed that to declare flight MH370 an “accident” would be a good way to ventilate some pressure, because it appears to raise the last formal barrier to initiating trials of the victims’ families against the airline.

Yet such move has also more subtle implications.

First, under the Montreal Convention the air carrier liability is two-tiered. In the first tier, the carrier bears strict liability, i.e. liability independent of fault, up to 123,100.00 SDR (~ 153,513.28 € or 173,546.74 USD). In the second tier, the carrier bears unlimited liability for presumed fault, which means that it has to prove that it took all reasonable measures to prevent the accident. The burden of proof in the second tier lies with the carrier. When not even a single piece of wreckage has been found, let alone the Cockpit Voice Recorder and the Flight Data Recorder, the exact cause of the accident cannot be determined and so the airline cannot evoke and prove any exculpatory reason. Therefore, the airline bears unlimited liability.

Second, legal attention is directed from the Malaysian State, including its Air Traffic Control system (ATC), to the airline. It is possible, although not very unlikely, that factors related to the ATC contributed to the accident. Liability in such cases is usually part of State civil liability, which is almost always dependent on fault – claimants have to prove negligence related to specific acts or omissions of the ATC to receive compensation. Since no negligence can be proven, the Malaysian State is practically relieved from providing compensation, at least for the time being. The fact that Malaysian airlines is state owned does not change this fact, because in practice compensation will be paid by the airline’s insurers.

The above legal results are produced irrespective of the real intentions of the Malaysian government. Yet, the most plausible approach seems to be that the Malaysian government simply wanted to alleviate the pressure accumulated through the recent accidents.

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