Amendments to aviation liability legislation

23 August 2012 Topics: Insurance

The Aviation Legislation Amendment (Liability and Insurance) Bill received its second reading speech on 22 August 2012 and addresses issues raised in the Federal Government’s 2009 Aviation White Paper. For our discussion of the White Paper please click here.

What will change?

Specifically the Bill amends the carriers’ liability legislation by:

  1. increasing the cap on domestic carriers’ liability for passenger death or injury on domestic flights from $500,000 to $725,000
  2. increasing the minimum amount of mandatory insurance required to be held by a domestic carrier from $500,000 to $725,000 for domestic flights
  3. replacing references to ‘Montreal Protocol Number Four’ with ‘1999 Montreal Convention’.

The liability cap of $500,000 was set in 1994 and the 45% increase is to reflect the changes in the consumer price index since that time. The minimum insurance required by the carrier has also been adjusted accordingly.

The Bill also harmonises a significant area of inconsistency between the treatment of liability for mental injuries under the Australian legislation and the 1999 Montreal Convention. By replacing the domestic carrier’s liability for ‘personal injury’ with a liability for ‘bodily injury’, domestic carriers will only become liable for mental injuries if they are causally connected with a physical injury. This will bring Australian domestic law in line with the international conventions by excluding claims for pure mental injuries.

Claims for pure mental injuries will also be excluded under the Damage by Aircraft Act 1999 (Cth) (DBA Act). This will provide some relief to carriers or owners of aircraft who could have been strictly liable to people who have witnessed accidents from afar.

Further, the Bill provides that in relation to claims brought under the DBA Act, defendant owners or operators will be allowed to:

  1. reduce their liability where the victim was partially responsible for the damage (in the NSW Court of Appeal decision in ACQ Pty Ltd v Cook [2008] NSWCA 161, the Court held that the defence of contributory negligence was unavailable in claims under the DBA Act)
  2. seek contribution from third party tortfeasors who may have contributed to the damage.

On current information we have obtained, the Bill is likely to be enacted by the end of the year.

Should you want any further information or to discuss these changes, please contact Kevin Bartlett on (07) 3231 2496.

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