UBC Theses and Dissertations

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UBC Theses and Dissertations

Passenger liability of international air carriers O’Brien, John David 1974

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P A S S E N G E R L I A B I L I T Y O F I N T E R N A T I O N A L A I R C A R R I E R S by JOHN DAVID O'BRIEN B . B . A . , U n i v e r s i t y o f New B r u n s w i c k , 1971 L L . B . , U n i v e r s i t y o f New B r u n s w i c k , 1973 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUSINESS ADMINISTRATION i n the Depdrtment o f BUSI NESS ADMINIS TRATION We accept t h i s t h e s i s as conforming t o the r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA A u g u s t , 1974 In presenting t h i s thesis i n p a r t i a l f u l f i l m e n t of the requirements for an advanced degree at the University of B r i t i s h Columbia, I agree that the Library s h a l l make i t f r e e l y available for reference and study. I further agree that permission fo r extensive copying of t h i s thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It i s understood that copying or publication of t h i s thesis for f i n a n c i a l gain s h a l l not be allowed without my written permission. Department of B u s i n e s s A d m i n i s t r a t i o n The University of B r i t i s h Columbia Vancouver 8 , Canada Date A u g u s t 1 s t . 1 9 7 4 ABSTRACT The c i v i l l i a b i l i t y o f an a i r c a r r i e r f o r the death o r i n j u r y o f a passenger i n i n t e r n a t i o n a l f l i g h t i s l i m i t e d i n most cases by i n t e r n a t i o n a l agreement. T h i s maximum l i m i t a t i o n i s c o n t a i n e d i n the Warsaw C o n v e n t i o n , d r a f t e d i n 1929 to meet the needs o f the c a r r i e r s of t h a t p e r i o d . The i n e r t i a o f the s t a t u s quo has a l l o w e d the c o n t i n u e d e x i s t e n c e o f the l i m i t a t i o n , a s s i s t i n g to some degree the development o f the i n d u s t r y but at a s e r i o u s c o s t to the l e g i t i -mate r i g h t s o f the passengers o r t h e i r s u r v i v o r s . D i s c u s s i o n s o f the r o l e o f l i m i t e d l i a b i l i t y are c a r r i e d on by n a t i o n a l governments who must each balance the c o n f l i c t i n g i n t e r e s t s o f t h e i r c o u n t r y ' s c a r r i e r s and passengers. Disagreement has r e s u l t e d from the f a c t t h a t each s t a t e views an e q u i t a b l e balance i n d i f f e r e n t terms. T h i s has l e a d to a p a r t i a l breakdown o f uni form p r i v a t e a i r law as c o n -t a i n e d i n the C o n v e n t i o n ; the c r i t i c a l p a r t y , the U . S . , o p e r a t i n g o u t s i d e i t s ambit . A l though a l l c o u n t r i e s , aware o f the b e n e f i t o f uni form law i n these s i t u a -t i o n s , are committed to agreement they have been unable to reach consensus on the terms o f t h a t agreement. The U.S. l e f t the C o n v e n t i o n , then e s t a b l i s h e d an a n c i l -l a r y i n s t r u m e n t i n 1966, y e t i n the i n t e r v e n i n g p e r i o d the c o u n t r i e s have f a i l e d to f o r m u l a t e a new p l a n f o r uni form law i n t h i s a r e a . The t h e s i s o f t h i s paper i s t h a t l a c k o f consensus r e s u l t e d from the manner o f n e g o t i a t i o n . The d i s c u s s i o n r e v o l v e d around the a b s o l u t e l e v e l o f l i a b i l i t y l i m i t a t i o n and the p a r t i e s reached an impasse t y p i c a l of s i n g l e - i s s u e d e l i b e r a t i o n s A p o i n t i s reached beyond which the p a r t i e s cannot concede and s t i l l p r o t e c t t h e i r b a s i c i n t e r e s t s . In t h i s case t h a t p o i n t was reached b e f o r e a consensus. The o b j e c t o f the t h e s i s , t h e r e f o r e , i s to propose a m u l t i p o i n t "package" which i s d i r e c t e d a t g a i n i n g agreement from a l l p a r t i e s . The u l t i m a t e agreement i n t h i s s i t u a t i o n i s a f u n c t i o n o f the p o s i t i o n s and n e g o t i a t i n g s t r e n g t h o f the p a r t i e s so the proposal i s h e a v i l y weighted towards the U.S. s t a n d . A t the same t i m e , the m u l t i p o i n t aspect a l l o w s the n e g a t i v e e f f e c t s o f t h i s c o n c e s s i o n on the o t h e r n a t i o n s to be c o u n t e r b a l a n c e d by a n c i l l i a r y c o n d i t i o n s i n the p r o p o s a l . By broadening the f i e l d o f n e g o t i a t i o n , i t becomes p o s s i b l e to encompass the needs and means o f a l l p a r t i e s i n v o l v e d . The r e s u l t i s a n i n e - p o i n t p r o p o s a l which i s not h e l d out as being neces-s a r i l y j u s t o r even reasonable - these a r e r e l a t i v e v i r t u e s and the prime r e q u i r e -ment o f any p r o p o s a l here must be acceptance by the n a t i o n s . The data from which the proposal was developed i s assembled i n a chrono-l o g i c a l framework, t r a c i n g the course o f l i m i t e d l i a b i l i t y from 1929 t o d a t e . The d i s c u s s i o n s , agreements, and disagreements r e v e a l e d i n t h i s ev idence p r o v i d e the source o f the two p o i n t s o f the p r o p o s a l . The f i r s t being the c r i t i c i s m o f s i n g l e - i s s u e n e g o t i a t i o n and the s e c o n d , a package seen to be an a c c e p t a b l e s o l u t i o n to the problem. I t i s a g a i n s t t h i s data t h a t the t h e s i s must be t e s t e d ; s i n c e i t i s a s u b j e c t i v e d e c i s i o n the t e s t must be the c o n s i s t e n c y w i t h the evidence and the reasonableness o f the proposal i n l i g h t o f the f a c t s . TABLE OF CONTENTS Chapter One I n t r o d u c t i o n 1 Chapter Two Passenger L i a b i l i t y i n Canada 8 Chapter Three C r e a t i o n o f the Warsaw Convention 13 Chapter Four Hague P r o t o c o l 20 Chapter F i v e U.S. Withdrawal from Warsaw 28 Chapter S i x Montreal Agreement 37 Chapter Seven A b s o l u t e L i a b i l i t y 42 Chapter E i g h t Insurance 48 Chapter Nine Dual L i m i t s 57 Chapter Ten 1966 ICAO Montreal Meeting 61 Chapter Eleven The Guatemala C i t y P r o t o c o l 70 Chapter Twelve Proposal . 7 6 Chapter T h i r t e e n C o n c l u s i o n 88 Appendix A The Warsaw Convention 90 Appendix B The Hague P r o t o c o l 100 Appendix C The Montreal Agreement 104 Footnotes 1 0 6 B i b l i o g r a p h y 1 2 3 LIST OF TABLES Number T i t l e Pa^e 1 Passenger R e c o v e r i e s from U.S. C a r r i e r s 27a Warsaw and Non-Warsaw Cases (1950-1964) 2 D i s t r i b u t i o n o f Compensation S e t t l e m e n t s 27b F o l l o w i n g A i r T r a n s p o r t A c c i d e n t s (1965) Death and I n j u r y 3 Cause A t t r i b u t i o n o f U.S. Domestic J e t 44 Crashes (1959-1967) 4 L i a b i l i t y Insurance i n R e l a t i o n to Passenger 53 F a t a l i t i e s f o r U.S. Scheduled A i r l i n e s 5 L i a b i l i t y Insurance i n R e l a t i o n to Passenger 53 F a t a l i t i e s f o r Scheduled A i r l i n e s Outs ide o f the U.S. 6 Passenger L i a b i l i t y Insurance Costs f o r A i r - 55 l i n e s i n D i f f e r e n t C o u n t r i e s CHRONOLOGY OF EVENTS 1889 F i r s t I n t e r n a t i o n a l Conference on A i r Law - P a r i s 1925 F i r s t I n t e r n a t i o n a l Conference on P r i v a t e A i r Law - P a r i s 1929 Second I n t e r n a t i o n a l Conference on P r i v a t e A i r Law - Warsaw 1933 Warsaw Convention becomes e f f e c t i v e 1955 The Hague P r o t o c o l 1965 U.S. f i l e s N o t i c e o f D e n u n c i a t i o n o f the Warsaw Convention 1966 (Feb.) ICAO Montreal Meeting 1966 (May 13) U.S. withdraws the N o t i c e o f D e n u n c i a t i o n 1971 The Guatemala C i t y P r o t o c o l K p a i f l ^ f i o ' i i ^ S ' S S . v - an ultimate destination or stoJPnTcountry other than the countr of d " " S U b , * C t , 0 ^ R e S U ' a t i ° n S 71*1 ? ? . a . p 5 i . i £ a A l e ? n ? t h e Convention governs and in most cases limits the >:-°r.JL. Jt n.,J-C. 0. unl ry° departure the Warsaw Convention of 1. As usad in this contract "ticket" means this passenger ticket and baqqaae check of whitfi these conditions and the notices form part, "carriage" is equivalent to ^ranworla-tion".-"carrier" means all air carriers thai carry or undertake to carry the passenga or his 2. Carriage hereunder ii subject to the rules and limitations relating to liability estab-d e f i n t d b 0 » h t n a V c r o T . n C t ? o n n * n " ° n U n < " * S U ° h " n < " " i n , , r n a ' i o n i " « " * 9 « " a . 3. To the extent not in conllict with the foregoing carriage and other services performed by each carrier are subject to: (I) provisions contained in this ticket (II) applicable tariffs (111) e w e r ' s conditions of carriage and related regulations which a e made pa t he elf (and are available on application.it the offices of carrier) exceptin transportation between a place-in the United States or Canada and any place outside thereoftc"wS tariff"" force in those countries apply. V.. Carrier's name may be abbreviated in the ticket, the full name and its abbreviation being Set forth in carrier's tariffs, conditions of carriage, regulations or timelabes! car-rier's address shall be the airport of departure shown-IppofiUthf °st abbrev ati'on of carrier's name in the ticket; the agreed stopping places are those places set forth In this ticket or as shown in carriers timetables as scheduled stooping places on the oassVnoir* route; carriage to be performed herwnd^ by several s u c ? e « ? v e only a *i"saagentrier ' $ s u i n 9 a , i c k e t , o r c a r r i a S e o v e r , h e l i n e » of another air carrier does so CONDITIONS OF CONTRACT „. . y e x c l u s o n or limitation of liability of carrier shall apply to and be for the benefit of agents, servants and representatives of carrier and any person whose aircraft is used bv carrier for carriage and its agents, servants and representatives a„J;n C**nn?tbaS9a9e W i " . b 9 d f l i v e ' « d <o bearer of the baggage check. In case of dam-toJ?,^T^m',?9 h" ' n , e r n a , ' ° n a ' transportation complaint must be made in writing !° lVJLjf^wt 3 e, d ' ! c o v e r v 0 1 damage and, at the latest, within 7 days from receipt-in case of delay, complaint must be made within 21 davs from Hato i h » h / n n , n . ,J>.*lL livered. See tariff, or condition, of carriage regarding nonJinternatio^ 8. This ticket is good for carriage for one year from date of issue excect as othorwiut provided in this ticket, in carrier's tariffs, conditions of carriage o7 related'-eouUMonsT^ fare for carriage hereunder is subject to change prior to commln'cement of carriaoe Srriet may refuse transportation if the applicable fare has not been paid Carrier ^ o n a ^ e t s p a l ^ n 0 , ? a ' i 2 , i h . i s - a y without notice substitute ^ £ ^ V ™ reasonable dispatch. Times shown in t cfaf? a and may a°l°e7 o f o m i f stoppTng places'shown In ftHckeU S c ^ d u l e s ^ e subject to change without notice Carrier assies no responsibility fir « . h f ; P a a 5 « n 9 8 ' shall comply with Government travel requirements, present exit entry and other required documents and arrive at airport by time fixed bv carrier or if no t m « early enough to complete departure procedures. ' 11. No agent, servant or representative of carrier has authority to alter modifv or waive any provision of this contract. 7 "'uuny or waive CARRIER RESERVES THE RIGHT 10 REFUSE CARRIAGE TO ANT PERSON WHO HAS ACQUIRED A TICKET Iff VIOLATION OF APPLICABLE LAW OR CARRIER'S CARRIER'S TARIFFS RULES OR REGULATIONS. Pases ADVICE TO INTERNATIONAL PASSENGERS O N LIMITATION OF LIABILITY Passengers on a journey involving an ultimate destination or a stop in a country other than the count™ of ™ n advised that the provisions of a treaty known as the Warsaw Convention may be applicable to the entire Z ! ;" 8. V any portion entirely within the country of origin or destination. For such passengers on a iournevto ftZ J . agreed stopping place in the United States of America, the Convention and special c on t r iu of rlrlilZ I Z A applicable tariffs provide that the liability of certain carriers parties to such special contort, fLZlT r "! injury to passengers is limited in most cases to proven damans not to exceed U S n n n n ' r n L °l PuerS°"al liability up to such limit shall not depend on negligence on the part of the carrier ' Thl'limit Z f w^VJc 1 ™ above is inclusive of legal fees and costs except that in case of a claim brought in » L T I L h • I ', separate award of legal fees and costs, the limit shall be the sum of U S $58 000 «H,.«ivI i r Z .r prOV,*lon 1S ™ade foLr passengers travelling by a carrier not a party to such special contracts or on ^ ^ 1 , ™ ™ „ « ? , r u ^ stopping place in the United States of America, liability of the carrier for death personal in" t °' ^ r • in most cases to approximately U.S. $10,000 or U.S. $20,000. m J U r y p a S S e n g e r S , S h m i t e d The names of carriers, parties to such special contracts, 'are available at all ticket offices of such carrier, -mH m*v examined on request. S U C f l c a r r , e r s a n d  mW be Additional protection can usually be obtained by purchasing insurance from a private company Surh i „ c l i r ! . n r p i= „ „ , affected by any limitation of the carrier's liability under the Warsaw Convention or such special contrlcts of r For further information please consult your airline or insurance company representative CHAPTER ONE INTRODUCTION SITUATION The y e a r was 1929 - L indbergh had j u s t f lown the A t l a n t i c , the s i x -passenger 150 mph Lockheed Vega was the most p o p u l a r a i r c r a f t and the l e a d i n g i s s u e was whether the f u t u r e o f a v i a t i o n l a y w i t h l i g h t e r o r h e a v i e r than a i r v e h i c l e s . This was a l s o the y e a r t h a t n a t i o n s engaged i n a i r t r a n s p o r t gathered i n Warsaw, Poland to s i g n an inst rument t h a t would d e f i n e r e l a t i o n s between passengers and a i r c a r r i e r s i n the 1970s. A i r c a r r i e r s as a p a r t i c i p a n t i n s o c i e t y are l i a b l e f o r the e f f e c t s o f t h e i r a c t i o n s upon those w i t h which they come i n c o n t a c t . One o f t h e i r most important "contacts" are the passengers and a duty e x i s t s i n r e f e r e n c e t o ^ t h i s group - t o c a r r y them s a f e l y to t h e i r agreed d e s t i n a t i o n . The c a r r i e r sometimes f a i l s t o f u l f i l l t h i s duty and a l i a b i l i t y a r i s e s . The inst rument s i g n e d i n 1929 and t h i s paper deal w i t h t h a t l i a b i l i t y which r e g r e t t a b l y r e -mains an important i s s u e i n a i r t r a n s p o r t a t i o n . The l i a b i l i t y spoken o f r e l a t e s to c i v i l l i a b i l i t y t o the passenger o r h i s s u r v i v o r s f o r death o r i n j u r y s u f f e r e d i n i n t e r n a t i o n a l f l i g h t . I t d e a l s w i t h the r i g h t s o f p a r t i e s i n t e r se and not w i t h c r i m i n a l r e s p o n s i b i l i t y which p r o t e c t s the r i g h t s o f s o c i e t y as a whole. The i n s t r u m e n t was e n t i t l e d "The Warsaw Convent ion", i t a p p l i e d o n l y to i n t e r n a t i o n a l f l i g h t and i t s c e n t r a l p r o v i s i o n was a maximum l i m i t a t i o n on the c a r r i e r s ' l i a b i l i t y f o r the death o r i n j u r y o f a passenger. The Convention was i n response to the needs o f t h a t p e r i o d but i n c o n t i n u e s i n f o r c e today because o f the i n e r t i a o f the s t a t u s quo. An i n d u s t r y has grown up w i t h l i m i t e d l i a b i l i t y as an i n t e g r a l element and i t s removal i s viewed to v a r y i n g e x t e n t s as harmful and d i s r u p t i v e ; c o u n t e r i n g t h i s i s the c o n t i n u i n g impairment o f the l e g i t i m a t e r i g h t s o f the passenger. The key p a r t i c i p a n t s i n the debate o f the r o l e o f the Warsaw Convention i n the present i n d u s t r y , are the n a t i o n a l governments o f each s t a t e charged w i t h b a l a n c i n g the c o n f l i c t i n g i n t e r e s t s o f the c a r r i e r and passengers . The p o s i t i o n taken by each n a t i o n on l i m i t e d l i a b i l i t y i s based on t h e i r view o f the p a r t i c u l a r needs o f t h e i r passengers and c a r r i e r s . T h i s p o s i t i o n i s then converted i n t o a degree o f i n f l u e n c e i n the n e g o t i a t i o n s based on power w i t h i n the i n t e r n a t i o n a l community and more i m p o r t a n t l y on the a b i l i t y o f t h a t country to e l e c t the a l t e r n a t i v e ( i . e . operate o u t s i d e an i n t e r n a t i o n a l agreement to the d e t r i m e n t o f the o t h e r n a t i o n s ) . The c e n t r a l f i g u r e , on the b a s i s o f these two f a c t o r s i s the U n i t e d S t a t e s . Not o n l y have they the a b i l i t y to u n i l a t e r a l l y determine the f u t u r e o f any i n t e r n a t i o n a l agreement, i n c l u d i n g the Warsaw C o n v e n t i o n , but they hold the most unacceptable views on l i m i t e d l i a b i l i t y i n the eyes o f the o t h e r n a t i o n s . The Convention has been adapted on the b a s i s of e x p e r i e n c e and changing needs but a very c r i t i c a l impasse has been d e v e l o p i n g over the past decade. I t i s a c l a s s i c t r a d e - o f f s i t u a t i o n where the s a t i s f a c t i o n o f c a r r i e r needs i s at the expense o f the passenger and v i c e v e r s a . Adding to the c o m p l e x i t y i s the d e v e l o p e d / l e s s e r - d e v e l o p e d country r e l a t i o n s h i p which i s growing r a p i d l y i n s i g n i f i c a n c e . The U.S. on the b a s i s o f i t s p e r c e i v e d needs has p a r t i a l l y withdrawn from the Convention and the p o i n t i s approaching when a d e c i s i o n w i l l have to be made r e g a r d i n g i t s complete withdrawal o r p a r t i c i p a t i o n . Withdrawal would s p e l l c e r t a i n d e f e a t o f i n t e r n a t i o n a l agreement on passenger l i a b i l i t y and a s e r i o u s l o s s to both passenger and c a r r i e r . D e s p i t e whatever i n e q u i t i e s e i t h e r p a r t y sees i n the present agreement, i t i s t o t a l l y accepted t h a t a l l concerned would be i n a worse p o s i t i o n w i t h o u t i t . The nature o f the i n d u s t r y and passenger l i a b i l i t y both r u l e out t h e i r proper f u n c t i o n i n g i n the absence o f i n t e r n a t i o n a l agreement. T h i s problem w i l l be s e t out i n d e t a i l i n the paper as w i l l a proposal designed to b r i n g the p a r t i e s t o g e t h e r i n the nego-t i a t i o n s . THESIS The f o r m u l a t i o n o f t h i s s o l u t i o n i s the o b j e c t o f t h i s t h e s i s . I t i s d e r i v e d from i d e n t i f y i n g the b a s i c needs o f the passenger and c a r r i e r as p e r c e i v e d by i n d i v i d u a l s t a t e s and then t r a n s l a t i n g these many views i n t o one agreement,on the b a s i s o f n e g o t i a t i o n s t r e n g t h . The e f f e c t o f t h i s l a t t e r f a c t o r i s t h a t the proposal i s not held out as one t h a t i s n e c e s s a r i l y j u s t to the p a r t i e s o r reasonable to the a u t h o r . I t i s , however, what i s r e q u i r e d i n the s i t u a t i o n - a pragmatic s o l u t i o n , one t h a t aims s o l e l y at acceptance and having the n a t i o n s once again f u n c t i o n w i t h i n an i n t e r n a t i o n a l agreement. Using a c c e p t a b i l i t y as a y a r d s t i c k , many p l a n s were r e j e c t e d d e s p i t e whatever q u a l i t i e s they may have p o s s e s s e d . S t r o n g arguments c o u l d be made f o r u n l i m i t e d l i a b i l i t y o r no l i a b i l i t y at a l l , but they f a i l e d the t e s t o f a c c e p t a b i l i t y . Moreover, t o propose a "just" o r "reasonable" s o l u t i o n i s i m p o s s i b l e - they are r e l a t i v e a t t r i b u t e s which vary from country to country and s i t u a t i o n to s i t u a t i o n . C o i n c i d e n t w i t h a c c e p t a b i l i t y , however, the proposal can and does seek to i n c o r p o r a t e s u f f i c i e n t f l e x i b i l i t y to approximate the b a s i c needs o f the p a r t i e s i n v o l v e d . The t h e s i s o f the paper i s t h a t agreement i s p r e s e n t l y b l o c k e d by the nature o f the n e g o t i a t i o n s . To d a t e , they have l a r g e l y r e v o l v e d around the a b s o l u t e l e v e l o f l i m i t a t i o n and as can be expected o f s i n g l e p o i n t d i s c u s s i o n s , the s t r o n g e r p a r t y w i l l achieve the d e s i r e d r e s u l t a t the expense o f the weaker, i f i n f a c t , any agreement can be reached. T h e r e f o r e , the s o l u -t i o n i s c h a r a c t e r i z e d as a "package" - a m u l t i p o i n t proposal w i t h the pr imary goal o f a c c e p t a b i l i t y i n t h a t i t i s weighted h e a v i l y towards the views o f the c r i t i c a l p a r t y , the U.S. The m u l t i p o i n t a s p e c t , however, c o r r e c t s the f l a w which e x i s t s i n c u r r e c t n e g o t i a t i o n s , i t a l l o w s a n c i l l a r y f i e l d s o f d i s c u s -s i o n and compromise so t h a t acceptance i s encouraged as agreement i s not at the t o t a l expense o f the weaker p a r t y as i t has been i n the p a s t . The t h e s i s holds t h a t a c o n c e s s i o n to the U.S. on the major p o i n t o f l i a b i l i t y l i m i t can be combined w i t h o t h e r elements o f a package to c o u n t e r the n e g a t i v e e f f e c t s o f t h i s c o n c e s s i o n on the o t h e r n a t i o n s . T h i s encourages both the U.S. and the a r r a y o f o t h e r n a t i o n s t o move towards the m i d d l e , and agreement, from the extreme p o s i t i o n s they now h o l d . METHODOLOGY The data f o r the t h e s i s i s presented i n a c h r o n o l o g i c a l development o f l i m i t e d l i a b i l i t y f o r passengers i n i n t e r n a t i o n a l f l i g h t . N e g o t i a t i o n s , d i s c u s s i o n s and agreements b e g i n n i n g w i t h the Warsaw Convention i n 1929 and moving to the p r e s e n t date reveal a mass o f ev idence used i n the t h e s i s . Three important a s p e c t s are e s t a b l i s h e d i n t h i s survey - ( i ) the p o s i t i o n o f each p a r t y as shaped by i t s b e l i e f s , needs and means, ( i i ) the i n t r i c a t e c a l c u l u s o f the. t r a d e - o f f s i t u a t i o n and the interdependent i n f l u e n c e o f an a c t i o n by any one p a r t y , and ( i i i ) most i m p o r t a n t l y , the power o f each p a r t y to i n f l u e n c e the u l t i m a t e c o n c l u s i o n . . The c h r o n o l o g i c a l framework was s e l e c t e d as i t most c l e a r l y d i s p l a y s the development o f these t h r e e p o i n t s , thereby adding a t h i r d dimension t o an u n d e r s t a n d i n g o f p r e s e n t p o s i t i o n s . The t h e s i s i s to be t e s t e d a g a i n s t t h i s ev idence as p r e s e n t e d . I t was proposed as a c o r r e c t i v e to the p r e s e n t course o f n e g o t i a t i o n s and i t aims s o l e l y a t a c c e p t a b i l i t y . In the course o f d e s i g n i n g an a c c e p t a b l e proposal o t h e r q u a l i t i e s o r c h a r a c t e r i s t i c s were i n c l u d e d such as a c o n s i d e r a t i o n o f the p o s i t i o n s and needs o f l e s s e r developed c o u n t r i e s y e t these are means and not ends i n themselves. The data i s q u a l i t a t i v e and not q u a n t i t a t i v e - t e s t i n g o f the t h e s i s must t h e r e f o r e be i t s c o n s i s t e n c y w i t h the evidence p r e s e n t e d . Assessment can not be accomplished by the use o f a f o r m u l a ; a s u b j e c t i v e e v a l u a t i o n i s a l l t h a t i s p o s s i b l e . T h i s data i s gathered from minutes o f meetings o f o r g a n i z a t i o n s i n v o l v e d i n t h i s f i e l d , c o u r t d e c i s i o n s and l e g a l a r t i c l e s by j u r i s t s . OUTLINE Chapter Two deals w i t h passenger l i a b i l i t y i n Canada, t h a t i s , domestic c a r r i a g e o u t s i d e the o p e r a t i o n o f the C o n v e n t i o n . The concept o f l i a b i l i t y and o t h e r p o i n t s o f law are expanded upon and a system i s d i s p l a y e d a g a i n s t which i n t e r n a t i o n a l l i a b i l i t y can be c o n t r a s t e d and b e t t e r a p p r e c i a t e d . Chapter Three i s the f i r s t step i n the c h r o n o l o g i c a l development o f the l i m i t e d l i a b i l i t y o f i n t e r n a t i o n a l a i r c a r r i e r s . I t d e a l s w i t h the Warsaw C o n v e n t i o n , the reasons and events l e a d i n g to i t s c r e a t i o n and the massive changes i t brought about i n i n t e r n a t i o n a l law. The Warsaw Convention i s the b a s i s o f the p r e s e n t l i a b i l i t y regime and a thorough knowledge o f i t i s neces-sary to examine the c u r r e n t problem. Chapter Four i s the next step i n the time framework, the Hague P r o t o c o l . T h i s o c c u r r e d i n 1955 and marked not o n l y a change i n l i a b i l i t y l i m i t s but s i g n a l l e d a change i n the course o f n a t i o n a l views on l i m i t e d l i a b i l i t y , n o t a b l y those o f the U.S. Whi le n a t i o n a l p o s i t i o n s develop c o n t i n u a l l y , the change o n l y becomes e v i d e n t a t each round o f n e g o t i a t i o n s . C o n d i t i o n s i n the U.S. and the a i r t r a n s p o r t i n d u s t r y account f o r the change o f U.S. p o l i c y over t i m e , but changes i n the l i a b i l i t y regime are n o t . c o n t i n u a l but i n t e r m i t t e n t . I t i s t h i s f a c t t h a t renders each new round o f n e g o t i a t i o n s and agreement very i n -s t r u c t i v e . Chapter F i v e r e l a t e s the events s u r r o u n d i n g the f i l i n g by the U.S. i n 1965 o f a N o t i c e o f D e n u n c i a t i o n o f the Warsaw C o n v e n t i o n . T h i s episode r e v e a l s the modern-day U.S. s tand on l i m i t e d l i a b i l i t y and the manoeuvering t h a t o c c u r r e d on both s i d e s to m a i n t a i n the agreement. Chapter S i x d i s c u s s e s the Montreal Agreement o f 1966. T h i s i s a very important event i n t h a t i t saw the withdrawal o f the N o t i c e o f Denuncia-t i o n and an amendment made to the Convention to accommodate U.S. demands. The Agreement i s i n f o r c e today and governs any f l i g h t s t o u c h i n g U.S. t e r r i -t o r y . I t p r o v i d e s another r i c h source o f ev idence and f a c t s on p o s i t i o n s and s t r e n g t h s o f the v a r i o u s p a r t i e s . Chapter Seven i s the f i r s t c h a p t e r i n a s e r i e s o f t h r e e which d e a l s w i t h t o p i c s r e l e v e n t to a l i a b i l i t y p r o p o s a l . I t covers a b s o l u t e l i a b i l i t y which i s an o l d concept i n law but one which d i d not e n t e r the n e g o t i a t i o n s u n t i l 1966. I t i s necessary to c o n s i d e r t h i s element i n d r a f t i n g an a c c e p t -a b l e s o l u t i o n , i t s e f f e c t s are massive a n d , t h e r e f o r e , r e p r e s e n t s a major p o i n t o f n e g o t i a t i o n . Chapter E i g h t i s on the s u b j e c t o f i n s u r a n c e . T h i s p r a c t i c e i s the mortar which holds the p r e s e n t and any f u t u r e l i a b i l i t y scheme t o g e t h e r ; i n c o n v e r t i n g a p o t e n t i a l d i s a s t e r f o r the c a r r i e r i n t o a c e r t a i n o p e r a t i n g c o s t , i t c o m p l e t e l y changes the nature o f the problem. Insurance c o s t s p r o v i d e the "currency" f o r r e l a t i n g p r o p o s a l s , p o s i t i o n s and the interdependency o f the a c t s o f the c a r r i e r and the passenger. Chapter Nine d i s c u s s e s the concept o f dual l i m i t s . T h i s means t h a t t h e r e a r e a l t e r n a t i v e l i m i t s o f l i a b i l i t y depending on the p e r s o n , country o r s i t u a t i o n . I t i s a s o l u t i o n o f d e s p i r a t i o n and i s p r e s e n t e d , d e s p i t e the f a c t t h a t the proposal- r e j e c t s i t , because, o f i t s demonstrat ion o f the f u t i l i t y o f a s i n g l e - p o i n t d i s c u s s i o n o f l i a b i l i t y . V a l u a b l e i n s i g h t i s p r o v i d e d i n t o the p a r t y ' s p o s i t i o n s . - Chapter Ten c o n t a i n s the c h i e f source o f data f o r the t h e s i s . The 1966 ICAO Montreal meeting marked the b e g i n n i n g o f the c u r r e n t stage o f l i a b i l i t y n e g o t i a t i o n s . The U.S. t h r e a t o f withdrawal preceded the meeting and there were s e r i o u s attempts by the n a t i o n a l governments to work out a compromise. The meeting f a i l e d to reach a consensus but the c u r r e n t p o s i t i o n s of the p a r t i e s and t h e i r p r o p e n s i t i e s to compromise are s e t out c l e a r l y . Chapter Eleven d e a l s w i t h the l a s t step i n the n e g o t i a t i o n s - The Guatemala C i t y P r o t o c o l . Some u s e f u l ev idence i s p r o v i d e d here but i t s s i g n i -f i c a n c e i s due to the f a c t t h a t the P r o t o c o l r e p r e s e n t s the best e f f o r t s of the n a t i o n s to reach agreement pursuant to t h e i r d i s c u s s i o n s . I t i s d e a l t w i t h to demonstrate the reasons f o r i t s u l t i m a t e d e f e a t and to l e n d support to the changes recommended i n the t h e s i s . I t r e p r e s e n t s the u l t i m a t e r e s u l t o f s i n g l e - p o i n t n e g o t i a t i o n s . Chapters Twelve and T h i r t e e n s e t out the t h e s i s p r o p o s a l . I t i s a n i n e - p o i n t package based on the u n d e r l y i n g r a t i o n a l e o f the t h e s i s . Each p o i n t i s d i s c u s s e d i n terms o f the e f f e c t i t has on the a c c e p t a b i l i t y and the o v e r a l l reasonableness o f the package. The i n f l u e n c e o f the p o i n t s are d i s -cussed i n . q u a l i t a t i v e terms but i n a manner whereby the t o t a l proposal can be a p p r e c i a t e d . CHAPTER TWO PASSENGER LIABILITY IN CANADA A b r i e f o u t l i n e o f the law a p p l i e d t o cases a r i s i n g out o f domestic a i r a c c i d e n t s w i l l c r e a t e a b e t t e r a p p r e c i a t i o n o f l i a b i l i t y i n i n t e r n a t i o n a l f l i g h t . In Canada t h e r e are two a l t e r n a t i v e systems o f law r e g u l a t i n g r i g h t s between i n d i v i d u a l s ; C i v i l Law i n Quebec and Common Law i n a l l the o t h e r p r o v i n c e s and t e r r i t o r i e s . The BNA A c t a s s i g n e d the p r o v i n c e s the r e s p o n s i -b i l i t y o f e s t a b l i s h i n g c o u r t s o f c i v i l j u r i s d i c t i o n to hear cases such as those a r i s i n g out o f a v i a t i o n a c c i d e n t s . Depending on the p r o v i n c e where the s u i t i s brought one o f the two systems a p p l y . COMMON LAW T h i s body o f law i s a product o f England and came to Canada w i t h the e a r l y s e t t l e r s . I t i s judge-made law i n t h a t p r e v i o u s d e c i s i o n s of o t h e r c o u r t s i n the system, i f r e l e v a n t , are a p p l i e d to the case at hand. This * d o c t r i n e o f j u d i c i a l precedent i s combined w i t h the r u l e o f s t a r e d e c i s i s to produce a cumulat ive body o f d e c i s i o n s s u b j e c t to ref inement o r r e d i r e c -t i o n by a s u p e r i o r c o u r t . The ruTes 9ppl 1 c&ble to 9i r t r a n s p o r t s re not 9n 1 ndependent body o f 19w but r s t h e r 9 n 9ppliC9tion o f cjener91 p r i n c i p l e s to s p e c i f i c sitU9tions«) t h e r e f o r e c o n s ider9ble weicjht i s cjiven to C9ses i n v o l v i n c j the o t h e r modes o f tr9 nsport* In Common L9w j u r i s d i c t i o n s p9ssencj6r 11fibi 1 i t y f 911 s under t o r t 1 9W s p e c i f i c a l l y necjl icjence. Th is i s 9n 9ct o r o m i s s i o n i n breach of 9 duty o f care which the defendant owes the p l a i n t i f f . T h i s duty i s f i x e d by law and * s t a r e d e c i s i s - The p o l i c y o f the c o u r t t o stand by precedent and not d i s t u r b a s e t t l e d p o i n t . i s f i x e d by. law and i s owed to persons g e n e r a l l y . The p l a i n t i f f i n a general n e g l i g e n c e a c t i o n must e s t a b l i s h s e v e r a l p o i n t s : ( i ) That the defendant was n e g l i g e n t - The general r u l e i s t h a t the burden o f p r o o f i s on the p l a i n t i f f a l though under c e r t a i n c i r c u m -stances t h i s may be r e v e r s e d to v a r y i n g degrees. The duty o f an a i r c a r r i e r i s to use a l l reasonable care and forethough to c a r r y the passenger s a f e l y to h i s agreed d e s t i n a t i o n . Th is does not extend to cover more than the p r o v i s i o n which human f o r e s i g h t and s c i e n t i f i c knowledge c o u l d e n s u r e . The s t a n d a r d o f care i s based on the knowledge which the c a r r i e r had o r s h o u l d have had a t the time o f the a c c i d e n t . 1 The s t a n d a r d a p p l i e d to the p i l o t i s t h a t o f a c a r e f u l , r e a s o n a b l e , and competent p i l o t . 2 The c a r r i e r 3 i n Canada i s not an i n s u r e r f o r the passengers' s a f e t y . , u n l i k e the p o s i t i o n o f a common c a r r i e r i n the U.S. ( i i ) That such n e g l i g e n c e caused the a c c i d e n t - The c o u r t must c o n s i d e r i f the s e t OK* ormssion WQs the p r o x irnd t e OK* 1 e CJ 91 c d u s e o f the i n c i d e n t ) i t need not be the s o l e f 9 c t o r $ o n l y 9 s i g n i f i c a n t one* ( i i i ) Tho.t^  t^ h e^  5^ct^  v/9s^  n j u s t i f i ed The defendant h 9 s s e ve r91 p o t e n t i a l def ences 9 v 91 19 b 1 e • Those u s Li 911 ^ y relev9nt to 9Vi9t ion 9re• (9) Inev it9bl e /\ccident The 3 c c l d e n t v^ /hich o c c u r r e d w9 s one v/hlch no treasonable ni9n c o u l d p o s s i b l y be expected to f o r e s e e 9nd cju9rd 9991 ns t . (b) N e c e s s i t y ~ The defendsnt rnsy c l f l im the p 9 r t i c u l 9 r s e t which cdused the i n j u r y W9S C9lcul9ted to a f f o r d p r o t e c t i o n f o r the p lane and the passengers. (c) C o n t r i b u t o r y Negl igence - T h i s a r i s e s when there i s an a c t o r o m i s s i o n amounting to want o f care on the p a r t o f the person c o m p l a i n i n g o f the i n j u r y , which concurred w i t h the defendant's 5 n e g l i g e n c e to form the proximate cause o f i n j u r y . The c o n -cept o f comparative n e g l i g e n c e i s used to reduce the award commensurate w i t h the degree o f c o n t r i b u t e d n e g l i g e n c e , but i s a p p l i c a b l e o n l y i n minor a c c i d e n t s , ( e . g . a passenger d i s r e g a r d -i n g a s e a t - b e l t warning i n t u r b u l e n c e ) ( i v ) That the p l a i n t i f f s u f f e r e d a l o s s - Th is may be e i t h e r economic o r on the b a s i s o f p a i n and s u f f e r i n g . The s u i t may be brought by the passenger f o r i n j u r i e s r e c e i v e d o r by anyone s u f f e r i n g a p e c u n i a r y l o s s as a r e s u l t o f wrongful d e a t h . The grim r e a l i t y o f a i r a c c i d e n t l i t i g a t i o n i s t h a t the m a j o r i t y o f cases are f o r death r a t h e r than i n j u r y . World s t a t i s t i c s show t h a t between 1961-1968 i n a l l a c c i d e n t s i n v o l v i n g some Toss o f l i f e o n l y 20% o f the passengers s u r v i v e d the c r a s h . CIVIL LAW T h i s system, used i n Quebec, r e p r e s e n t s another approach to the a n a l y -s i s and s o l u t i o n o f l e g a l problems. The prime d i f f e r e n c e i n the two systems i s t h a t r a t h e r than being based on c a s e - l a w , the C i v i l Law j u r i s d i c t i o n s have as a c e n t r a l source a c o d i f i e d body o f law d e r i v e d from the Roman and Napoleonic Codes. In these j u r i s d i c t i o n s passenger l i a b i l i t y i s t r e a t e d as an aspect o f the law o f o b l i g a t i o n s . The a c t i o n has i t s r o o t s i n c o n t r a c t which i s an agreement which c r e a t e s o r i n t e n d s to c r e a t e l e g a l o b l i g a t i o n s between the p a r t i e s to i t . The c o n t r a c t o f c a r r i a g e between the passenger and the c a r -r i e r i m p l i e s t h a t the l a t t e r w i l l c a r r y the passenger from o r i g i n to d e s t i n a -t i o n s a f e l y . 7 The o b l i g a t i o n i s one o f r e s u l t . The r e l e v a n t p r o v i s i o n s o f the Quebec C i v i l Code are A r t i c l e s 1024, 1053, 1054 and 1056. T h i s o b l i g a t i o n r e l a t e s to the c o n t r a c t i n g p a r t i e s as compared to Common Law where the duty i s f i x e d by law and owed g e n e r a l l y t o those around y o u . C o n t r a c t u a l elements e x i s t i n Common Law cases because o f the c o n t r a c t o f c a r r i a g e but they modify r a t h e r than found the a c t i o n . The o b l i g a t i o n o f the c a r r i e r i s very heavy - to e x c u l p a t e h i m s e l f , the defendant must e s t a b l i s h t h a t the a c c i d e n t was caused by v i s majeur o r some cause e n t i r e l y beyond h i s c o n t r o l . A l though t h i s appears more onerous than Common Law, changes i n e v i d e n t i a r y procedure i n a i r t r a n s p o r t cases have p l a c e d a s i m i l a r burden on the c a r r i e r defendant under the l a t t e r system. DAMAGES Under these two systems the normal s i t u a t i o n i s p r o o f o f f a u l t and f u l l compensation Compensation i s i n the form o f u n l i q u i d a t e d damages, a sum which the c o u r t chooses to award having regard to the f a c t s . T h i s f u l -f i l l s two d i s t i n c t f u n c t i o n s * ( i ) Most i m p o r t a n t l y t h a t o f compensating the p a r t y s u f f e r i n g the damage. ( i i ) To v a r y i n g degrees a p u n i t i v e element T h i s s a n c t i o n i s imposed on the person l i a b l e c o n s t i t u t i n g a d i s s u a s i v e element aimed a t a v o i d -j - j - p g r e p e t i t i o n o f the a c t s which l e a d to the damage Damages are assessed under two heads* ( i ) General — Compensates f o r l o s s not capable o f a c c u r a t e p e c u n i a r y assessment but which i s f e l t to r e s u l t from the wrong e g p a i n and s u f f e r i n g l o s s o f l i fe o r e a r n i n g p o s s i b i l i t i e s ( i i ) Specia1 Those damages which can be a c c u r a t e l y assessed as compensa t i o n f o r a d e f i n a t e f i n a n c i a l l o s s ^ ^ 9 medical fees and l o s t wages * S p e c i f i c a l l y res i p s a l o c g u i t u r , to be d e a l t w i t h l a t e r i n t h i s paper. * P u b l i c p o l i c y i n Canada has not favored an upper l i m i t on recovery from a defendant c a r r i e r . ^ S e c t i o n 352 o f The Rai lway A c t p r o h i t s i n c l u -s i o n i n any c o n t r a c t o f c a r r i a g e , c o n d i t i o n s i m p a i r i n g , r e s t r i c t i n g , o r l i m i t i n g the l i a b i l i t y o f a r a i l w a y w i t h o u t approval o f the Canadian T r a n s p o r t Commission. Rai lways i n Canada have made a p r a c t i c e o f a c c e p t i n g f u l l 1 o r e s p o n s i b i l i t y f o r the death o r i n j u r y o f a passenger. Highway c a r r i e r s 11 are a l s o s u b j e c t to u n l i m i t e d l i a b i l i t y . Domestic a i r t r a v e l i s s u b j e c t to The A e r o n a u t i c s A c t which c o n t a i n s no r e f e r e n c e to l i m i t e d l i a b i l i t y . T h e r e f o r e , the CTC has s e t a minimum l i a b i l i t y . o f $ 4 0 , 0 0 0 . 0 0 per s e a t . A i r l i n e s i n Canada have as a p r a c t i c e 12 accepted f u l l l i a b i l i t y . Having sketched the r u l e s a p p l i c a b l e to domestic f l i g h t , the paper next d e a l s w i t h the r a d i c a l l y d i f f e r e n t l i a b i l i t y o f i n t e r n a t i o n a l c a r r i e r s . CHAPTER THREE THE CREATION OF THE WARSAW CONVENTION In o r d e r to f u l l y understand the p r e s e n t s t a t e o f passenger l i a b i l i t y the c r e a t i o n o f the inst rument which forms the b a s i s o f the l i a b i l i t y must be d e a l t w i t h . In 1923 the French N a t i o n a l Assembly began c o n s i d e r a t i o n o f a b i l l r e g u l a t i n g the l i a b i l i t y o f the a i r c a r r i e r . R e a l i z i n g t h a t t h i s q u e s t i o n c o u l d o n l y be p r o p e r l y d e a l t w i t h on an i n t e r n a t i o n a l b a s i s the government o f France i n v i t e d a number o f s t a t e s engaged i n a i r t r a n s p o r t to take p a r t i n a c o n f e r e n c e , the aim o f which would be to d r a f t an agreement r e l a t i n g to c a r r i e r l i a b i l i t y . • The F i r s t I n t e r n a t i o n a l Conference on P r i v a t e A i r Law convened i n P a r i s i n 1925 and a t i t s c o n c l u s i o n the groundwork had been l a i d f o r a * d r a f t c o n v e n t i o n . The conference e s t a b l i s h e d an i n f l u e n t i a l group to shape the d i s c u s s i o n s i n t o a d r a f t c o n v e n t i o n to be s u b m i t t e d to the s t a t e s a t the next c o n f e r e n c e . The group was c a l l e d CITEJA (La Comite I n t e r n a t i o n a l e Technique d'Experts J u r i d i q u e s A e r i e n s ) . The Second I n t e r n a t i o n a l Conference on P r i v a t e A i r Law was s e t f o r Warsaw, P o l a n d ; October 4 - 1 2 t h , 1929. CITEJA presented a c o n v e n t i o n de-s igned "to r e g u l a t e i n a uni form manner the c o n d i t i o n s o f i n t e r n a t i o n a l t r a n s -p o r t a t i o n o f the a i r c a r r i e r . " The d e l e g a t e s were aware o f the need to develop the i n d u s t r y w i t h i n a framework o f s o l i d l e g a l p r i n c i p l e s . The * Convention - "A m u l t i l a t e r a l agreement which a number o f s t a t e s have concluded f o r f u t u r e conduct o r f o r c r e a t i n g some i n t e r n a t i o n a l c o n s t i t u -t i o n . ! A n y n a t i o n i s a t l i b e r t y t 0 j o i n a n d i t does not become o p e r a t i v e u n t i l a s p e c i f i e d number o f c o u n t r i e s have r a t i f i e d . 2 " Rapporteur o f the P r e p a r a t o r y Committee i n i n t r o d u c i n g the d r a f t s a i d , "What the engineers are doing f o r the machines we must do f o r the law" 3 At the c o n c l u s i o n o f the conference the inst rument was opened f o r s i g n a t u r e and i n 1933 i t became o p e r a t i v e when r a t i f i e d by f i v e s t a t e s ; becoming the b a s i s o f p r e s e n t - d a y i n t e r n a t i o n a l c a r r i e r l i a b i l i t y . The Warsaw Convention arose to meet very p r e s s i n g needs o f the p e r i o d ; both passenger and c a r r i e r were a d v e r s e l y a f f e c t e d by the o p e r a t i o n o f the e x i s t i n g r u l e s o f law r e l a t i n g to a i r a c c i d e n t l i t i g a t i o n . Changes brought about i n the Convention reveal the c h a r a c t e r o f the conference and a l l subsequent developments i n passenger l i a b i l i t y . Any change which bene-f i t e d one o f the p a r t i e s to the r e l a t i o n s h i p r e p r e s e n t e d a c o s t to the o t h e r p a r t y . The t r a d e - o f f s which o c c u r r e d appear e q u a l l y d i s t r i b u t e d between passenger and c a r r i e r . T h i s aspect o f q u i d pro quo permeates the e n t i r e course o f n e g o t i a t i o n s r e g a r d i n g l i a b i l i t y . The changes can be c h a r a c t e r i z e d on the b a s i s o f the r e c i p i e n t o f the b e n e f i t . CARRIER The a i r t r a n s p o r t i n d u s t r y i n i t s i n f a n c y was unable to a t t r a c t adequate c a p i t a l to f i n a n c e i t s growth. The s p e c u l a t i v e nature o f the investment was aggravated by the c o n s i d e r a b l e r i s k o f having the e n t i r e c a p i t a l s t r u c t u r e o f a small f i r m being d i s s i p a t e d by l a r g e judgments as a * r e s u l t o f one o f the very f r e q u e n t a c c i d e n t s . The i n d u s t r y f e l t an upper l i m i t on l i a b i l i t y , s e t a t the average recovery l e v e l would induce a d d i t i o n a l c a p i t a l investment . * The exposure o f the c a r r i e r to s u i t i s apparent from the s a f e t y r e c o r d o f the p e r i o d . In the years J925-1929 the f a t a l i t y r a t e was 45 per 100 m i l l i o n passenger m i l e s . In 1970 i t had dropped to .29 per 100 m i l l i o n passenger m i l e s . Governments, anxious to have a v i a b l e a i r t r a n s p o r t i n d u s t r y , had to v a r y i n g e x t e n t s stepped i n to f i l l t h i s c a p i t a l s h o r t f a l l by means o f s u b s i d i z a t i o n o r d i r e c t o p e r a t i o n . T h i s accounts f o r the f a c t t h a t the pr imary concern o f the n a t i o n a l d e l e g a t i o n s was f o r the c a r r i e r and not 4 the passenger. In deference to the expressed needs o f the c a r r i e r , the Convention s e t a maximum l i m i t on recovery f o r death o r i n j u r y o f 125,000 French g o l d f r a n c s , then valued a t a p p r o x i m a t e l y $ 5 , 0 0 0 . 0 0 . T h i s p r o t e c t i v e a t t i t u d e towards the c a r r i e r has marked the d i s c u s -s i o n s o f p r i v a t e a i r law s i n c e 1929. As l a t e as 1952, the Rome Convention on L i a b i l i t y to T h i r d P a r t i e s and S u r f a c e Damage c o n t a i n e d i n the Preamble the statement t h a t the l i m i t s on c a r r i e r l i a b i l i t y c o n t a i n e d t h e r e i n were adopted " i n o r d e r not to h i n d e r the development o f a i r t r a n s p o r t " . The p r e v a i l i n g view on e q u i t a b l e r i s k d i s t r i b u t i o n i s d i s p l a y e d i n t h i s j u d i c i a l quote from an Arkansas c o u r t i n 1935. "It would seem t h a t i n a p p l y i n g such a r u l e o f ev idence to t r a v e l by a i r , c o n s i d e r a t i o n s h o u l d be g i v e n to the e x t e n t o f development and r e s u l t a n t s a f e t y o f t h i s mode o f t r a v e l as compared to o t h e r modes o f t r a v e l . Whi le i t has been j u d i c i a l l y r e c o g n i z e d t h a t a v i a t i o n i s no l o n g e r an exper iment , i t i s s t i l l i n i t s formst i v e s t d cj e s 9 n d 1 i 9 b 111ty o f the c a r r i e r should h 9 r d 1y be medsured by the saline r u l e s o f Iciw cjovernincj t r a n s p o r t a t i o n by Iflnd o r Welter* Msny new d e v i c e s i n c r e d s i n Q s a f e t y o f f 1 i9h t wi 11 doubt!ess be d i s c o v e r e d <jnd t h s t s h ci *t h p s n d cj d u ^^^^  /^ h m^ ) d *f "t /^ 1 s i l l b 1 n cj 1 n i ^^ s 5 i n f a n c y s h o u l d not i n a l l f a i r n e s s be borne by the c a r r i e r . " PASSENGER Tn r e t u r n f0 r the l o s s o f r ic jht to fu 11 dsrricicjesj the pcissencjer re*™ c e i v e s . t h r e e s u b s t a n t i a l compensating b e n e f i t s : U n i f o r m i t y i n P r i v a t e A i r Law - I n t e r n a t i o n a l a i r law i s a m i x t u r e o f p u b l i c and p r i v a t e i n t e r n a t i o n a l law. The former i s a body o f r u l e s which s t a t e s regard as b i n d i n g on one a n o t h e r . An example o f t h i s i s the Chicago C o n v e n t i o n . The l a t t e r i s t h a t p a r t o f a c o u n t r y ' s domestic law which c o u r t s apply to cases where t h e r e i s some c o n n e c t i o n w i t h a f o r e i g n c o u n t r y . I t d e a l s w i t h i n d i v i d u a l r a t h e r than n a t i o n a l r i g h t s w i t h a view to choosing the a p p r o p r i a t e system o f law to be a p p l i e d to the c a s e . " 7 A i r t r a n s p o r t generates c o n t a c t s w i t h d i f f e r e n t l e g a l j u r i s d i c t i o n s a t an unprecedented r a t e which makes i t a f r e q u e n t user o f p r i v a t e i n t e r n a t i o n a l law. The c l a s s i c a l means o f d e a l i n g w i t h these s i t u a -t i o n s i s by c h o i c e o f law. When a case i n v o l v i n g f o r e i g n elements comes b e f o r e a c o u r t the judge must f i r s t d e c i d e i f the c o u r t pos-sesses j u r i s d i c t i o n ; the general r u l e i s t h a t the c o u r t has j u r i s -d i c t i o n over d i s p u t e s i n r e s p e c t o f which i t can g i v e an e f f e c t i v e judgment. I f t h i s i s decided i n the a f f i r m a t i v e , i t i s then neces-sary to decide which o f the v a r i o u s l e g a l systems, e i t h e r f o r e i g n o r d o m e s t i c , s h o u l d be a p p l i e d . In a case where the f a c t s i n d i c a t e t h a t f o r e i g n law a p p l i e s , i t governs the s u b s t a n t i v e a s p e c t s o f the c a s e . The c o u r t s e i s e d o f the case always a p p l i e s the l e x f o r i * to the p r o c e d u r a l a s p e c t s r e g a r d l e s s . o f the c h o i c e o f s u b s t a n t i v e law. S u b s t a n t i v e law d e f i n e s the a c t s , r e l a t i o n s , s t a t u s and d e a l i n g s which c r e a t e o r b r i n g i n t o p l a y r i g h t s and remedies. In a t o r t a c t i o n , t h i s covers p o i n t s such as whether the p l a i n t i f f has s u s -t a i n e d a l e g a l i n j u r y , the s t a n d a r d o f care to which the defendant * l e x f o r i - Law o f the j u r i s d i c t i o n c o n t a i n i n g the c o u r t s e i s e d o f the c a s e . i s h e l d , i m m u n i t i e s , c o n t r i b u t o r y n e g l i g e n c e , s u r v i v a l o f c l a i m s i n the event o f e i t h e r p a r t y ' s death and the measure and l i m i t o f damages. P r o c e d u r a l law governs the procedure to e n f o r c e r i g h t s which 8 a r i s e under s u b s t a n t i v e law and i s always based on the l e x f o r i . In 1929 the hard and f a s t r u l e i n t o r t cases was t h a t the l e x * l o c u s d e l e c t i determined the s u b s t a n t i v e aspects o f the c a s e . The j u r i s p r u d e n t i a l b a s i s f o r t h i s c h o i c e o f law was t h a t the o b l i g a t i o o f the t o r t f e a s o r arose a t the p l a c e o f the wrong and f o l l o w e d him to be e n f o r c e d i n any c o u r t which c o u l d o f f e r j u r i s d i c t i o n over him. T h i s c h o i c e o f law r u l e c r e a t e d severe problems f o r the p l a i n t i f f g i n a l i a b i l i t y s u i t . The f o r t u i t o u s nature o f the c r a s h s i t e sub-j e c t e d the p l a i n t i f f to r u l e s and j u r i s d i c t i o n s he never c o n t e m p l a t e d . Faced w i t h a complex and u n c e r t a i n l e g a l envi ronment, the passenger o r h i s s u r v i v o r s would be a s s i s t e d i f the c l a i m procedure c o u l d be determined beforehand. The Warsaw Convention removed the need f o r the l e x l o c u s d e l e c t i r e f e r r a l by s u b s t i t u t i n g a u n i v e r s a l system o f s u b s t a n t i v e law. With r u l e s e s t a b l i s h e d p r i o r to an a c c i d e n t and independent o f the a c c i -dent l o c a t i o n , the passenger can c a l c u l a t e h i s r i s k s w i t h some degree o f c e r t a i n t y . The s u b s t a n t i v e areas governed by the Convention a r e ; the e s t a b l i s h -ment o f a cause o f a c t i o n ; l i m i t s s e t on l i a b i l i t y and time f o r s u i t ; and burden o f p r o o f . The scope o f the inst rument i s l i m i t e d to " c e r t a i n r u l e s " and t h e r e f o r e many areas are r e l i n q u i s h e d i n t e n t i o n a l l y o r by l e x l o c u s d e l e c t i - Law o f the j u r i s d i c t i o n where the wrong o c c u r r e d . mere o m i s s i o n to be s e t t l e d by the l e x f o r i . An example o f t h i s i s the d e t e r m i n a t i o n o f the persons having a r i g h t to b r i n g an a c t i o n and t h e i r r i g h t s i n t e r s e . The l e g i s l a t u r e s o f each o f the r a t i f y i n g n a t i o n s passed an a c t i n t r o d u c i n g the terms o f the agreement i n t o t h e i r domestic l a w , c r e a t i n g a new wrongful death s t a t u t e o r cause o f a c t i o n f o r i n j u r i e s . The Convention depends upon the p r o v i s i o n s o f the domestic law f o r i t s complete enforcement. In Canada, the i n c o r p o r a t i n g a c t i s The C a r r i a g e by A i r A c t . ( i i ) Assurance o f L i m i t e d Recovery - The Convention a s s i s t e d the passenger by p r o h i b i t i n g the making o f a l e s s f a v o r a b l e c o n t r a c t by the c a r r i e r . A i r l i n e t i c k e t s are e s s e n t i a l l y a c o n t r a c t o f adhesion and i n 1929, one o f the common c o n d i t i o n s i n a c o n t r a c t was an e x c u l p a t o r y c l a u s e s h i e l d i n g the c a r r i e r from a l l l i a b i l i t y . The p r a c t i c e was l e g a l i n Canada 1 0 and c o n t i n u e d on domestic f l i g h t s u n t i l the A i r T r a n s p o r t Board s e t r e s t r i c t i o n s . 1 1 ( i i i ) Burden o f Proof - The t h i r d major b e n e f i t granted the passenger was a s h i f t e d burden o f p r o o f . The burden i s "the n e c e s s i t y o r duty o f a f f i r m a t i v e l y p r o v i n g a f a c t o r f a c t s i n d i s p u t e on an i s s u e r a i s e d between the p a r t i e s . " 1 2 In 1929 the p l a i n t i f f i n an a i r a c c i d e n t s u i t was s e v e r e l y handicapped i n p r o v i n g n e g l i g e n c e . The p lane was not i n h i s c o n t r o l p r i o r to the c r a s h , the evidence was o f t e n d e s -t r o y e d and i n v e s t i g a t i v e procedures were p r i m i t i v e y e t expensive. The Convention c r e a t e d a presumption o f c a r r i e r n e g l i g e n c e and i t became t h a t p a r t y ' s r e s p o n s i b i l i t y to d i s p r o v e i t . T h i s was o f g r e a t e r a s s i s t a n c e i n the Common Law j u r i s d i c t i o n s because a s i m i l a r presump-t i o n a l r e a d y e x i s t e d i n C i v i l Law. In view o f the changes brought about by the Warsaw Convention t h i s f i r s t s tage o f development i s seen as an attempt to balance c o n f l i c t i n g i n t e r e s t s i n a i r c a r r i e r l i a b i l i t y . (Appendix A examines i n d e t a i l the s t r u c t u r e and o p e r a t i o n o f the Warsaw Convention) CHAPTER FOUR THE HAGUE PROTOCOL The d i r e c t i o n and nature o f l i a b i l i t y n e g o t i a t i o n s are r e v e a l e d by the events l e a d i n g up t o and r e s u l t i n g i n the next major agreement i n t h i s a r e a . The p e r i o d between Warsaw (1929) and the meeting a t the Hague (1955) was one o f uneven development f o r the i n d u s t r y . The d e p r e s s i o n o f the 1930's n e a r l y c r i p p l e d i t , the s o l e b e n e f i t being an encouragement f o r s t a t e s to s i g n the Convention d u r i n g t h i s p e r i o d when venture c a p i t a l d i s a p p e a r e d f o r the a i r l i n e s . World War II f o l l o w e d and w h i l e i t produced advances i n a i r t r a n s p o r t t e c h n o l o g y , growth f o r c e s f o r the i n d u s t r y were d i v e r t e d . D e v e l -opment proceeded r a p i d l y a f t e r the War. During t h i s p e r i o d the l i a b i l i t y regime c r e a t e d i n Warsaw was g e n e r a l l y a c c e p t a b l e to member n a t i o n s but a f o r c e was b u i l d i n g t h a t would e v e n t u a l l y t h r e a t e n the e x i s t e n c e o f i n t e r n a t i o n a l agreement on c a r r i e r l i a b i l i t y . A d -justments to be made at the Hague would o n l y delay the c o l l i s i o n course o f the l i m i t a t i o n l e v e l and the needs o f one country's c i t i z e n s . A common l i m i t on recovery w i l l e f f e c t v a r i o u s c o u n t r i e s i n d i f f e r e n t manners. The U . S . , e x p e r i e n c i n g the twin i n f l u e n c e s o f i n f l a t i o n and a r i s i n g s t a n d a r d o f l i v i n g , f e l t the l i m i t had to be r a i s e d to o f f e r even minimum p r o t e c t i o n f o r her c i t i z e n s . I f an American was k i l l e d i n Warsaw f l i g h t , h i s f a m i l y c o u l d r e c o v e r a maximum o f $ 8 , 3 0 0 . 0 0 , a l a r g e f i g u r e i n terms o f the incomes o f a l e s s e r developed country (LDC) but o n l y s l i g h t l y more than the c o s t o f s u p p o r t i n g an average U.S. f a m i l y f o r a y e a r i n 1955. I n c i d e n t s such as the 1943 crash which s e r i o u s l y i n j u r e d a p o p u l a r U.S. e n t e r t a i n e r , Jane Froman, and s u b j e c t e d her to the Warsaw l i m i t i n c r e a s e d p u b l i c p r e s s u r e on the U.S. government to seek upward r e v i s i o n . A f t e r 1945, the U.S. became the main p r o t a g o n i s t i n the d i s c u s s i o n s . I t i s i n t e r e s t i n g t o note t h a t the U.S. i s the o n l y country where the l i m i t a t i o n became a p o p u l a r i s s u e . R e v i s i o n i n f a c t had been under c o n s i d e r a t i o n by CITEJA s i n c e 1935, t h i s group being concerned w i t h the l e v e l o f l i m i t a t i o n and the e f f e c t i t would have on c o n t i n u i n g i n t e r n a t i o n a l c o o p e r a t i o n . In May o f 1947 when the new l-CAO ( I n t e r n a t i o n a l C i v i l A v i a t i o n O r g a n i z a t i o n ) r e p l a c e d CITEJA, i t d i s c u s s e d i n C a i r o ( 1 9 4 6 ) , Madr id ( 1 9 5 1 ) , P a r i s (1952) and Rio De J a n e i r o (1953). Not u n t i l 1955 was a d r a f t agreement ready and a d i p l o m a t i c c o n f e r -ence c a l l e d f o r a t the Hague. The U.S. opened w i t h t h e i r demand f o r a $ 2 5 , 0 0 0 . 0 0 l i m i t and were v i g o r o u s l y opposed by J a p a n , the L a t i n American c o u n t r i e s , the Communist B l o c c o u n t r i e s , and a l l the o t h e r s t a t e s d i s p l a y i n g v a r y i n g degrees o f d i s a p p r o v a l . The reasons behind t h i s c o n f r o n t a t i o n are complex but are c e n t r a l to an understanding o f the c u r r e n t problems. The f o l l o w i n g i s a background to the r e s p e c t i v e p o s i t i o n s . UNITED STATES Damage awards i n the U.S. are the h i g h e s t i n the w o r l d and i t i s t h i s f a c t t h a t caused t h a t country to be the one most a f f e c t e d by a l i m i t a t i o n . I t i s t h i s which combines w i t h t h e i r massive i n t e r n a t i o n a l t r a f f i c g e n e r a t i o n to produce both the impetus and a b i l i t y to b r i n g about changes i n the l i a b i l i t y regime. Why are American awards so high w h i l e a country such as Canada, which i s s i m i l a r l y s i t u a t e d i s content w i t h the e x i s t i n g l i m i t s and would e v e n t u a l l y oppose U.S. demands i n 1966? ( i ) Standard o f L i v i n g - High i n the U.S. but not i n r e l a t i o n to Canada. ( i i ) Underdeveloped S o c i a l S e c u r i t y System - Death and i n j u r y c r e a t e s severe economic consequences f o r those i n v o l v e d o r t h e i r dependents w h i l e s o c i a l i z e d schemes i n o t h e r c o u n t r i e s tend to a l l e v i a t e these consequences. ( i i i ) D i s r e g a r d o f C o l l a t e r a l Compensation - Whi le c i rcumstances such as personal a c c i d e n t i n s u r a n c e would reduce the p l a i n t i f f ' s need f o r damages, they are not g e n e r a l l y c o n s i d e r e d . For example, i n C a l i f o r n i a i n a t r i a l f o r damages f o r wrongful death o f a husband, the f a c t t h a t the widow has r e m a r r i e d and i s presumably supported i s i n a d m i s s a b l e . ( i v ) P e c u l i a r U.S. Court System (a) J u r i e s - The j u r y system i s s t i l l used to determine damages i n many U.S. c o u r t s . Composed o f persons d e s c r i b e d by one E n g l i s h judge as "unaccustomed to p r o t r a c t e d thought", they are prone to be s e n t i m e n t a l , a l l o w i n g p u n i t i v e r a t h e r than compensatory motives to p r e v a i l . In personal i n j u r y c a s e s , they are s u s c e p t i b l e to m a n i p u l a t i o n by an e x p e r i e n c e d p l a i n t i f f lawyer as he hammers away at extraneous d e t a i l s c a l c u l a t e d to i n c i t e the j u r y . The w i d e - s p r e a d use o f l i a b i l i t y i n s u r a n c e causes a j u r y to view the compensation as a l i m i t l e s s r e s o u r c e w h i l e judges c o u l d d i s c e r n a l o n g - r a n g e s o c i a l p o l i c y and the e f f e c t s o f h igh awards on i n s u r -ance c o s t s . •(b) A t t o r n e y s ' Fees - The s t a n d a r d p r a c t i c e o f U.S. t r i a l lawyers i n a i r a c c i d e n t cases i s to charge a c o n t i n g e n t fee ( i . e . one based on r e c o v e r y , i f a n y ) . The average i s 33% ranging as high as 50%. To adequately p r o v i d e f o r the p l a i n t i f f a f t e r payment o f l e g a l f e e s , the c o u r t must g i v e a gross award 50 - 100% h i g h e r than the d e s i r e d net award. Th is f a c t prompted S i r W i l l i a m H i l d r e d , p a s t D i r e c t o r General o f IATA ( I n t e r n a t i o n a l A i r T r a n s p o r t A s s o c i a t i o n ) to remark, "I impute no motives but i t i s the American t r i a l lawyers who are a t the f o r e f r o n t o f the b a t t l e f o r i n c r e a s e d o r u n l i m i t e d l i a b i l i t y . " 1 T h i s system i s s h o c k i n g to lawyers t r a i n e d i n the E n g l i s h t r a d i t i o n where t h i s p r a c t i c e i s termed champerty and i s i l l e g a l . (c) O b s o l e t e Concept ion o f the F u n c t i o n o f Tort Law - T h i s produces a p r o p e n s i t y to a l l o w moral o r p u n i t i v e damages r a t h e r than a t t e m p t i n g as f a r as money can to p l a c e the i n j u r e d p a r t y i n the p o s i t i o n he enjoyed b e f o r e the wrong o f which he c o m p l a i n s . 2 (d) A b i l i t y t o Express I n t a n g i b l e s i n Money Terms - The most p r o m i -nent U.S. p l a i n t i f f lawyer i n a i r l i t i g a t i o n , Lee S . K r e i n d l e r , p r a i s e s the U.S. system f o r i t s a b i l i t y to "so t a n g i b l y r e c o g n i z e 3 the value o f a human l i f e " . The compensatory segment o f a U.S. award i s based on c a p i t a l i z e d e a r n i n g s . For example i n T u l l e r v KLM, the c o u r t u s e d : Damages = Income x E a r n i n g L i f e Expectancy 2 to produce a $ 3 5 0 , 0 0 0 . 0 0 award. Income i s the dynamic v a r i b l e . T h i s i s c o n t r a s t e d to the E n g l i s h view o f damages - "Damages are i n r e s p e c t o f a predominant ly happy l i f e , not o f l o s s o f f u t u r e p e c u n i a r y p o s s e s s i o n s , hence s o c i a l p o s i t i o n o r p r o s p e c t s o f w o r l d l y p o s s e s s i o n s cannot be taken i n t o account s i n c e happiness does not depend on them." 5 OTHER NATIONS D i s c u s s i o n s o f t h i s group's p o s i t i o n c e n t e r s around the r o l e o f i n s u r -ance i n passenger l i a b i l i t y . I t i s s t a n d a r d procedure f o r a i r l i n e s to p u r -chase passenger l e g a l l i a b i l i t y i n s u r a n c e , c o n v e r t i n g a r i s k i n t o an o p e r a t i n g c o s t . Whereas the o b j e c t i v e o f the law o f n e g l i g e n c e i s to s h i f t the l o s s from the i n j u r e d p a r t y to the t o r t f e a s o r , i n s u r a n c e s h i f t s the l o s s to a group s i m i l a r l y s i t u a t e d , i . e . the a i r l i n e s and u l t i m a t e l y the passengers. Any compensation t h a t i s p a i d under t h i s scheme i s r e f l e c t e d i n the c o s t to the passenger o f t r a n s p o r t a t i o n . Two f a c t o r s a s s o c i a t e d w i t h i n s u r a n c e produce what the o t h e r n a t i o n s and i n p a r t i c u l a r the LDCs regard as an i n e q u i t y . F i r s t l y , the r a t i n g o f passenger l i a b i l i t y by the i n s u r e r s i s based on revenue passenger m i l e s f lown by the i n s u r e d d u r i n g a s p e c i f i c p e r i o d , the o p e r a t i n g r e c o r d o f the c a r r i e r and the e s t i m a t e d r i s k o f a c c i d e n t . T h i s bears h e a v i l y on the f l a g c a r r i e r s o f the LDCs which have l i g h t t r a f f i c and a r e l a t i v e l y poor s a f e t y r e c o r d . A d d i t i o n a l l y , a small a i r l i n e i s f a c e d w i t h a massive r i s e i n premiums a f t e r an a c c i d e n t w h i l e those o f a l a r g e c a r r i e r move up i n c r e m e n t a l l y . These c i r c u m s t a n c e s cause the c o s t o f i n s u r a n c e i n r e l a t i o n to revenues to be much h i g h e r f o r c a r r i e r s o f an LDC, o f t e n - i n excess o f 2% o f revenues. Thus, any r i s e i n l i a b i l i t y l i m i t a t i o n s and i t s i n f l u e n c e on premium l e v e l s are o f p r o p o r t i o n a t e l y g r e a t e r concern to those governments which h e a v i l y s u b s i d i z e a f l a g c a r r i e r f o r reasons o f n a t i o n a l s t a t u r e . The governments i n underdeveloped n a t i o n s are aware t h a t d e v e l o p -ment o f a i r t r a n s p o r t i n t h e i r geographic area depends on b r i n g i n g c o s t s down to a range t h a t the general p o p u l a t i o n can a f f o r d . S e c o n d l y , the d i s t r i b u t i o n o f compensation f o l l o w i n g an a c c i d e n t i s not u n i f o r m . Those whose economic v a l u e i s h i g h , i . e : the c i t i z e n s o f a * developed n a t i o n , r e c e i v e the h i g h e s t s e t t l e m e n t . D e s p i t e the f a c t t h a t the c o s t o f i n s u r a n c e i s spread e q u a l l y over the t i c k e t s t h e r e i s a d i f f e r e n t i a l a l l o c a t i o n o f b e n e f i t s The U S government i n s i s t s t h a t t h i s i s a j u s t i f i e d The l i m i t does not d e f i n e the recovery but o n l y the maximum p o s s i b l y r e c o v e r y . ? 2 e j / ! J death o r i n j u r y depend upon the i n d i v i d u a l , the s o c i o - e c o n o m i c l e v e l o f the country and the p r a c t i c e o f the c o u r t s i n t h a t j u r i s d i c t i o n . c o s t o f access to the l u c r a t i v e American market. The o t h e r n a t i o n s view t h i s c r o s s - s u b s i d i z a t i o n as an i n e q u i t y and p o i n t out t h a t i f l i m i t s are r a i s e d , the v a r i a n c e i n compensation w i l l i n c r e a s e . That b r i e f l y i s the peasant/king argument which s t a t e s t h a t the "peasants" o f an LDC s u b s i d i z e the "kings" o f the U.S. I t i s a weak argument: ( i ) "Peasant" a i r l i n e s do not c a r r y "peasants". In most LDCs, a i r t r a v e l on i n t e r n a t i o n a l routes i s a v a i l a b l e o n l y to the e l i t e , a s i t u a t i o n s i m i l a r to the North A t l a n t i c i n the 1 9 5 0 ' s . T h i s group o f t r a v e l l e r s i s very much a f f e c t e d by a l i m i t . ( i i ) P l a i n t i f f s i n the developed n a t i o n s , p a r t i c u l a r l y the U . S . , do not regard these high s e t t l e m e n t s as w i n d f a l l s but r a t h e r as a s i n c e r e l y p e r c e i v e d need. The important p o i n t i s not t h a t the peasant/king argument i s i n v a l i d but t h a t n a t i o n s o t h e r than the U.S. f i r m l y b e l i e v e i t . T h i s , combined w i t h the U.S. s tance p r o v i d e the f rame-work f o r a very d i f f i c u l t s i t u a t i o n . In r e a l i t y , the l i m i t w i l l a f f e c t r e c o v e r i e s i n most c o u n t r i e s , some to a l a r g e r e x t e n t than o t h e r s . Each government has a s s e s s e d i t s c o n -f l i c t i n g i n t e r e s t s i n adequate s e t t l e m e n t s and lower a i r f a r e s and determined the l i a b i l i t y l e v e l t h a t b e s t balances these i n t e r e s t s . A l l n a t i o n s except the U.S. have d e c i d e d t h a t a l e v e l i n the area o f the p r e s e n t l i m i t a t i o n best r e f l e c t s the o v e r a l l i n t e r e s t s o f her c i t i z e n s . Concurrent w i t h t h e i r opening demand o f a $ 2 5 , 0 0 0 . 0 0 l i m i t , the U.S. i n t r o d u c e d an a t t a c k on l i m i t e d l i a b i l i t y . Whi le the main concern a t Warsaw and the Hague was f o r the c a r r i e r , the U.S. adopted a c o u n t e r - p o s i t i o n s u p p o r t -i n g passenger i n t e r e s t s . A p a r t i a l e x p l a n a t i o n f o r these views l i e s i n the ownership o f i n t e r -n a t i o n a l c a r r i e r s . In the U . S . , they are p r i v a t e l y owned w h i l e o t h e r governments own d i r e c t l y o r h e a v i l y s u b s i d i z e t h e i r c a r r i e r s , u l t i m a t e l y l e a d i n g to v a r y i n g b i a s e s . U.S. d e l e g a t i o n s c l a i m w i t h some j u s t i f i c a t i o n t h a t European d e l e g a t e s are i n c o n f l i c t o f i n t e r e s t because o f the f a c t t h a t many o f them are from the management o f the s t a t e a i r l i n e s . European d e l e g a t i o n s are e q u a l l y d i s p l e a s e d t h a t the most i n f l u e n t i a l , c e r t a i n l y the most v o c i f e r o u s group on the U.S. s i d e , i s the p l a i n t i f f t r i a l b a r . The Chairman o f the U.S. d e l e g a t i o n l a t e r s a i d , "Our l i n e o f argument was t h a t the general r u l e r e q u i r e d complete r e s t i t u t i o n f o r personal i n j u r i e s and death o r f a i l i n g t h a t , compensation i n damages f o r any i n j u r y done to persons o r p r o p e r t y . " 7 The o t h e r c o u n t r i e s responded w i t h an o f f e r o f $ 1 3 , 3 0 0 . 0 0 and when the U.S. sensed d e f e a t , they asked f o r a t h r e e - d a y delay on the vote to p i e c e t o g e t h e r a compromise. T h i s r e s u l t e d i n a $ 1 6 , 6 0 0 . 0 0 (two x Warsaw) coupled w i t h a s e t t l e m e n t inducement c l a u s e . T h i s a l l o w e d a c o u r t to award the p l a i n -t i f f c o s t s i f the c a r r i e r d i d not w i t h i n s i x months o f the i n c i d e n t o f f e r a s e t t l e m e n t equal to or i n excess o f the c o u r t award. T h i s was proposed as a means to c u r t a i l the s e r i o u s l i t i g a t i o n t h a t f o l l o w e d an a c c i d e n t . The U.S. i n t h i s c l a u s e a c h i e v e d the same r e s u l t as t h a t e n v i s i o n e d by t h e i r o r i g i n a l $ 2 5 , 0 0 0 . 0 0 p r o p o s a l . Under e i t h e r scheme, the U.S. p l a i n t i f f would r e c e i v e $ 1 6 , 6 0 0 . 0 0 because the a t t o r n e y s ' fees were to be p a i d out o f the $ 2 5 , 0 0 0 . 0 0 . By i n j e c t i n g t h i s p r o v i s i o n , the U.S. won a c l e a r v i c t o r y over the p r o t e s t s o f many c o u n t r i e s . The U.S. had l o n g urged t h a t l e g a l c o s t s be r e -c o g n i z e d as a head o f damages but t h i s would not apply i n c o u n t r i e s where (a) c o u r t s d i d not award s e p a r a t e c o s t s , o r (b) l e g a l fees were more r e a s o n a b l e . The l i m i t f o r a U.S. c o u r t was $ 2 5 , 0 0 0 . 0 0 w h i l e a l l o t h e r s were d i s t r i b u t e d above $ 1 6 , 6 0 0 . 0 0 . The U.S. had a c h i e v e d s u b s t a n t i a l l y a l l they came t o the Hague to do, but i t was not w i t h o u t c o s t s i n terms o f s t r a i n e d r e l a t i o n s w i t h o t h e r member s t a t e s . The Chairman o f the U.S. d e l e g a t i o n s a i d i n r e t r o s p e c t , "It i s d i f f i c u l t to put one's f i n g e r d i r e c t l y on the t r u e reason f o r the s p l i t . Undoubtedly the standards o f l i v i n g and the per c a p i t a GNP o f the v a r i o u s c o u n t r i e s c o n c e r n e d , i n comparison to our own, form some p a r t o f the ex-p l a n a t i o n . P o s s i b l y a more d o c t r i n a i r e approach to l e g a l matters on the p a r t o f European.lawmakers i s r e s p o n s i b l e . In any e v e n t , one t h i n g i s c e r t a i n , the f o r e i g n lawyers f e l t d i s t r u s t , dismay and d i s d a i n f o r the death c l a i m compensation i n f o r c e i n the U.S. I have never been a b l e to determine j u s t how t a n g i b l e t h i s l e g a l bogey man was, whether i t was grounded i n a r e a l f e a r o f economic consequences o f i n s u r a n c e c o s t s which g r e a t l y i n c r e a s e d v e r d i c t s might e n t a i l o r whether i t was a d i s l o c a t i o n o f the system they were used to o r p e r h a p s , a p h i l o s o p h i c a l i n s i s t e n s e t h a t human l i f e c o u l d not be measured i n money." 0 D e s p i t e the p r o v i s i o n s t h a t the P r o t o c o l would not become e f f e c t i v e u n t i l r a t i f i e d by 30 c o u n t r i e s , the u n i f o r m i t y o f the Warsaw Convention 9 throughout the w o r l d was d e s t r o y e d . Canada adhered to the i n s t r u m e n t as have s e v e n t y - f i v e o t h e r s t a t e s . (Appendix B c o n t a i n s a d e t a i l e d examinat ion o f the s t r u c t u r e o f the Hague P r o t o c o l ) 2 7a. TABLE ONE Passenger Recover ies from U.S. C a r r i e r s * Year 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 Average per Passenger (Warsaw) $ 8 , 0 6 1 . 0 0 3 , 1 5 4 . 0 0 6 , 4 3 3 . 0 0 8 , 6 9 6 . 0 0 1 0 , 5 7 6 . 0 0 5 , 8 2 8 . 0 0 4 , 7 2 6 . 0 0 4 , 8 1 2 . 0 0 7 , 6 5 4 . 0 0 7 , 4 7 0 . 0 0 4 , 6 5 3 . 0 0 6 , 0 0 0 . 0 0 8 , 3 0 0 . 0 0 8 , 1 4 2 . 0 0 Average per Passenger (Non-Warsaw) $ 1 1 , 8 5 2 . 0 0 1 4 , 3 5 0 . 0 0 2 3 , 3 0 1 . 0 0 3 8 , 1 1 1 . 0 0 1 9 . 9 4 5 . 0 0 2 9 , 0 3 5 . 0 0 3 0 , 1 1 8 . 0 0 5 7 , 6 0 1 . 0 0 7 9 , 8 5 7 . 0 0 4 8 , 3 7 8 . 0 0 1 4 , 8 8 0 . 0 0 6 3 , 4 3 4 . 0 0 2 6 , 8 1 6 . 0 0 7 6 , 6 5 2 . 0 0 L o w e n f e l d . L i a b i l i t y o f C a r r i e r s f o r A c c i d e n t s i n I n t e r n a t i o n a l F l i g h t s  Warsaw C o n v e n t i o n , 1972, p. 106 The TABLE TWO D i s t r i b u t i o n o f Compensation S e t t l e m e n t s (Death and In jury) f o l l o w i n g A i r T r a n s p o r t A c c i d e n t s - 1965* S t a t e Less than $ 1 7 , 0 0 0 . $ 1 7 - 3 3 , 0 0 0 . $ 3 3 - 5 0 , 0 0 0 . $ 5 0 - 7 5 , 0 0 0 . $ 7 5 - 1 0 0 , 0 0 0 . $100,000.+ A r g e n t i n a 100.0% n i l n i l n i l n i l n i l F i n l a n d 100.0% n i l n i l n i l n i l n i l France 90.3% .2% 7.8% 1.5% n i l . 1 % U n i t e d Kingdom 77.0% 6.9% 1.6% 2.5% 1.6% 10.4% U n i t e d S t a t e s : Warsaw, Death 80.9% 4.8% 6.8% 3.1% 4.4% n i l Non-Warsaw, Death 4 2 . 1 % 17.2% 8.6% 7.1% 5.4% 19.6% Warsaw, S e r i o u s I n j u r y 97.5% 2.0% .7% n i l n i l n i l Non-Warsaw, S e r i o u s I n j u r y 71.5% 12.5% 7.5% 2.8% 1.6% 4.1 Sweden 93.0% 7.0% n i l n i l n i l n i l Poland 90.0% 6.0% 2.0% 1.0% n i l n i l Jordan 100.0% n i l n i l n i l n i l n i l Japan 100.0% n i l n i l n i l n i l n i l C z e c h o s l a v a k i a 98.0% 2.0% n i l n i l n i l n i l Canada (Non A i r T r a n s p o r t ) 60.8% 16.0% 15.2% 4.8% 2.4% . 8 Death *Lowenfeld, L i a b i l i t y o f C a r r i e r s f o r A c c i d e n t s i n I n t e r n a t i o n a l F l i g h t - The Warsaw C o n v e n t i o n , 1972, p. 48 CHAPTER FIVE U.S. WITHDRAWAL FROM WARSAW Having achieved t h e i r o b j e c t i v e a t the Hague, the U.S. moved very s l o w l y towards r a t i f i c a t i o n . Being a t r e a t y , i t r e q u i r e d the approval o f the P r e s i d e n t w i t h the "advice and consent" o f a t w o - t h i r d s m a j o r i t y o f the Senate. Both the Eisenhower and Kennedy a d m i n i s t r a t i o n s f a i l e d to a c t on the i n s t r u m e n t the U.S. had e n g i n e e r e d . T h i s was due to widespread o p p o s i t i o n t h a t had a r i s e n among the American populace a g a i n s t p a r t i c i p a t i o n i n any l i m i t e d l i a b i l i t y scheme. Leading newspapers such as The New York Times urged d e n u n c i a t i o n o f the C o n v e n t i o n . Most i m p o r t a n t l y , the U.S. c o u r t s began t h e i r a t t a c k on the i n s t r u m e n t . A New York c o u r t s a i d , "The Warsaw Convention was a d e v i c e to s u b s i d i z e the then i n f a n t i n d u s t r y o f i n t e r n a t i o n a l a i r t r a n s p o r t i t i s a s t r a n g e c o n -cept to us i n the U.S. t h a t the s u b s i d y s h o u l d be taken out o f the widows and orphans o f the p a s s e n g e r s . 1 , 1 The a t t a c k took the form o f f i n d i n g , a t severe c o s t to the f a c t s of the c a s e , grounds f o r u n l i m i t e d l i a b i l i t y . The Lisj_ case p r o v i d e s a good e x a m p l e . 2 The " r a t i o " o f the lower c o u r t was t h a t the p r i n t s i z e o f the n o t i c e c o n s t i t u t e d inadequate w a r n i n g . However, one o f the d i s s e n t i n g judges s a i d , "The m a j o r i t y do not approve o f the terms o f the t r e a t y and t h e r e f o r e by j u d i c i a l f i a t , they r e w r i t e i t . " Another judge s a i d , "The q u e s t i o n f a r t ranscends the q u e s t i o n o f the type used i n the a i r p l a n e t i c k e t . The r e a l i s s u e i s whether the c o u r t s o f a member s t a t e should be a l l o w e d to r e w r i t e the Convention because o f t h e i r d i s a p p r o v a l o f a p a r t i c u l a r p r o v i s i o n . " 4 T h i s case sent shock waves o f dismay throughout the o t h e r member n a t i o n s . Canada and a number o f o t h e r s t a t e s i n t e r v i e w i n g as amicus c u r i a e when the case was on appeal to the U.S. Supreme C o u r t , took the stand t h a t the terms should be changed by m u l t i l a t e r a l n e g o t i a t i o n s not by the c o u r t s . 5 The case was s u s t a i n e d by a d i v i d e d c o u r t (4 to 4 ) . T h i s p r o p e n s i t y o f the U.S. c o u r t s to f i n d e x c l u s i o n s o f the l i m i t was termed by Rene Mankiewicz o f Canada, "the j u d i c i a l d i s u n i f i c a t i o n o f i n t e r n a t i o n a l law." In 1965, a U.S. f e d e r a l body, the IGIA ( I n t e r a g e n c y Group on I n t e r n a t i o n a l A v i a t i o n ) composed o f r e p r e s e n t a t i v e s o f the FAA, CAB, S t a t e , Defence, Commerce and Labor departments developed a proposal which they f e l t would a s s i s t the P r o t o c o l i n g a i n i n g Senate a p p r o v a l . They were aware t h a t i n the c u r r e n t pub-l i c o p i n i o n c l i m a t e , the P r o t o c o l by i t s e l f c o u l d never g a i n acceptance i n the Senate. In a d d i t i o n to the $ 1 6 , 6 0 0 . 0 0 a v a i l a b l e under the Hague r u l e s , the * scheme p r o v i d e d f o r an automatic $ 5 0 , 0 0 0 . 0 0 i n s u r a n c e payment to v i c t i m s o r s u r v i v o r s o f an a c c i d e n t . The p o l i c y was i n the form o f a c c i d e n t r a t h e r than l i a b i l i t y i n s u r a n c e and a p p l i e d o n l y to U.S. f l a g - c a r r i e r s , but the IGIA f e l t c o m p e t i t i v e p r e s s u r e s would f o r c e o t h e r c a r r i e r s o p e r a t i n g i n t o the U.S. to j o i n . The A i r T r a n s p o r t A s s o c i a t i o n o f Am6r l C9 opposed the scherne 3 s d i d the 1 nsur9nee l n d u s t r y 5 the 1911 e r f e9 r i ncj cjo v ernment e n t r y i n t o the 1 n s ur9nee f i e l d . T h i s was a complete r e v e r s a l from 1961 when a number o f U.S. c a r r i e r s i n i t i a t e d 3 vo 1 u n tfl ry Quest s e t t l em en t p o l l cy 9nd we re opposed by I ATA s n d the CAB who c l a i m e d i t was an unlawful r e b a t e . 6 Hedrincjs on the proposal were to be h e l d before the Senste Foreicjn R e l a t i o n s Committe which would then recommend to the Senate whether o r not to 9pprove the instrument• The Comm111ee h e l d 16 to 1 i n f3v o r o f r91IfIc911on^ pro vi ded I t WHS combi ned wi th the i nsurdnce scheme* The one necjsti ve vote * $ 2 5 , 0 0 0 . 0 0 f o r m i n o r s . / was t h a t o f S e n a t o r Homer Capehart whose son ,and d a u g h t e r - i n - l a w were k i l l e d on a f l i g h t s u b j e c t to Warsaw r u l e s . A l though the U.S. c o u r t s found w i l f i l misconduct and awarded $ 2 7 0 , 0 0 0 . 0 0 , the regime o f l i m i t e d l i a b i l i t y had gained a powerful enemy i n S e n a t o r Capehart . The i n s u r a n c e scheme however f l o u n d e r e d i n the Commerce committee due to v i g o r o u s i n t e r v e n t i o n s from many i n t e r e s t s . I t q u i c k l y became apparent t h a t the supplementary i n s u r a n c e p r o v i s i o n would not s u r v i v e and the P r o t o c o l would be l e f t t o f a c e a Senate vote a l o n e . The S t a t e Department knew t h a t the Senate vote was imminent and t h a t the P r o t o c o l s t r i p p e d o f the i n s u r a n c e scheme was c e r t a i n to be d e f e a t e d . The department d i d not want to : : r i s k d e f e a t o f a major t r e a t y nor d i d i t want to urge a d v i c e and consent o f an inadequate measure. The S t a t e Department then recommended through the IGIA to the c a r r i e r s t h a t i n o r d e r to a v o i d the imminent d u n u n c i a t i o n o f the Warsaw C o n v e n t i o n , they s h o u l d form a s o l u t i o n among themselves i n the nature o f a commitment to a s s i s t the U.S. government i n b r i n g i n g about an e a r l y d i p l o m a t i c conference to i n c r e a s e * the Warsaw l i m i t to $100,000.00 and i n the i n t e r i m to v o l u n t a r i l y accept a l i m i t o f $100,000.00 r a t h e r than $ 8 , 3 0 0 . 0 0 . T h i s was to be accompl ished under A r t i c l e 22 ( i ) o f the Convention which permits the a i r c a r r i e r and the passenger to agree on a h i g h e r l i m i t o f l i a b i l i t y . Legal c r e d u l i t y was s t r e t c h e d to u t i l i z e t h a t a r t i c l e . I t o r i g i n a l l y e n v i s i o n e d an express agreement being reached between a p a r t i c u l a r passenger and the c a r r i e r , not a u n i l a t e r a l w a i v i n g by the l a t t e r . The S t a t e Department j u s t i -f i e d i t by s t a t i n g t h a t i n g i v i n g the passenger a t i c k e t w i t h n o t i c e o f a • s p e c i a l agreement, i t i s assumed t h a t the passenger i n a c c e p t i n g d e l i v e r y and *The $ 1 0 0 , 0 0 0 . 0 0 f i g u r e was o b t a i n e d by t o t a l l i n g the $ 1 6 , 6 0 0 . 0 0 a v a i l a b l e under the Hague r u l e s , p l u s the $ 5 0 , 0 0 0 . 0 0 i n s u r a n c e c l a u s e , p l u s a one-t h i r d a t t o r n e y s ' f e e . boarding the a i r c r a f t , consents to the terms o f the c o n t r a c t o f c a r r i a g e . 7 T h i s has not been t e s t e d i n a c o u r t but under the common l a w , i t i s . a q u e s t i o n o f f a c t not o f law as t o whether a c e r t a i n n o t i c e to passengers o f s p e c i a l c o n d i t i o n s i n the c o n t r a c t o f c a r r i a t e l i m i t i n g a c a r r i e r ' s l i a b i l i t y i s s u f f i -c i e n t to make i t b i n d i n g on the passenger. The U.S. c a r r i e r s d i s c u s s e d t h i s o v e r t u r e and r e p l i e d t h a t they would o n l y waive the l i m i t to $ 5 0 , 0 0 0 . 0 0 and even t h a t was dependent on the f o r e i g n c a r r i e r s a g r e e i n g to a s i m i l a r l i m i t . Having been defeated i n t h i s a t t e m p t , the S t a t e Department o f f i c i a l s met w i t h the Senate F o r e i g n R e l a t i o n s Committee; the l a t t e r , now t a k i n g a hard l i n e , agreed to t a b l e the P r o t o c o l i n d e f i n a t e l y g i v i n g the S t a t e Depart -ment c a r t e blanche to denounce the Warsaw C o n v e n t i o n , i f i t saw f i t and to choose the date i f i t so d e c i d e d . The U.S. government decided t h a t the most a p p r o p r i a t e course o f a c t i o n was to withdraw from the Warsaw C o n v e n t i o n , an inst rument w i t h l i m i t s o n l y h a l f as high as the r e j e c t e d P r o t o c o l , and to r e l y on the common law to p r o -t e c t t r a v e l l i n g Americans. The d e n u n c i a t i o n was f i l e d w i t h the P o l i s h government on November 1 5 t h , 1965 so t h a t the 1966 summer t o u r i s t market would not be covered by the Conven-t i o n , the n o t i c e becoming e f f e c t i v e on May 1 5 t h , 1966. In a press r e l e a s e dated November 1 5 t h , 1965, the U.S. S t a t e Department s a i d , "The U.S. would be prepared to withdraw the n o t i c e o f d e n u n c i a t i o n d e p o s i t e d today i f p r i o r to i t s e f f e c t i v e date o f May 1 5 t h , 1966, t h e r e i s a reasonable p r o s p e c t o f an i n t e r n a t i o n a l agreement on l i m i t s o f l i a b i l i t y i n i n t e r n a t i o n a l a i r t r a n s p o r t , i n the area o f $ 1 0 0 , 0 0 0 . 0 0 per passenger o r on uniform r u l e s but w i t h o u t any l i m i t o f l i a b i l i t y and i f pending the e f f e c t i v e -ness o f such i n t e r n a t i o n a l agreement t h e r e i s a p r o v i s i o n a l agreement among the p r i n c i p a l i n t e r n a t i o n a l a i r l i n e s w a i v i n g the l i m i t s o f l i a b i l i t y up to $ 7 5 , 0 0 0 . 0 0 per p a s s e n g e r . " 8 The r e a s o n i n g behind the U.S. d e c i s i o n to withdraw and r e l y on the common law i s c e n t r a l to any a n a l y s i s o f the c u r r e n t s i t u a t i o n . The U.S. i s the key f i g u r e i n any i n t e r n a t i o n a l agreement i n t h i s area and any p r o -posal aimed a t acceptance must a c c u r a t e l y assess the c o s t s and b e n e f i t s o f p a r t i c i p a t i o n i n view o f each s t a t e , p a r t i c u l a r l y the U.S. S e v e r a l a s p e c t s o f the law r e l a t i n g to i n t e r n a t i o n a l a i r a c c i d e n t s had changed s i n c e 1929 which convinced the U.S. t h a t on the balance t h e i r c i t i z e n s ' i n t e r e s t s were b e t t e r served o u t s i d e the agreement. ( i ) LEX LOCUS DELECTI RULE T r a n s p o r t a t i o n cases w i t h t h e i r f o r t u i t o u s l o c u s d e l e c t i had long bothered j u r i s t s as they saw the r u l e was not conducive to j u s t i c e i n these i n s t a n c e s . Then an American c o u r t i n K i l b e r g v Northeast A i r l i n e s a p p l i e d the l e x f o r i to a case i n v o l v i n g f o r e i g n e l e m e n t s , not because i t was the law o f the forum but because "on a grouping o f c o n t a c t s " , the c o u r t f e l t the New York (forum) laws should a p p l y to a case whose major c o n t a c t s were w i t h t h a t s t a t e . 9 Contacts c o n s i d e r e d i n precedence to the l o c u s d e l e c t i were the domi-c i l e o f the v i c t i m o r the s u r v i v o r s and the p l a c e o f c o n t r a c t i n g . U.S. c o u r t s s i n c e then have used the "contacts" theory because they f e e l s t a t e s o t h e r than the l o c u s d e l e c t i have a h i g h e r i n t e r e s t i n the d i s -p o s i t i o n o f the c a s e . 1 0 T h i s i s i n l i n e w i t h the p r a c t i c e o f the c o u r t s i n any country to r e f u s e t o e n f o r c e a f o r e i g n law t h a t was c o n t r a r y to p u b l i c p o l i c y . 1 1 T h i s homeward t r e n d o f the c o u r t s to the l e x f o r i i s a d e s i r e t o a p p l y , i f p o s s i b l e , the law o f the p l a i n t i f f s ' d o m i c i l e , the j u r i s d i c t i o n which i s most concerned w i t h the r i g h t s i n the area o f t o r t compensation. The E n g l i s h c o u r t s adopted s i m i l a r r e a s o n i n g i n C h a p l i n v Boys when they r e j e c t e d the a b s o l u t e r u l e ocf the l e x l o c u s d e l e c t i and i n d i c a t i o n s are t h a t t h i s case w i l l be f o l l o w e d i n C a n a d a . ^ Al though not a l l U.S. s t a t e s have adopted the grouping o f c o n t a c t s r u l e , i n most cases an American p l a i n t i f f c o u l d g a i n j u r i s d i c t i o n i n a U.S. c o u r t which had done s o . Even i f the case o f the American was t r i e d under the s u b s t a n t i v e r u l e s o f a f o r e i g n j u r i s d i c t i o n , the laws o f these s t a t e s had r a d i c a l l y im-proved s i n c e 1929 al though they remained l e s s f a v o r a b l e to a p l a i n t i f f than American laws. In B r a z i l , f o r example, a p l a i n t i f f was once l i m i t e d to a recovery o f l e s s than $ 2 0 0 . 0 0 1 3 but i n 1 9 6 3 , the l i m i t was r a i s e d to 150 times j^^ g minimum month 1 y w£tQe cuK*K*ently i n e f fect i n t h ci t countY*y ^^ I f ci n Arne X s i c 3 n Wei s effected hy ^ "1 i m i t in ct locdl w vo ncj f u 1 de ci t h stcttute i t would in msny cdses exceed the l i m i t contained i n the Convention ( i i ) RES IPSA LOCQUITUR In p r o v i d i n g f o r the presumed n e g l i g e n c e o f the c a r r i e r , the Convention had g r e a t l y a s s i s t e d the p l a i n t i f f under the procedure a p p l i c a b l e i n 1929. However, C i v i l Law c o u r t s used a s i m i l a r presumption p r i o r to 1929 and by 1965, the Common Law had developed an e q u i v a l e n t r u l e . Common Law c o u r t s , i n c l u d i n g the U . S . , now a p p l i e d the concept o f res  i p s a l o c q u i t u r - "the t h i n g speaks f o r i t s e l f " - i n a i r a c c i d e n t l i t i g a t i o n . In a general n e g l i g e n c e t r i a l , the p l a i n t i f f must prove breach o f a l e g a l duty to t a k e c a r e which i s very d i f f i c u l t i n a i r a c c i d e n t s d e s p i t e the f a c t i t seemed c l e a r n e g l i g e n c e must have been i n v o l v e d . The r u l e o f res i p s a l o c q u i t u r r e v e r s e s the burden o f p r o o f making i t i n s u f f i c i e n t f o r the defendant to show t h a t t h e r e were s e v e r a l h y p o t h e t i c a l causes o f an a c c i d e n t c o n s i s t e n t w i t h the absence o f n e g l i g e n c e . He must go f u r t h e r and e i t h e r show t h a t t h e r e was no n e g l i g e n c e o r g ive an e x p l a n a t i o n o f the cause o f the a c c i d e n t which d i d not connote n e g l i g e n c e . 1 5 Should the defendant d i s c h a r g e the burden, i t i s again f o r the p l a i n t i f f to prove t h a t the i n j u r y was caused by the defendant's neg-l i g e n c e . 1 6 Res i p s a l o c q u i t u r had long been a p p l i e d to o t h e r forms o f human a c t i -v i t y and a i r t r a n s p o r t became one o f those a c t i v i t i e s when i t s l e v e l o f s a f e t y and c e r t a i n t y a t t r a c t e d the a p p l i c a t i o n . 1 7 ( i i i ) JURISDICTION The c e n t r a l p o s i t i o n o f the U.S. i n terms o f a i r t r a f f i c g e n e r a t i o n and p a t t e r n s reduced s u b s t a n t i a l l y the n e c e s s i t y o f p a r t i c i p a t i o n i n a Conven-t i o n , the terms o f which were u n s u i t e d to i t s needs. F i f t y per cent o f i n t e r -18 n a t i o n a l revenue passenger m i l e s are o f U.S. o r i g i n o r d e s t i n a t i o n . One h a l f o f t h i s market i s s e r v i c e d by f o r e i g n c a r r i e r s 1 9 which p l a c e s the U.S. i n an e x c e l l e n t p o s i t i o n to e x e r c i s e j u r i s d i c t i o n over most a i r l i n e s o f the w o r l d . In i n t e r n a t i o n a l l a w , the general r u l e i s t h a t a c o u r t has j u r i s d i c t i o n : (a) Over d i s p u t e s i n r e s p e c t o f which i t can g i v e an e f f e c t i v e judgment; (b) Over d i s p u t e s which the p a r t i e s t h e r e t o v o l u n t a r i l y submit t o i t s j u r i s -d i c t i o n ; (c) Over persons o u t s i d e the o r d i n a r y j u r i s d i c t i o n i n cases where Order I I , Rule I o f the Rules o f Court would apply making s e r v i c e abroad p e r m i s s a b l e . Cases under t h i s head i n c l u d e t o r t s committed o r c o n t r a c t s o r i g i n a t i n g i n the j u r i s d i c t i o n . P r o t e c t i o n f o r U.S. c i t i z e n s from the a p p l i c a t i o n o f l e s s f a v o r a b l e f o r e i g n l a w , now t h a t the r u l e o f l e x l o c u s d e l e c t i w a s . b r o k e n , v a r i e d d i r e c t l y w i t h the a b i l i t y o f the U.S. c o u r t s to o b t a i n j u r i s d i c t i o n i n t h e i r c a s e s . Whereas under the terms o f the Convention j u r i s d i c t i o n was s e v e r e l y l i m i t e d , the U.S. o p e r a t i n g o u t s i d e the Convention would u t i l i z e t h e i r c e n t r a l t r a f f i c p o s i t i o n to assume j u r i s d i c t i o n . O p e r a t i n g under the r u l e s o f i n t e r n a t i o n a l l a w , the U.S. c o u r t s c o u l d guarantee i n most cases t h a t a U.S. p l a i n t i f f would r e c e i v e a t r i a l i n a U.S. c o u r t . The b e n e f i t r e c e i v e d by American v i c t i m s and s u r v i v o r s was a t a high c o s t to a l l i n t e r n a t i o n a l c a r r i e r s . S i n c e j u r i s d i c t i o n r e l a t e d s o l e l y to c o n t r o l over the d e f e n d a n t , not o n l y would Americans seek a U.S. t r i a l but so would p l a i n t i f f s from a l l over the w o r l d "forum shopping" to take advantage o f the high U.S. s e t t l e m e n t s . P a r t i c i p a t i o n i n an i n t e r n a t i o n a l agreement such as the Convention c o s t the U.S. a r i g h t o f access f o r i t s c i t i -zens to t h e i r n a t i o n a l c o u r t s . I t was apparent to the o t h e r n a t i o n s t h a t the U.S. would assume j u r i s -d i c t i o n : (a) Over a i r l i n e s i n r e s p e c t o f any f l i g h j t from o r d e s t i n e d to t e r m i n a t e i n the U.S. as shown on the t i c k e t ; i (b) Over a i r l i n e s f o r any f l i g h t where the t i c k e t had been purchased i n the U.S. from a t i c k e t o f f i c e o r agency; (c) Over a i r l i n e s doing s u b s t a n t i a l b u s i n e s s i n the U.S. e i t h e r through f l i g h t o p e r a t i o n s o r by m a i n t a i n i n g a t i c k e t o r a d v e r t i s i n g o f f i c e even i f none o f the o r i g i n , d e s t i n a t i o n o r t i c k e t purchases o c c u r r e d i n the U . S . ; (d) In any s t a t e where the defendant i s doing business a n d , t h e r e f o r e , s u b j e c t -i n g i t s e l f to j u r i s d i c t i o n , even an i n t e r l i n e booking agency, and even i f a l l f l i g h t s took p l a c e o u t s i d e the U . S . ; (e) Under "long arm s t a t u t e s " which s p e c i f y t h a t the defendant i s " t r a n s a c t i n g b u s i n e s s " i n the j u r i s d i c t i o n , d e f i n e d i n a w i d e r sense than "doing b u s i n e s s " . This would cover an a i r l i n e which w r i t e s a t i c k e t f o r a c o n t i n u i n g f l i g h t w i t h the defendant a i r l i n e . The journey would have to o r i g i n a t e i n the forum but the defendant may be any one o f the s u c c e s s i v e c a r r i e r s . D e n u n c i a t i o n o f the Convention promised these b e n e f i t s and c o s t s to the r e s p e c t i v e p a r t i e s and t h i s f a c t must be i n t e g r a t e d i n t o any proposed s o l u t i o n to c u r r e n t problems. ( i v ) INTERNATIONAL COOPERATION C o u n t e r i n g the b e n e f i t s p e r c e i v e d by the U.S. i n t h e i r a c t i o n s was the element o f i n t e r n a t i o n a l c o o p e r a t i o n . In a t r a n s n a t i o n a l a c t i v i t y such as a i r t r a n s p o r t , i t i s s e l f - e v i d e n t t h a t p r a c t i c a l i t i e s demand a uni form law based on reasoned l e g a l r e l a t i o n s . 2 0 There are two main elements i n c o o p e r a t i o n i n t h i s c o n t e x t : (a) the value o f uni form l a w , and (b) a s p i r i t o f i n t e r n a t i o n a l g o o d - w i l l between s t a t e s . The U.S. government does not p l a c e a high v a l u e on the former but at¬taches massive s i g n i f i c a n c e to the l a t t e r . A S t a t e Department w i t n e s s i n the 1965 Senate hear ings s a i d , Perhaps the most s e r i o u s e f f e c t o f d e n u n c i a t i o n would be the damage t h a t such a c t i o n would have upon the p o s i t i o n and p r e s t i g e o f the U.S. as a w o r l d l e a d e r i n the promotion o f i n t e r n a t i o n a l c o o p e r a t i o n i n important a v i a t i o n m a t t e r s . " 2 1 The t h i n k i n g behind t h a t statement holds the key t o any f u t u r e agreement on a worldwide b a s i s . When the t a n g i b l e advantages the U.S. d e r i v e s from a u n i v e r s a l l i a b i l i t y arrangement are added up, the aggregate i s s t r i k i n g l y s m a l l . U.S. c i t i z e n s do not need the p r o t e c t i o n o f the agreement, a t l e a s t not a t the c o s t o f l i m i t e d judgments, and the U.S. c a r r i e r s , as w i l l be demonstrated l a t e r , are not h e a v i l y burdened w i t h l i a b i l i t y premiums. I t i s t h i s intangibT.ee f a c t o r o f c o o p e r a t i o n o r w o r l d s t a n d i n g t h a t comprised the m a j o r i t y o f U.S. m o t i v a t i o n to p a r t i c i p a t e i n the Convention and i t i s t h i s same m o t i v a t i o n t h a t c o n t i n u e s to a t t r a c t them towards a r e s o l u t i o n o f the c u r r e n t problem. CHAPTER SIX THE MONTREAL AGREEMENT When the U.S. f i l e d i t s d e n u n c i a t i o n w i t h the P o l i s h government the r e a c t i o n throughout i n t e r n a t i o n a l c i v i l a v i a t i o n was s h a r p . I f c o n d i t i o n s had changed s i n c e 1929 to reduce the p o t e n t i a l b e n e f i t s f o r a U.S. passenger , they had worked i n the o p p o s i t e d i r e c t i o n f o r the o t h e r member s t a t e s . A p a r t from the l o s s o f u n i f o r m i t y and i n t e r n a t i o n a l c o o p e r a t i o n , a more pragmatic problem f a c e d the f o r e i g n s t a t e s and t h e i r c a r r i e r s . Aware t h a t j u r i s d i c t i o n would now r e l a t e t o c o n t r o l over the c a r r i e r , the c a r r i e r s knew t h e i r o p e r a t i o n s i n t o the U.S. would expose them to e x e c u t i o n o f U.S. judgments - the u l t i m a t e t e s t o f j u r i s d i c t i o n . Easy access to U.S. c o u r t s , not o n l y by U.S. n a t i o n a l s but a l s o f o r e i g n n a t i o n a l s "forum s h o p p i n g " , i n c o n j u n c t i o n w i t h the use o f the l e x f o r i , promised a l i t i g a t i o n f r e e - f o r - a l l a t the s e r i o u s c o s t to c a r r i e r s most o f which c o u l d i l l - a f f o r d i t . I f the U.S. c o u r t s d e c l i n e d to a p p l y the law o f the forum i n the case o f a n o n - r e s i d e n t p l a i n t i f f , they would p l a y the r o l e o f a d i s i n t e r e s t e d t h i r d s t a t e , g u i d e d , o f c o u r s e , by t h e i r own concept o f j u s t i c e . Damages f o r a n o n - r e s i d e n t p l a i n t i f f would not be as high as t h a t recovered by an American due to d i f f e r e n c e s i n s o c i o - e c o n o m i c backgrounds but they would be much h i g h e r than those a v a i l a b l e i n the p l a i n t i f f ' s d o m i c i l e . Faced w i t h t h i s s e r i o u s economic t h r e a t by the U . S . , the member n a t i o n s o f ICAO met t o g e t h e r i n Montreal i n February o f 1966, t h r e e months before the d e n u n c i a t i o n would become e f f e c t i v e , to attempt to f o r m u l a t e a p l a n a c c e p t a b l e both to themselves and the U.S. The m e e t i n g , to be d e a l t w i t h i n a l a t e r c h a p t e r was i n c o n c l u s i v e . The n a t i o n s were now aware o f the consequences o f a U.S. withdrawal but t h i s was not adequate i n c e n t i v e f o r an agreement on a p l a n s i m i l a r to t h a t s e t out i n the S t a t e Department press r e l e a s e . IATA, the w o r l d a s s o c i a t i o n o f a i r c a r r i e r s , had been a c t i v e i n the i n t e r i m , i n the person o f S i r W i l l i a m H i l d r e d , i t s D i r e c t o r - G e n e r a l . In the f a l l o f 1965, S i r W i l l i a m had by means o f a mail vote o b t a i n e d agreement o f most IATA members to a $ 5 0 , 0 0 0 . 0 0 l i m i t , but the CAB r e j e c t e d t h a t proposal as being c o n t r a r y to the U.S. p u b l i c i n t e r e s t . Both IATA and ICA0 having t r i e d and f a i l e d , i t seemed c e r t a i n t h a t the U.S. d e n u n c i a t i o n would go i n t o e f f e c t . T h i s f a t e appeared to be s e a l e d when on March 7 t h , 1966, the U.S. government announced t h a t i n a d d i t i o n to t h e i r de-mands f o r a r a i s e d l i m i t , they r e q u i r e d t h a t l i a b i l i t y up to t h a t l i m i t be a b s o l u t e . 1 A r t i c l e 20 (1) o f the Convention which a l l o w s the c a r r i e r to escape l i a b i l i t y i f he proves t h a t a l l necessary measures were taken o r t h a t i t was i m p o s s i b l e to take such measures, would not be a v a i l a b l e t o the c a r r i e r below the l i m i t r e q u i r e d i n the p r o p o s a l . Without A r t i c l e 20 ( 1 ) , A r t i c l e 17 stands * alone - "the c a r r i e r s h a l l be l i a b l e . " The s t a t e s which had once b e l i e v e d the U.S. was not s e r i o u s i n i t s d e n u n c i a t i o n t a c t i c now b e l i e v e d the U.S. was • . 2 s e t t i n g i m p o s s i b l e demands to l e n d j u s t i f i c a t i o n to a u n i l a t e r a l a c t i o n . S i r W i l l i a m was not to be d e t e r r e d . He spoke to U.S. S e c r e t a r y o f S t a t e Mann and a s k e d , i f he was a b l e to g a i n agreement o f the major i n t e r n a t i o n a l c a r r i e r s ( i n c l u d i n g a l l those t h a t f l e w i n t o the U.S. o r c a r r i e d s u b s t a n t i a l U.S. o r i g i n a t i n g passenger l o a d s ) to a l i m i t o f $ 7 5 , 0 0 0 . 0 0 and a b s o l u t e l i a b i l i t y , would the U.S. withdraw t h e i r n o t i c e ? Mann assured him t h a t i f t h i s o c c u r r e d he would do a l l p o s s i b l e , even a t t h i s l a t e d a t e , to withdraw. S i r W i l l i a m then began a f u r i o u s campaign, a s k i n g the c a r r i e r s to weigh * In o n l y 10 out o f 212 i n t e r n a t i o n a l a i r a c c i d e n t s (1951 - 1967) was A r t i c l e 20 (1) used by the c a r r i e r . 3 the c o s t o f d e n u n c i a t i o n a g a i n s t the h i g h e r l i m i t and then to c o n s i d e r h i s p r o p o s a l . Not o n l y d i d c a r r i e r approval have to be o b t a i n e d but the U.S. r e q u i r e d t h a t the n a t i o n a l government o f each c a r r i e r c o u n t e r s i g n to ensure t h a t the governments would not counterdemand the consent once the n o t i c e was w i t h -drawn. He managed to gain c o n s e n t , i n the l a s t days before May 1 5 t h , o f a l l but f i v e o f the c a r r i e r s r e q u i r e d by the U.S. to agree to the p r o p o s a l . Three o f the o b j e c t i o n s were l i m i t e d the a b s o l u t e l i a b i l i t y p r o v i s i o n w h i l e the o t h e r two were non-IATA members and they soon f e l l i n l i n e and consented. With o n l y the t h r e e q u a l i f i e d acceptances d e s t r o y i n g the u n a n i m i t y , S i r W i l l i a m p r e s e n t e d h i s work to the IGIA. On F r i d a y , May 1 3 t h , the IGIA r e a l i z e d i t c o u l d not postpone i t s d e c i s i o n any l o n g e r . E i t h e r the proposal would be r e j e c t e d a t the c o s t o f j u s t i f i e d resentment on the p a r t o f the 23 c o u n t r i e s t h a t had a g r e e d , e s s e n t i a l l y on the ground t h a t C o n g r e s s i o n a l and p u b l i c o p p o s i t i o n was too g r e a t , o r i t c o u l d a c c e p t i t on the b a s i s o f i t s j u d g -ment t h a t , on the b a l a n c e , the arrangement o f f e r e d the best p r o t e c t i o n f o r the p u b l i c . The d e c i s i o n was made a t the l a s t minute to accept the proposal and w i t h -draw the n o t i c e o f d e n u n c i a t i o n . In a S t a t e Department press r e l e a s e o f May 1 3 t h , 1966, the U.S. government concluded "that the i n t e r e s t s o f the U.S. t r a v e l l i n g p u b l i c and o f i n t e r n a t i o n a l c i v i l a v i a t i o n would be b e s t served by c o n t i n u i n g w i t h i n the framework o f the Warsaw Convention under a p l a n the e s s e n -A t i a l f e a t u r e s o f which are " The " c a r r i e r " s o l u t i o n was c a l l e d the Montreal Agreement because o f i t s c l o s e c o n n e c t i o n w i t h IATA and i t s Montreal h e a d q u a r t e r s . * I t c o n t a i n e d the f o l l o w i n g P r o v i s i o n s : (a) the agreement was to a p p l y to a l l i n t e r n a t i o n a l t r a f f i c o f the s i g n a t o r y a i r l i n e s which a c c o r d i n g to the t i c k e t i n c l u d e d a p o i n t i n the U.S. as * S i r W i l l i a m H i l d r e d c a l l e d i t "the shotgun wedding". the p o i n t o f o r i g i n , d e s t i n a t i o n o r agreed s t o p p i n g p l a c e ; (b) the l i m i t o f l i a b i l i t y i s $ 7 5 , 0 0 0 . 0 0 i n c l u s i v e o f c o s t s u n l e s s i t i s i s s u e d by a c o u r t where p r o v i s i o n i s made f o r s e p a r a t e c o s t s , i n which case the l i m i t is" $ 5 8 , 0 0 0 . 0 0 . S e v e r a l aspects o f the agreement s h o u l d be n o t e d . The scheme i s termed " i n t e r i m " which i m p l i e d t h a t the U.S. viewed i t as a temporary s o l u t i o n u n t i l agreement was reached on a new C o n v e n t i o n . I t has no t e r m i n a t i o n d a t e , i t s u s e f u l l i f e i s measured by how l o n g i t meets U.S. needs. The agreement a p p l i e s o n l y to s i g n a t o r y c a r r i e r s . An o r i g i n a t i n g o r s u c c e s s i v e c a r r i e r which has not s i g n e d and c a r r i e s a passenger whose f l i g h t comes under the terms o f the agreement i s l i a b l e o n l y to the Warsaw o r Hague l i m i t s . The q u e s t i o n e d l e g a l b a s i s f o r a " s p e c i a l " agreement between the p a s -senger and c a r r i e r i s a t l e a s t t a c i t l y s a n c t i o n e d i n Canada by the CTC which approved the t a r i f f s o f the Canadian c a r r i e r s c o n t a i n i n g the p r o v i s i o n s o f the Montreal Agreement. The l a c k of worldwide u n i f o r m i t y which arose a f t e r the Hague Conference was compounded by the super imposing o f the Montreal Agreement on the Warsaw base. For a passenger t h i s c r e a t e s an i n t e r n a t i o n a l l o t t e r y . Four passengers on a c r o s s - c o u n t r y f l i g h t c o u l d each be s u b j e c t to a d i f f e r e n t l i a b i l i t y regime. Passenger A - (Vancouver - M o n t r e a l ) A i r c a r r i e r l i a b i l i t y i s u n l i m i t e d as the agreements do not a p p l y to domestic c a r r i a g e ; s u b j e c t to defences and l i a b i l i t y a l l o w e d i n Canada i n c l u d i n g res i p s a l o c q u i t u r . Passenger B - (Vancouver - Montreal - Vienna) Passenger i s l i m i t e d t o ' $ 9 , 0 0 0 . 0 0 recovery as A u s t r i a s i g n e d the Warsaw Convention but not the P r o t o c o l . L i a b i l i t y i s presumed but may be r e b u t t e d . Passenger C - (Vancouver - Montreal - London) Passenger l i m i t e d i n recovery to $ 1 8 , 0 0 0 . 0 0 . Both England and Canada r a t i f i e d the Hague P r o t o c o l . L i a b i l i t y i s presumed but may be r e b u t t e d . Passenger D - (Vancouver - Montreal - New York) The Montreal Agreement a p p l i e s g i v i n g him a $58/75,000.00 l i m i t depending on the forum. A b s o l u t e l i a b i l i t y except f o r c o n t r i b u t o r y n e g l i g e n c e and sabotage. These f o u r l i m i t s are not r e l a t e d t o r i s k o r passenger c h a r a c t e r i s t i c s , merely w i t h c o n t a c t s , which d i s p l a y s the f r a g m e n t a t i o n o f a i r law which now e x i s t s . The example o f BEA ( B r i t i s h European Airways) p o i n t s out the e x t e n t o f t h i s . The CAB r e q u i r e d t h a t BEA be a member o f the Montreal Agreement, d e s p i t e the f a c t t h a t the a i r l i n e does not o p e r a t e i n t o the U.S.,- because o f the many U.S. o r i g i n o r d e s t i n a t i o n passengers t h a t i t c a r r i e s . T h i s would mean t h a t on BEA f l i g h t s s e r i o u s d i f f e r e n c e s ; between passengers i n terms o f recovery would e x i s t . In view o f t h i s , BEA v o l u n t a r i l y waived i t s l i m i t to $ 7 5 , 0 0 0 . 0 0 f o r a l l -5 passengers whether o r not they are covered by the Montreal Agreement. T h i s b a l k a n i z a t i o n o f i n t e r n a t i o n a l a i r law d e t r a c t s from the p r o g r e s s i v e nature o f the i n t e r n a t i o n a l a i r t r a n s p o r t i n d u s t r y . The Montreal Agreement f u l f i l l s the requirement o f having the U.S. f u n c t i o n w i t h i n an i n t e r n a t i o n a l l i a b i -l i t y system but i t c l e a r l y does not work towards the long run i n t e r e s t s o f the passengers o r the i n d u s t r y . (A more t e c h n i c a l a n a l y s i s o f the Montreal Agreement i s c o n t a i n e d i n Appendix C) CHAPTER SEVEN ABSOLUTE LIABILITY A b s o l u t e l i a b i l i t y i s an i r r e b u t t a b l e presumption o f r e s p o n s i b i l i t y w i t h -out r e f e r e n c e to f a u l t , i n t e n t o r knowledge. Thus, when the U.S. government announced on March 7 t h , . 1966, the a d d i t i o n o f a b s o l u t e l i a b i l i t y to i t s demands, t h i s represented a d e p a r t u r e , p a r t i c u l a r l y f o r the U . S . , from h i s t o r i c concepts o f both Common and C i v i l Law c o u n t r i e s which r e q u i r e p r o o f o f f a u l t o r wrong-doing as a c o n d i t i o n o f l i a b i l i t y . T h i s move s u r p r i s e d the o t h e r n a t i o n s because o f the p o s i t i o n the U.S. had always taken on n o - f a u l t l i a b i l i t y . In 1952 a t the Rome Conference on I n j u r y to T h i r d P a r t i e s and S u r f a c e Damage, they opposed the Convention and i t s a b s o l u t e l i a b i l i t y p r o v i s i o n s " s i n c e the theory i s u n j u s t to the a i r c a r r i e r i n r e q u i r i n g i t to respond to damages r e g a r d l e s s o f f a u l t . " 1 Again i n 1964 the U.S. r e i t e r a t e d t h i s stand when asked by ICAO to r a t i f y the C o n v e n t i o n . I f f a u l t i s a s s i g n e d a r o l e i n determing l e g a l consequences o f a c c i -d e n t s , what i s the u n d e r l y i n g r a t i o n a l e ? D e t e r r e n c e , r e t r i b u t i o n , m o r a l i t y ? L i a b i l i t y based on i n d i v i d u a l f a u l t i s d e r i v e d from the Lex A q u i l i a o f Roman j u r i s p r u d e n c e , d r a f t e d over 2,000 y e a r s ago. The f a u l t y behaviour o f the author o f damages was the moral and l e g a l j u s t i f i c a t i o n f o r h i s o b l i g a t i o n to compensate and the v i c t i m ' s r i g h t to i n d e m n i t y . I f not caused by the f a u l t o f an a l l e g e d t o r t f e a s o r the l o s s l a i d w i t h the i n j u r e d p a r t y . I t i s b e l i e v e d t h a t a t the r o o t o f a l l l i a b i l i t y l i e s the i d e a o f p r e -v e n t i o n , combined w i t h the p r i n c i p a l which i s not n e c e s s a r i l y l i m i t e d to l i a b i -l i t y f o r n e g l i g e n c e , t h a t i f one o f two o r more p a r t i e s has to bear the conse-quences o f an a c c i d e n t , i t i s reasonable t h a t i t s h o u l d be the person whose n e g l i g e n c e caused the i n j u r y . As long as the aim o f p r e v e n t i o n was g e n e r a l l y emphasized, a n y t h i n g which would reduce t h i s p r e v e n t i v e e f f e c t o f l i a b i l i t y was frowned upon as c o n t r a r y t o p u b l i c i n t e r e s t . Thus, i t was not s u r p r i s i n g to see t h a t when l i a b i l i t y i n s u r a n c e was i n t r o d u c e d i t met w i t h s t r o n g o p p o s i t i o n from a l l those who f e a r e d t h a t the most important i n c e n t i v e would be removed. When the p r a c t i c a l need f o r i n s u r e d l i a b i l i t y appeared to be such t h a t i t s i n t r o d u c t i o n c o u l d no l o n g e r be stopped and i t became a general f e a t u r e o f a modern l i a b i l i t y system, i t seemed a l o g i c a l consequence t h a t the r a t i o n a l e o f p r e v e n t i o n belonged to the dogma of an e a r l i e r e r a . 2 Two trends are r e s p o n s i b l e f o r the acceptance o f n o - f a u l t l i a b i l i t y , not only i n a i r but i n law g e n e r a l l y . ( i ) TECHNOLOGICAL CHANGES have t ransformed l i f e i n modern s o c i e t y . The e n t i r e concept o f f a u l t becomes i n a p p r o p r i a t e as technology i n c r e a s e s -, 3 i n c o m p l e x i t y , making i t d i f f i c u l t t o t e l l who, i f anyone, was at f a u l t . • Increased uses o f machines, automat ic c o n t r o l s and feed-back d e v i c e s c r e a t e s i t u a t i o n s where the a c t which caused the i n j u r y cannot be i d e n -t i f i e d as the c o n s c i o u s act o f an i n d i v i d u a l . In a i r t r a n s p o r t w i t h i t s m u l t i p l e automative g u i d i n g and f a i l - s a f e d e v i c e s , a c c i d e n t s are an accumu-l a t i o n o f v a r i o u s events i n which people p l a y an i n c i d e n t a l r o l e and c a n -not be c o n s i d e r e d a p r i n c i p a l cause. Many a c c i d e n t r e p o r t s r e f e r to " p i l o t - e r r o r " but i n l i g h t o f the mechanics o f f l i g h t o f c u r r e n t a i r c r a f t , i t i s i n e q u i t a b l e to equate e r r o r w i t h f a u l t . In the event of a m a l f u n c -t i o n i n an engine o r q u i d i n g equipment, the speed a t which events o c c u r l e a v e s the p i l o t l i t t l e t ime to t h i n k and produce reasoned d e c i s i o n s . His t r a i n i n g i s aimed at having him r e a c t a u t o m a t i c a l l y to inst rument s i g n a l s ; the p i l o t i s f i l l i n g i n f o r a n o t - y e t - d e v e l o p e d feedback mechanism. In the f i n a l a n a l y s i s , s e l f - p r e s e r v a t i o n p l a y s a g r e a t e r r o l e than concern about l i a b i l i t y which may be a t t r i b u t e d to an employer. TABLE THREE4 Cause A t t r i b u t i o n o f U.S. Domestic J e t Crases (1959 - 1967) P i l o t E r r o r w i t h Weather C o n t r i b u t i n g 36% Weather as Primary Cause 25% V e h i c l e Subsystem F a i l u r e 27% Other 9% Unknown 3% ( i i ) SOCIOLOGICAL APPROACH TO LIABILITY AND COMPENSATION Both the Warsaw and Hague inst ruments were grounded i n the t r a d i t i o n a l system o f l i a b i l i t y but by the time the P r o t o c o l was being implemented changes were o c c u r r i n g i n the t h e o r i e s o f t o r t and i n s u r a n c e . C a l l e d n o - f a u l t , manufacturers o r e n t e r p r i s e l i a b i l i t y , the movement was r e l e v a n t to a v i a t i o n l i t i g a t i o n because as the proponents o f Warsaw were running o u t o f reasons why passengers s h o u l d be denied the b e n e f i t s o f common l a w , t h a t body o f law was becoming u n a t t r a c t i v e i n many r e s p e c t s . The c r i t i c i s m s r e l a t e d to the r o l e o f f a u l t i n d e t e r m i n i n g l i a b i l i t y and the value o f spending l a r g e amounts o f time and money on the d e t e r m i n a t i o n o f t h a t i s s u e . Why are a c c i d e n t s l i t i g a t e d a t a l l ? To p r o v i d e compensation and spread economic l o s s t h a t o t h e r w i s e would be too s h a r p l y c o n c e n t r a t e d . S o c i e t y i s i n c r e a s i n g l y s e n s i t i v e to a d e s i r e to minimize s e r i o u s s o c i a l d i s t u r b -ance which i s c r e a t e d o r extended by an a c c i d e n t . In many t r a n s p o r t a c c i d e n t s , t h e r e i s no moral f a u l t , however, c o s t s remain to be p a i d . The r i s k theory o f law would spread the l o s s e s , t h e r e f o r e , among those who b e n e f i t by the p r o v i s i o n o f the a c t i v i t y which l e a d to the i n j u r y , producing d i s t r i b u t i v e r a t h e r than r e t a l i a t o r y j u s t i c e . Th is i s the r a t i o n a l e behind a b s o l u t e l i a b i l i t y . As a m a t t e r o f s o c i a l economics, the damage caused by such a c t i v i t y s h o u l d be c o n s i d e r e d as general c o s t s o f the a c t i v i t y and they s h o u l d be taken i n t o account as such when e v a l u a t i n g t h e i r r o l e i n s o c i e t y . T h i s spreading o f l o s s e s serves to gauge the economic value o f the a c t i v i t y , and a t the same t i m e , prevents the e n t i r e l o s s from f a l l i n g on one unprepared to meet i t . 5 T h i s theory i s supported by the concept o f r a t i o n a l a l l o c a t i o n o f resources and consumer p r e f e r e n c e . The a c c i d e n t c o s t s must be r e f l e c t e d i n the market p r i c e o f the a c t i v i t y which engenders them i f the consumer i s t o make meaningful market d e c i s i o n s . T h i s c o n v e r s i o n o f c a t a s t r o p h i c l o s s i n t o an o p e r a t i n g c o s t i s done by i n s u r a n c e , which f u l f i l l s the s o c i a l f u n c t i o n o f g u a r a n t e e i n g compensation to the i n j u r e d p a r t y even i n the case of a n o n - c u l p a b l e a c c i d e n t and i n d e p e n d e n t l y o f the n e c e s s i t y o f apply a s a n c t i o n f o r f a u l t y conduct. Th is r o l e o f i n s u r a n c e i n e n t e r p r i s e l i a b i l i t y r e q u i r e s t h a t the one who i s i n the best p o s i t i o n t o u t i l i z e i t , be the l o c u s o f r e s p o n s i b i l i t y . The a i r c a r r i e r i s s i n g l e d o u t , not because i t i s i n a c e n t r a l p o s i t i o n to e s t i m a t e r i s k s and a l l o c a t e both c o s t s and b e n e f i t s . E n t e r p r i s e l i a b i l i t y i s not a t o t a l l y modern concept . Respondeat  s u p e r i o r was based on the b e l i e f t h a t c o s t s s h o u l d be s h i f t e d from employees whose care has been wanting to l a r g e employers f o r which an a c c i d e n t i s a c o s t o f doing b u s i n e s s . ^Several b e n e f i t s , p r i m a r i l y f o r the passenger , r e s u l t from a regime o f a b s o l u t e l i a b i l i t y . ( i ) C e r t a i n t y o f Compensation - Under a f a u l t regime, t h e r e i s no compensation i f there i s no f a u l t . In cases where the t o r t f e a s o r i s a p a r t y o t h e r than the c a r r i e r e . g . a subsystem m a n u f a c t u r e r , i t i s sometimes found t h a t the judgment i s w o r t h l e s s due to l a c k o f i n s u r a n c e o r a s s e t s . A b s o l u t e l i a b i -l i t y i s not c o n t i n g e n t upon f i n d i n g (a) a t o r t f e a s o r which (b) i s capable o f s a t i s f y i n g a judgment. ( i i ) L i t i g a t i o n Costs - "When the lawyers are f i n i s h e d , no r i c e f i e l d remains to d i v i d e amongst the l i t i g a n t s . " ( A n c i e n t Chinese P r o v e r b ) 6 The c o s t o f l i t i g a t i o n measures the i n e f f i c i e n c y of any compensation scheme and the p o t e n t i a l o f a r e d u c t i o n i s o f f e r e d by a b s o l u t e l i a b i l i t y . T r i a l w i l l not be d i r e c t e d towards i s s u e s of f a u l t but o n l y quantum o f damages. Out o f c o u r t s e t t l e m e n t s would be encouraged as w i t h most defences removed the c a r r i e r has l i t t l e reason to go to t r i a l , and s i n c e the "asking value" o f a c l a i m under a b s o l u t e l i a b i l i t y i s c l o s e to the p o t e n t i a l c o u r t award the p l a i n t i f f i s not induced to i n c u r l e g a l fees to i n c r e a s e i t mar-g i n a l l y i n c o u r t . A b s o l u t e l i a b i l i t y , i t was hoped, would reduce the U.S. lawyers "one-t h i r d " r u l e as t h e i r r o l e i s g r e a t l y d i m i n i s h e d . That group n a t u r a l l y opposes t h i s form o f l i a b i l i t y as i t r e p r e s e n t s a t h r e a t to t h e i r l i v e l i -hood. The ground they u t i l i z e to a t t a c k the system i s the necessary r o l e o f f a u l t i n r a i s i n g a i r l i n e s a f e t y . 7 However a b s o l u t e l i a b i l i t y i s the s t r o n g e s t d e t e r r e n t o f a l l - c a r r i e r s must use more than a reasonable s t a n d a r d o f c a r e , they must a v o i d a c c i d e n t s a t a l l c o s t s . The c a r r i e r s were upset w i t h the i n t r o d u c t i o n of a b s o l u t e l i a b i l i t y on more s u b s t a n t i a l grounds than the l a w y e r s . The o b j e c t i o n s i n c l u d e d : (a) The e f f e c t o f the r u l e on i n s u r a n c e c o s t s . (b) N o - f a u l t i n s u r a n c e encourages small and i n f l a t e d c l a i m s which p r e -v i o u s l y would have been d e t e r r e d by the b a r r i e r o f a n e g l i g e n c e s u i t . (c) A b s o l u t e l i a b i l i t y f o r passengers d u r i n g embarkation and disembarka-t i o n i s s e r i o u s i n a p e r i o d o f a i r p o r t v i o l e n c e . (d) The p i l o t s p r o t e s t e d t h a t t h i s type o f l i a b i l i t y encourages f o u l p l a y . An undetected s a b o t e u r would b e n e f i t from a l i a b i l i t y which the c a r -r i e r c o u l d have p r e v i o u s l y escaped by u s i n g A r t i c l e 20 ( 1 ) . The high l e v e l o f compensation ($75,000.00) reduced the n e c e s s i t y o f buying f l i g h t i n s u r a n c e which p r e v i o u s l y was used by i n v e s t i g a t o r s to i d e n t i f y the s a b o t e u r . Whi le t h i s was a r a d i c a l step f o r many n a t i o n s , numerous c o u n t r i e s a l r e a d y had a b s o l u t e c a r r i e r l i a b i l i t y as p a r t o f t h e i r domestic l a w , i n c l u d i n g A u s t r a l i a , p I n d i a , M e x i c o , S p a i n , Venezuela and R u s s i a . " The Warsaw C o n f e r e n c e , i n which the U.S. d i d not o f f i c i a l l y p a r t i c i p a t e , came very c l o s e to i n c o r p o r a t i n g a b s o l u t e l i a b i l i t y i n the 1929 C o n v e n t i o n . I t was o n l y o u t o f deference to the very i n f l u e n t i a l French d e l e g a t i o n t h a t i t was not i n c o r p o r a t e d i n an apparent form. S i n c e the I n d u s t r i a l R e v o l u t i o n and i t s mechanized t r a n s p o r t , E u r o p e a n law-yers saw a need f o r a new b a s i s o f l i a b i l i t y ; a b s o l u t e o r s t r i c t l i a b i l i t y had l o n g been urged but French j u r i s p r u d e n c e was s t r o n g l y r o o t e d i n f a u l t . The Napoleonic Code o f 1804 c o n t a i n e d i n S . 1382, "Every a c t whatever o f man which causes damage to a n o t h e r , o b l i g e s him by whose f a u l t i t happened to r e p a i r i t . " The Chairman o f the Warsaw C o n f e r e n c e , M. R i p e r t o f F r a n c e , wrote a book i n 1927 p r o p o s i n g a method by which a b s o l u t e l i a b i l i t y c o u l d be i n j e c t e d i n t o the r i g i d French system o f f a u l t . He urged a presumption of f a u l t f o r t h i n g s under one's care e . g . an a i r p l a n e , i n e f f e c t a presumption o f l i a b i l i t y . T h i s i s how s t r i c t l i a b i l i t y entered French j u r i s p r u d e n c e and two y e a r s l a t e r the Warsaw C o n v e n t i o n . A b s o l u t e l i a b i l i t y has demonstrated i t s v a l u e i n o t h e r f i e l d s and i n the Montreal Agreement s i n c e 1966 and must be c o n s i d e r e d a prime element i n any l i a b i l i t y p r o p o s a l . CHAPTER EIGHT INSURANCE When d i s c u s s i n g l i m i t a t i o n o f recovery o r l i a b i l i t y b a s i s , c o n s i d e r a t i o n must be had o f the r o l e o f i n s u r a n c e . "When the i n s u r e d i s so s i t u a t e d t h a t the happening o f the event on which the i n s u r a n c e money i s to be p a i d , would as a proximate r e s u l t i n v o l v e the i n s u r e d i n the l o s s o r decrease o f any r i g h t o r i n any l e g a l l i a b i l i t y t h e r e i s an i n s u r a b l e i n t e r e s t i n the happening o f the event ." R i s k s to passengers may be covered from e i t h e r s i d e ; passenger l e g a l l i a b i -l i t y i n s u r a n c e i s a v a i l a b l e to the c a r r i e r ; and personal p o l i c i e s can be o b t a i n e d by the passenger. Ci rcumstances and o p i n i o n f a v o r i t being done from the c a r r i e r s i d e . The Chairman o f the U.S. d e l e g a t i o n s a i d a t the Montreal meeting i n 1966, "In s h o r t , i t seems to us t h a t whether the c a r r i e r s absorb the c o s t o r pass i t on i n d i r e c t l y i n the f a r e o r make a s p e c i a l c h a r g e , they as a group are the b e s t l o c u s o f r e s p o n s i b i l i t y . I t i s the a i r l i n e s t h e r e f o r e who ought to have the pr imary burden r ±. , • • ,,2 o f t a k i n g out i n s u r a n c e f o r a c c i d e n t s . Regardless o f where the c o s t i s i n i t i a l -l y l a i d , i t w i l l be d i s t r i b u t e d on the b a s i s o f the e l a s t i c i t y o f a i r t r a n s p o r t supply and demand. S e v e r a l reasons j u s t i f y the l o c u s o f r e s p o n s i b i l i t y being the c a r r i e r : ( i ) The more a c c u r a t e l y an i n s u r a n c e company can c a l c u l a t e the r i s k s the lower the premium. U n c e r t a i n t y r e p r e s e n t s a d i s u t i l i t y to the i n s u r e r as i t does the i n s u r e d . Because the r i s k o f an i n c i d e n t r e l a t e s not to passenger c h a r a c t e r i s t i c s but to the o p e r a t i o n s o f a s p e c i f i c c a r r i e r , the exposure to l o s s can be more a c c u r a t e l y assessed from the c a r r i e r s i d e . S i n c e p e r -sonal a c c i d e n t p o l i c i e s a r e not a d j u s t e d to r e f l e c t the r i s k i n h e r e n t i n a p a r t i c u l a r mode o r c a r r i e r the premium r a t e i s s e t high t o p r o t e c t the i n s u r e r . ( i i ) The c a r r i e r w i t h i t s massive b a r g a i n i n g power can o b t a i n the lowest pos-s i b l e r a t e from a c o m p e t i t i v e market. ( i i i ) Passengers underest imate t h e i r chance o f a c c i d e n t involvement and the consequent l o s s . Those who have a c c i d e n t p o l i c i e s o r l i f e i n s u r a n c e o f t e n m a i n t a i n them a t inadequate l e v e l s . A d d i t i o n a l l y , as a i r t r a v e l becomes a v a i l a b l e to lower l e v e l s o f the s o c i o - e c o n o m i c s t r u c t u r e , a group o f people become passengers who are n e i t h e r concerned w i t h nor i n a p o s i t i o n to purchase coverage. Any l o s s consequent on t h e i r death o r i n j u r y must be borne by s o c i e t y , which c r e a t e s an e x t e r n a l i z a t i o n o f c o s t s i n the absence o f passenger l i a b i l i t y i n s u r a n c e . ( i v ) The d e t e r r e n t e f f e c t o f f a u l t i s not removed by i n s u r a n c e , i t merely c o n -v e r t s s p e c i f i c deterence i n t o general d e t e r r e n c e . Because the c o s t o f a c c i d e n t s appears as i n s u r a n c e premiums, the c a r r i e r w i l l be under market p r e s s u r e to conduct a s a f e o p e r a t i o n . In a d d i t i o n , under passenger l e g a l l i a b i l i t y i n s u r a n c e , the i n s u r e r has a d i r e c t i n t e r e s t i n the s a f e o p e r a -t i o n o f the a i r l i n e and w i l l use t h e ' t h r e a t o f r a i s e d premiums o r withdrawn 3 coverage to c o r r e c t any hazardous p r a c t i c e . The two types o f i n s u r a n c e i n more d e t a i l a r e : ( i ) PASSENGER LEGAL LIABILITY INSURANCE - The i n s u r e r i n t h i s p o l i c y i n d e m n i f i e s the i n s u r e d a g a i n s t a l l sums he might be l i a b l e to pay, whether a c c o r d i n g to i n t e r n a t i o n a l o r l o c a l l e g i s l a t i o n , s u b j e c t to a maximum l i m i t o f l i a b i l i t y agreed upon from the o u t s e t between the p a r t i e s to the i n s u r a n c e c o n t r a c t . 4 T h i s l i m i t i s f i x e d f o r each a i r c r a f t i n r e s p e c t o f any one passenger and any one a c c i d e n t . Whi le the sum i n s u r e d i s f i x e d to cor respond to the Warsaw Hague and Montreal l i m i t s , the a c t u a l l e v e l o f coverage exceeds these l i m i t s to g i v e s a t i s f a c t o r y p r o t e c t i o n to the c a r r i e r . The premiums r e f l e c t p a s t o p e r a t i n g r e c o r d , revenue passenger m i l e s f lown by the i n s u r e d d u r i n g a s p e c i f i e d p e r i o d , the a p p l i c a b l e l i m i t on l i a b i -l i t y and c o n s i d e r a t i o n o f p a r t i c u l a r o p e r a t i n g c o n d i t i o n s such as c l i m a t e * i n the area s e r v e d , average stage l e n g t h and t e c h n i c a l s tandards o f the equipment and f a c i l i t i e s used by the c a r r i e r . ( i i ) PERSONAL INSURANCE - T h i s d i f f e r s from o t h e r types o f i n s u r a n c e i n t h a t i t i s not an i n d e m n i t y . The i n s u r e d i s not p l a c e d i n the same f i n a n c i a l p o s i t i o n a f t e r a l o s s as t h a t which he occupied b e f o r e the occurence o f the i n s u r e d event. The amount o f i n s u r a n c e i s l i m i t e d n o r m a l l y by h i s a b i l i t y to pay premiums. L i f e i n s u r a n c e i s the most common form o f personal i n s u r a n c e and o f t e n c o n t a i n s m u l t i p l e indemnity c l a u s e s f o r a c c i d e n t a l d e a t h . Personal t r a v e l i n s u r a n c e i s the o t h e r common form. I t became p o p u l a r i n the 1920s when i t appeared t h a t t h e r e was to be no demand f o r a i r c a r -r i e r s to i n s u r e t h e i r l e g a l l i a b i l i t y to passengers . I t i s e f f e c t e d from many s o u r c e s : (a) Many t r a v e l agents s e l l p o l i c i e s which cover the i n s u r e d f o r a s p e c i f i e d p e r i o d o f t ime from a c c i d e n t s s u f f e r e d on a t r i p . (b) Coupon i n s u r a n c e dispensed by a i r p o r t s l o t machines dates from the end o f the n i n e t e e n t h century when i t covered r a i l w a y a c c i d e n t s . I t d i f f e r s from the usual method o f o b t a i n i n g i n s u r a n c e i n t h a t i t g i v e s an automat ic cover w i t h o u t having to f i l l i n a proposal f o r s u b m i s s i o n to the i n s u r e r f o r c o n s i d e r a t i o n . The i n s u r e r makes an o f f e r and anyone who a c c e p t s i t i s covered i m m e d i a t e l y . The c o n d i t i o n s are s e t out on the coupon, the main one being a time l i m i t on coverage, u s u a l l y 24 hours. *Figures i n d i c a t e 50% o f a c c i d e n t s o c c u r on l a n d i n g and 25% on t a k e - o f f . T h i s makes an a i r l i n e w i t h s h o r t stage l e n g t h a g r e a t e r r i s k . 5 A s l o t machine i s a very expensive source o f coverage when r e l a t -ed to the r i s k i n v o l v e d . A t y p i c a l $ 3 7 , 5 0 0 . 0 0 p o l i c y c o s t s $ 1 . 2 5 -on a 1,000 m i l e t r i p the i n s u r e r i s exposed to c e r t a i n t y - c o s t s o f 10$ based on a c c i d e n t s t a t i s t i c s . 6 The number o f passengers u s i n g t h i s s e r v i c e i s r e l a t i v e l y m i n o r . 7 (c) Some c a r r i e r s have i n t r o d u c e d " f r e e " personal a c c i d e n t coverage as an e x t e n s i o n of t h e i r passenger l e g a l l i a b i l i t y . In Canada many p r i v a t e c a r r i e r s who are f a c e d w i t h the l i a b i l i t y a r i s i n g from t r a n s p o r t o f top management personnel and i n t e r e s t e d i n coverage w i t h o r w i t h o u t 8 1 i ab i 1 i t y adop t t h i s a pp roa ch to compensa 11 on * (d) Under the domestic laws o f some c o u n t r i e s the a i r c a r r i e r must g i v e an automat ic c o v e r to t h e i r passencjers up to a 1 i rn i t s p e c i f l e d by s t a t u t e . T h i s i s not l i a b i l i t y i n s u r a n c e as i t does not r e l a t e to fau 11J r a t h e r i t i s persons! a c c i d e n t insuranee f i n a n c e d throuc|h 91r l i n e t i c k e t s a l e s . I t was t h i s type o f i n s u r a n c e t h a t was u n s u c c e s s -f u l b e f o r e the Senate i n 1965. Two v a r i a t i o n s o f t h i s p o l i c y are found when i t i s combined w i t h the c a r r i e r s 11 a bi 1 i ty po1i cy• The f i r s t a l l o w s a 11mi ted reco very based on proved da macjes recjardless o f f 9 u l t up to a l i m i t w h i l e a bo ve the l i m i t the p l a i n t i f f i s f r e e to r e s o r t to an 0 r d i n a r y 1 i a b i 1 i t y a c t i o n based on f a u l t . The second approach r e q u i r e s the p l a i n t i f f to e l e c t between a 11 a b 111ty a c t i o n o r acceptincj the a utorna 11c r e c o v -ery and w a l v l n Q a l l c l a i m s a cj a i n s t the c a r r i e r * Under an a b s o l u t e 1 i a b i 1 i t y recji me the p r a c t i c a l di f f e r e nee s between l i a b i l i t y i n s u r a n c e and personal i n s u r a n c e d i s a p p e a r as f a u l t i s no loncjer an i s s u e * The i n s u r a n c e i n d u s t r y has developed g r e a t l y s i n c e 1910 when the f i r s t a v i a t i o n p o l i c y was w r i t t e n . The f o l l o w i n g coverage was o f f e r e d - " a c c i d e n t a l damage s u s t a i n e d w h i l s t a t t e m p t i n g to r i s e , i n the course o f f l i g h t , and when 1 • • II 9 9 9 The 19rc|e number of revenue pflssencjer mi 1 es over which to spredd 9 prove operfitincj recordsdnd improved dctudriQ! techniques hflve produced g r e a t l y reduced premiums. rket specialization*, p s r t i c u l s r ly in London*, 1 Imits 9 re divided p es The f i r s t is c\ pnmsry po 11cy 9 n d 9 s such 13 k e s c 9 r e of the i r s t loss re 191incj to e9ch person or accident* An excess pollcy p9y s 9ny 9mount over the primsry cover up to 9 m<iximum contained therein plus lecj9l costs* Most e a r n e r s s e l f - i n s u r e to moderate amounts by e s t a b l i s h i n g a res erve fund to be used to meet l i a b i l i t i e s a r i s i n g from an a c c i d e n t . The c a r r i e r s i n the l a t e 1960s became d i s s a t i s f i e d w i t h r a t e s which they f e l t were to h igh and were concerned w i t h the p o s s i b l e s a t u r a t i o n o f the i n s u r -ance market as a r e s u l t o f h i g h e r l i m i t s and w i d e - b o d i e d j e t s , so IATA and ATA of A j o i n t l y orcj9nized 9 n insurd nee poo 1 to counter these effects• A non—prof11 carrier cont ro 11 ed i nsur9nce comp 9 ny wo u 1 d u n de rw r i te up to 40^ of both p n met ry 9nd excess pol I ci es purchased by member 91 r l i nes • The scheme never becctme oper9~ tionsl 3s the carriers could not finsnce the necesssry reserves 9nd the insurance industry reacted fdvorsbly to the thredt* The c o s t o f passenger l i a b i l i t y i n s u r a n c e i s c o n s i d e r a b l e and when viewed i n the c o n t e x t o f the h i g h l y - l e v e r e d p o s i t i o n o f the a i r l i n e s any r i s e i n c o s t s i s very s i g n i f i c a n t . The f o l l o w i n g f i g u r e s i n d i c a t e both ( i ) the expense o f i n s u r a n c e and ( i i ) the sharp r i s e i n c o s t s f o r f o r e i g n c a r r i e r s a f t e r the 1966 Montreal Agreement. The f i g u r e s i n these t a b l e s i n c l u d e c o s t o f i n j u r i e s and i n s u r a n c e o v e r -head; the l a t t e r covers b r o k e r a g e , a d m i n i s t r a t i o n , r e i n s u r a n c e , p r o v i s i o n f o r r e s e r v e s , and i n some c a s e s , l e g a l defence. TABLE FOUR L i a b i l i t y Insurance i n R e l a t i o n to Passenger F a t a l i t i e s f o r U.S. Scheduled A i r l i n e s 11 L i a b i l i t y Premiums Number o f F a t a l i t i e s Premiums Received per F a t a l i t y 1960 $20 m i l l i o n 336 -$ 6 0 , 0 0 0 . 0 0 1965 $30 m i l l i o n 226 1967 $38 m i l l i o n 228 $ 1 3 0 , 0 0 0 . 0 0 $ 1 7 0 , 0 0 0 . 0 0 TABLE FIVE L i a b i l i t y Insurance i n R e l a t i o n to Passenger F a t a l i t i e s f o r Scheduled A i r l i n e s O u t s i d e o f the U . S . 1 2 1960 1965 1967 Est imated Insurance Premiums $11 m i l l i o n $21 m i l l i o n $43 m i l l i o n Number o f F a t a l i t i e s 537 462 448 Premiums Received per F a t a l i t y $ 2 0 , 0 0 0 . 0 0 $ 4 5 , 0 0 0 . 0 0 $ 1 0 0 , 0 0 0 . 0 0 The l e v e l o f i n s u r a n c e c o s t s b e f o r e and a f t e r the Montreal . Agreement g i v e s an i n d i c a t i o n o f the e f f e c t o f a changed b a s i s o f l i a b i l i t y and recovery l i m i t s . In examining the data s e v e r a l p o i n t s s h o u l d be n o t e d : ( i ) Non-U.S. c a r r i e r s a f f e c t e d by the Agreement absorbed i n c r e a s e d c o s t s . The average, based on RPMs f lown shows a h i k e from 1965 to 1967 o f 39$ to 61$/1,000 RPM, r e p r e s e n t i n g a r i s e from .6 to .9% o f o p e r a t i n g c o s t s and .75 to 1.10% o f passenger revenues. ( i i ) The U.S. c a r r i e r s have shown a f a l l i n g t r e n d s i n c e 1961 and t h e r e appears to be no d i f f e r e n c e between domestic and i n t e r n a t i o n a l r a t e s . ( i i i ) The e r r a t i c development o f r a t e s o f i n d i v i d u a l c a r r i e r s . Even among the 14 major U.S. c a r r i e r s which o p e r a t e under s i m i l a r c o n d i t i o n s , a wide v a r i a -• + • + 15 t i o n i n c o s t s e x i s t s . ( i v ) C o u n t r i e s such as China and P a k i s t a n w i t h no a f f e c t e d t r a f f i c r e c e i v e d high i n c r e a s e s w h i l e the U n i t e d Kingdom c a r r i e r s a l t h o u g h s u b s t a n t i a l l y a f f e c t e d by the Agreement remained s t e a d y . A general o b s e r v a t i o n on the development o f l i a b i l i t y i n s u r a n c e c o s t s i s t h a t the g r e a t d i f f e r e n c e s between i n d i v i d u a l a i r l i n e s and the e r r a t i c p a t t e r n over t ime f o r each c a r r i e r p r e c l u d e s any p r e c i s e c o n c l u s i o n on the e f f e c t s o f the Montreal Agreement on c o s t s . I t appears c e r t a i n t h a t w h i l e the o v e r a l l impact o f l i a b i l i t y i n s u r a n c e on a i r t r a n s p o r t economics remained r e l a t i v e l y c o n s t a n t from 1960 to 1965, most non-U.S. c a r r i e r s a f f e c t e d by the Agreement had to a c c e p t s u b s t a n t i a l l y h i g h e r premiums when the Agreement became e f f e c t i v e . There i s no c 1 ea x* ev i dence t h a t the Agreement a f f e c t e d c a r r i e r s who were not s u b j e c t to the 16 new regime. The d i f f e r i n g c h a r a c t e r i s t i c s o f each c a r r i e r make i t d i f f i c u l t to e x t r a c t the p r e c i s e i n f l u e n c e o f a h i g h e r l i a b i l i t y l i m i t . 1 7 • F u r t h e r a n a l y s i s o f the l o n g - r u n e f f e c t o f the Montreal Agreement on i n s u r -ance c o s t s i s i m p o s s i b l e due to the . f a c t t h a t the c o u n t r i e s r e f u s e to d i v u l g e TABLE SIX Passenger L i a b i l i t y Insurance Costs f o r A i r l i n e s i n D i f f e r e n t C o u n t r i e s (Domestic and I n t e r n a t i o n a l F l i g h t s Combined) 13, 14 S t a t e % o f T r a f f i c A f f e c t e d by Montreal Agreement Cost/1,000 RPM % o f O p e r a t i n g Cost 1960 1065 1967 1960 1965 1967 A r g e n t i n a 30 12$ 14$ 73$ .2 .2 1.1 Canada 17 40 35 58 . 5 . 6 1.0 Japan 43 23 26 52 . 3 . 4 .9 S w i t z e r l a n d 38 46 43 74 . 5 , 6 1.0 I r e l a n d 63 19 21 67 . 3 . 3 1.1 I n d i a 34 13 15 67 .2 . 3 1.0 P a k i s t a n 1 37 45 90 . 5 . 5 1.2 U n i t e d S t a t e s 25 53 43 37 . 8 . 8 . 7 U n i t e d Kingdom (BEA) 100 29 29 29 . 3 . 3 . 3 Ceylon 0 59 131 80 .9 2 . 0 1.3 U n i t e d Arab R e p u b l i c 0 53 55 34 .5 . 6 . 5 en en data on i n s u r a n c e c o s t s . Between 1966 and 1970, ICAO t r i e d on f i v e s e p a r a t e o c c a s i o n s to o b t a i n f i g u r e s from the member s t a t e s and r e c e i v e d very l i t t l e c o o p e r a t i o n . Al though the reason f o r s e c r e c y i s u n c l e a r , the r e s u l t i s t h a t ICAO "could not express s a t i s f a c t i o n w i t h the data as a f f o r d i n g a c e r t a i n b a s i s f o r e s t a b l i s h i n g new l e v e l s o f l i a b i l i t y . " 1 * 5 To e s t i m a t e the p r e s e n t e f f e c t o f the Agreement i n t e r p o l a t i o n must be c a r r i e d out w i t h the m u l t i p l e i n f l u e n c e s upon c o s t s , such as average recovery and s a f e t y l e v e l s . Insurance i s a c e n t r a l p o i n t i n any l i a b i l i t y p r o p o s a l , w i t h i t s a b i l i t y to c o n v e r t p o t e n t i a l l o s s i n t o a c e r t a i n o p e r a t i n g c o s t . Insurance data p r o -v i d e s a measurement o r "currency" when n a t i o n s d i s c u s s p r o p o s a l s . I f , f o r example, an i n c r e a s e i n l i m i t s from $ 7 5 , 0 0 0 . 0 0 to $100,000.00 i s being s t u d i e d , the n e g o t i a t o r s can b e t t e r r e l a t e to the s u g g e s t i o n i f they are aware the i n s u r -ance c o s t s o f t h e i r c o u n t r y ' s a i r l i n e would r i s e from . 8 to 1.2% o f o p e r a t i n g c o s t s . I t enables t a n g i b l e a n a l y s i s to take p l a c e i n an area o f many i n t a n g i b l e s . DUAL LIMITS In h i s 1952 book on l i a b i l i t y l i m i t a t i o n s , D r i o n termed w o r l d - w i d e u n i -f i c a t i o n o f a damage l i m i t "the b o r d e r l a n d o f f e a s i b l e i n t e r n a t i o n a l law." At the ICAO meeting i n Montreal t h e r e was some d i s c u s s i o n o f dual l i m i t s , the " s o l u t i o n o f d e s p e r a t i o n " , and i n the p e r i o d f o l l o w i n g t h i s meeting the p o s s i b i -l i t y was s t u d i e d by the Legal Subcommittee o f ICAO a s s i g n e d the t a s k o f Warsaw r e v i s i o n . The Subcommittee noted t h a t the economic d i s p a r i t y between d i f f e r e n t c o u n t r i e s , p a r t i c u l a r l y i n the s t a n d a r d and c o s t o f l i v i n g would be r e f l e c t e d i n the s i z e o f c l a i m s brought by persons l i v i n g i n these c o u n t r i e s , thus im-peding any consensus on a s i n g l e l i m i t f i g u r e . In a case such as t h i s dual l i m i t s s h o u l d be c o n s i d e r e d . Three types o f l i m i t d u a l i t y are p o s s i b l e : ( i ) PASSENGER OPTION - Prima f a c i e t h i s appears to be the i d e a l s o l u t i o n . I t i n v o l v e s the passenger s e l e c t i n g a h i g h e r l i m i t o f l i a b i l i t y i f he d e s i r e s i t and having the a p p r o p r i a t e surcharge added to the t i c k e t c o s t , g i v i n g p r o t e c t i o n s u p e r i o r to coupon i n s u r a n c e a t lower r a t e s . I t has the d i s -t i n c t advantage o f g i v i n g an e q u i t a b l e d i s t r i b u t i o n o f c o s t s and b e n e f i t s . T h e . B r i t i s h proposed t h i s scheme a t the Montreal meeting and i t i s i n s t r u c t i v e to observe the t reatment t h i s p a t e n t l y s a t i s f a c t o r y p l a n r e -c e i v e d . The U.S. opposed any p l a n such as t h i s which i n v o l v e d "opt ing i n " , s t a t -i n g t h a t i n view o f inadequate knowledge on the p a r t o f the p a s s e n g e r , t h e r e s h o u l d be a c o n s c i o u s c h o i c e o f the lower l i m i t r a t h e r than a low l i m i t by d e f a u l t . I t would o n l y back an "opt ing out" p r o p o s a l . Canada would support an " o p t i n g - i n " p l a n . A B r i t i s h d e l e g a t e e n t e r e d a r e s e r v a t i o n when he q u e r i e d what v a l u e most people p r o s p e c t i v e l y p l a c e d on t h e i r l i v e s . He was c e r t a i n t h a t h i s maid on her annual v i s i t to the c o n t i n e n t would choose a lower l i m i t - f l y i n g "coach" so to speak, to save a h a l f a pound. The c a r r i e r s opposed i t because o f the d i f f i c u l t y i n keeping r e c o r d s , c o n g e s t i o n a t t i c k e t counters and t h e i r d e s i r e not to d i s c u s s death and i n j u r y w i t h a passenger j u s t p r i o r to b o a r d i n g . Lawyers a t the meeting p o i n t e d out t h a t s i n c e t h i s would be a l i a b i l i t y d i f f e r e n t from e i t h e r c a r r i e r l i a b i l i t y o r coupon i n s u r a n c e , i t would be d i f f i c u l t to c l a r i f y i t f o r the t i c k e t agents and i m p o s s i b l e f o r the p a s -s e n g e r s . In the end the B r i t i s h proposal was abandoned by p r a c t i c a l l y everyone though w i t h t r i b u t e to i t s o r i g i n a t o r f o r the most i m a g i n a t i v e attempt to b r i d g e the g a p . 1 The p l a n was d i s i n t e r r e d i n 1969 by the Subcommittee and a g a i n p r e s e n t e d to the p a r t i e s , c o m p r i s i n g S o l u t i o n Three o f the p o s t - M o n t r e a l d i s c u s s i o n s . Canada r e j e c t e d i t c o m p l e t e l y , the U n i t e d Kingdom f e l t t h a t w i t h a i r l i n e a d m i n i s t r a t i o n c o s t s the surcharge would exceed the c o s t o f an e q u i v a l e n t . . . . 2 . . n amount o f personal a c c i d e n t i n s u r a n c e , IATA termed i t i m p r a c t i c a l f o r the c a r r i e r s , I n d i a s a i d i t would be d i f f i c u l t to implement, and the IVAI 3 opposed i t . The scheme was r e j e c t e d by 68% o f the p a r t i e s i n v o l v e d . ( i i ) GOVERNMENT OPTION - Here the government o f each country would choose a l i m i t and the lower o f the l i m i t s a t o r i g i n o r d e s t i n a t i o n would govern. The problem w i t h t h i s p l a n i s t h a t recovery depends e n t i r e l y on o r i g i n o r d e s t i n a t i o n . The U.S. f l a t l y r e j e c t e d t h i s scheme, r e a l i z i n g how i t would work a g a i n s t U.S. c i t i z e n s t r a v e l l i n g o u t s i d e o f the U.S. "We f a i l to p e r c e i v e any sound reason why any passenger s h o u l d be s u b j e c t to a lower l e v e l o f recovery merely because o f the f o r t u i t o u s c i r c u m s t a n c e t h a t h i s j o u r n e y o r i g i n a t e d o r t e r m i n a t e d i n c o u n t r i e s which e l e c t e d a. lower l i m i t . " 4 The same o b j e c t i o n s were r a i s e d to basing the l i m i t not on o r i g i n / d e s t i n a t i o n but o n : (a) F l a g o f the c a r r i e r - s e r i o u s c o m p e t i t i o n between c a r r i e r s (b) Lex locus d e l e c t i - f o r t u i t o u s (c) Lex l o c u s c o n t r a c t u s - f o r t u i t o u s (d) Lex f o r i - forum shopping a problem (e) N a t i o n a l i t y o f passenger - passenger i s " r i c h " o r "poor" by c i t i z e n s h i p The reasons put forward to support d u a l i t y a r e : (a) A s i n g l e high l i m i t i n v o l v e s i n s u r a n c e c o s t s which cannot be borne to an equal e x t e n t by a l l the c a r r i e r s o p e r a t i n g i n d i f f e r e n t c o u n t r i e s . (b) The high l e v e l s a r e r e q u i r e d o n l y i n the developed c o u n t r i e s . (c) C r o s s - s u b s i d i z a t i o n would be reduced. The reasons which went a g a i n s t dual l i m i t s a r e : (a) The f o r t u i t o u s a c t i o n o f the l i m i t s . (b) A d i s r e g a r d o f passenger i n t e r e s t s i n t h a t IDC f l a g - c a r r i e r s do c a r r y passengers who r e q u i r e a high l i m i t . (c) A l e g a l system i s i n v o l v e d which i s d i f f i c u l t to apply to s u c c e s s i v e c a r r i e r s o r c i r c u l a r t r i p s . The problem l i e s i n d e t e r m i n i n g the l i a i s o n f o r the purposes o f a p p l y i n g a h i g h e r o r lower l i m i t to the passenger. (d) Destroys u n i f o r m i t y . The norm which determines the l i m i t o f l i a b i l i t y would no l o n g e r have any v a l u e as a r u l e o f uni form i n t e r n a t i o n a l l a w , now reduced to a r u l e which r e q u i r e s r e f e r e n c e to l e g a l systems o f v a r i o u s c o u n t r i e s to seek out the a p p l i c a b l e l i m i t . In the end the government o p t i o n proposal which formed an aspect o f S o l u t i o n One and Two o f p o s t - M o n t r e a l d i s c u s s i o n s was r e j e c t e d by IATA and an overwhelming number o f c o u n t r i e s a t a l l l e v e l s o f 5 economic development. ( i i i ) DUALITY IN THE SAME STATE - T h i s t h i r d scheme p r e s e n t l y e x i s t s i n the domestic l i a b i l i t y framework o f some c o u n t r i e s . A f t e r an i n c i d e n t the p l a i n t i f f can e l e c t between: (a) L i m i t e d but automatic payment o f compensat ion; o r (b) A n e g l i g e n c e a c t i o n f o r u n l i m i t e d damages. Whi le t h i s i s an e x c e l l e n t system f o r any one country to choose, the n a t i o n s as a group do not c o n s i d e r t h a t u n i f i c a t i o n l i e s i n t h i s d i r e c t i o n . Dual l i m i t s are r e c o g n i z e d by a l l p a r t i e s as a s o l u t i o n o f d e s p i r a t i o n and i t does not appear t h a t they w i l l ever r e c e i v e s e r i o u s c o n s i d e r a t i o n . THE 1966 I CAP MONTREAL MEETING When the ICAO member s t a t e s met i n Montreal i n February 1966, i t was under the massive i n f l u e n c e o f the n o t i c e o f d u n u n c i a t i o n f i l e d by the U.S. on November 15th and to become e f f e c t i v e three months l a t e r . V a r i o u s attempts to r e s o l v e the c r i s i s had f a i l e d and i t was w i t h a sense of urgency t h a t the d e l e g a t e s g a t h e r e d . T h i s m e e t i n g , at tended by s t a t e s now f u l l y aware o f the U.S. p o s i t i o n and a b i l i t y to o p e r a t e to the d e t r i m e n t o f o t h e r n a t i o n s , o u t s i d e the C o n v e n t i o n , marked the b e g i n n i n g o f the c u r r e n t stage o f passenger l i a b i l i t y n e g o t i a t i o n s . The d i s c u s s i o n s r e l a t e d e s s e n t i a l l y to the l i m i t of p o s s i b l e recovery . A b s o l u t e l i a b i l i t y was not an i s s u e as the U.S. d i d not announce i t u n t i l a f t e r t h i s meeting a d j o u r n e d . Of the 15 p r o p o s a l s put b e f o r e the meeting i n an e f f o r t to reach a consensus a c c e p t a b l e to the U . S . , o n l y two c o n t a i n e d an a b s o l u t e l i a b i l i t y p r o v i s i o n and they were both e l i m i n a t e d i n the e a r l y stages o f the meet ing. T h e . P r e s i d e n t o f ICAO i n opening the meeting s e t the tone o f the p r o c e e d -ings t h a t f o l l o w e d . "The Warsaw Convention i s the most w i d e l y accepted i n t e r -n a t i o n a l i n s t r u m e n t i n the f i e l d o f p r i v a t e a i r law. The Warsaw Convention o f 1929 has proved i t s e l f as an e x c e l l e n t compromise between d i f f e r e n t l e g a l systems and has been a success f o r 30 y e a r s . The Hague P r o t o c o l has known s i m i l a r s u c -c e s s . T h e r e f o r e , i t i s l o g i c a l t h a t when t h e r e i s a r i s k o f l o s i n g most o r a l l o f the advantages of u n i f o r m i t y s a n c t i o n e d by the C o n v e n t i o n , s t a t e s want to f i n d a s o l u t i o n t h a t w i l l m a i n t a i n those a d v a n t a g e s . 1 , 1 The U.S. Chairman r e p l i e d , "For the U.S. to q u e s t i o n comes down e s s e n t i a l l y to a balance o f i n t e r e s t s . Among those i n t e r e s t s a heavy one i s the c o o p e r a t i o n and u n d e r s t a n d i n g around the w o r l d i n the i n t e r n a t i o n a l a v i a t i o n and law f i e l d s . " 2 The three i d e n t i f i a b l y a c t i v e groups at the meeting were: ( i ) The U . S . , whose d e l e g a t i o n was l o o k i n g f o r a consensus but was not prepared to reduce t h e i r demands. For the U.S. the pr imary o b j e c t i v e was to assure adequate p r o t e c t i o n f o r a l l American a c c i d e n t v i c t i m s -i f p o s s i b l e w i t h i n the context o f an i n t e r n a t i o n a l agreement. ( i i ) B e l g i u m , West Germany, Sweden, J a m a i c a , New Zealand and Great B r i t a i n who worked hard f o r a compromise. ( i i i ) The A f r i c a n c o u n t r i e s , L a t i n A m e r i c a , F r a n c e , Poland and C z e c h o s l o v a k i a who would not consent to any l i m i t over $ 5 0 , 0 0 0 . 0 0 r e g a r d l e s s o f the p r o p o s a l . These c o u n t r i e s f e l t t h a t the U.S. would concede r a t h e r than . 3 the a r r a y o f o t h e r f o r e i g n s t a t e s . In l i g h t o f the f a c t t h a t d i s c u s s i o n s c e n t e r e d around the l i m i t l e v e l , the j u s t i f i c a t i o n f o r the concept o f l i m i t e d l i a b i l i t y s h o u l d be examined. Between 1929 and the p r e s e n t , many o f the p r e v i o u s l y e x i s t i n g reasons have been reduced o r e l i m i n a t e d by changes i n the law. The f o l l o w i n g p o i n t s are used by proponents: ( i ) The example of l i m i t a t i o n s i n o t h e r modes f i g u r e d p r o m i n e n t l y at Warsaw and remains today. The Convention was seen t o be analogous to the g l o b a l l i m i t a t i o n on shipowner l i a b i l i t y . S h i p s and a i r c r a f t are p e c u l i a r l y s u s c e p t i b l e to t o t a l l o s s i n v o l v i n g e x t e n s i v e l i f e and p r o p e r t y c l a i m s under c i rcumstances where the owners have o n l y remote c o n t r o l . S h i p p i n g l i m i t a t i o n s l i k e a i r c a r r i e r l i m i t a t i o n s were i n t r o d u c e d t o p r o t e c t an i n d u s t r y which s t a t e s had a c l o s e i n t e r e s t i n . Th is i s a v a l i d argument but i t must be r e c o g n i z e d as a s u b s i d y p a i d by passengers and t h e i r f a m i -l i e s . . ( i i ) The severe r e g u l a t i o n o f the a i r c a r r i e r by governments i n r e f e r e n c e to r o u t e s , e a r n i n g s , and f a r e s make i t d e s e r v i n g o f s p e c i a l c o n s i d e r a t i o n i n terms o f l i a b i l i t y . I f t h i s i s the c a s e , governmental c o n t r o l i s f o r c i n g the c o s t s o f the i n d u s t r y on i n c i d e n t a l v i c t i m s r a t h e r than s p r e a d i n g the l o s s over a l l the b e n e f i c i a r i e s . ( i i i ) The f a c t t h a t passengers have an o p p o r t u n i t y to s e l f - i n s u r e a g a i n s t r i s k o f death o r i n j u r y . Th is i g n o r e s the r e a l i t i e s o f the a i r t r a n s p o r t market and passenger. ( i v ) L i m i t e d l i a b i l i t y i s conducive t o q u i c k s e t t l e m e n t s r a t h e r than long l e g a l b a t t l e s . I f t h i s i s t r u e , why not e l i m i n a t e s e t t l e m e n t s t o ensure immedi-ate c o n c l u s i o n ? (v) U n i f i c a t i o n o f law w i t h r e s p e c t to amount t o be p a i d . Monetary v a l u a t i o n i s r e l a t i v e to the s o c i o - e c o n o m i c environment o f the p l a i n t i f f ' s d o m i c i l e . Measurement o f l o s s i s l o c a l i n nature and to apply a u n i f o r m f i g u r e i s t o run the c e r t a i n r i s k o f w i n d f a l l s and i n s u f f i c i e n t r e c o v e r y . ( v i ) Quid pro guo f o r a b s o l u t e o r aggravated l i a b i l i t y . 4 T h i s was a v a l i d p o i n t i n 1929 but as r u l e s o f ev idence changed under domestic j u r i s d i c t i o n , i t l o s t a g r e a t deal o f i t s v a l i d i t y . The degree o f b e n e f i t r e c e i v e d by the passenger which would c a l l f o r a t r a d e - o f f on l i m i t s i s measured by the d i f f e r e n c e between the l i a b i l i t y burden under any i n t e r n a t i o n a l agree-ment and t h a t a p p l i c a b l e to domestic a i r c a s e s . ( v i i ) A high-income i n d i v i d u a l s h o u l d not be a b l e to impose on the r e s t o f s o c i e t y the e x t r a burden o f r i s k i n v o l v e d i n h i s e n t e r i n g i n t o a s i t u a t i o n where t h e r e i s an i n c r e a s e d chance o f h i s death o r i n j u r y . Those who argue f o r a l i m i t say t h a t a high award i s a s u b s i d y p a i d by the o t h e r passengers f o r t h a t person's (a) w i n d f a l l o r (b) n e g l i g e n c e i n not p r o v i d -i n g personal i n s u r a n c e f o r h i s high economic v a l u e . T h i s p e r c e i v e d i n e q u i t y i s compounded by the f a c t t h a t c r o s s - s u b s i d i z a t i o n o c c u r s not o n l y between passengers but between n a t i o n a l s o f d i f f e r e n t c o u n t r i e s . L i m i t proponents say i t i s a c h o i c e o f d i s c r i m i n a t i n g a g a i n s t a few "wealthy" passengers o r many "average" passengers. Any a t t a c k on t h i s p o i n t must be based on the r e c o g n i t i o n o f those high awards as compensation f o r a r e a l l o s s o f t h a t magnitude. To argue the e q u i t y o f the s i t u a t i o n i s p o i n t l e s s , the i s s u e w i l l be r e s o l v e d on the b a s i s o f each c o u n t r y ' s b a r -g a i n i n g s t r e n g t h . ( v i i i ) D e s p i t e the f a c t t h a t s i n c e 1929 the s a f e t y l e v e l o f the i n d u s t r y has r i s e n r a p i d l y , a c c i d e n t s s t i l l o c c u r w i t h some f requency. Consequent ly , i n s u r -ance c o s t s remain a s i g n i f i c a n t i tem i n c o s t s o f o p e r a t i o n . The economics o f many LDC f l a g - c a r r i e r s are not u n l i k e those o f the a i r l i n e s sought to be p r o t e c t e d i n 1929; w i t h premiums r e p r e s e n t i n g up to 4% o f o p e r a t i n g c o s t s these c a r r i e r s f e e l they cannot handle an a d d i t i o n a l l i a b i l i t y burden. ( i x ) S i n c e a i r t r a n s p o r t b e n e f i t s s o c i e t y as a whole by f a c i l i t a t i n g the i n t e r -change o f people and goods, the c a r r i e r s f e e l t h a t the r i s k o f a v i a t i o n s h o u l d not l a y w h o l l y on the i n d u s t r y . They p o i n t as an example to p r i v a t e n u c l e a r energy o p e r a t o r s i n the U.S. who have a l i a b i l i t y l i m i t o f $60 m i l l i o n , w i t h Congress p r o v i d i n g payment f o r any excess l i a b i l i t y . On the grounds t h a t these e n t e r p r i s e s b e n e f i t s o c i e t y as a whole and t h e r e f o r e , , , , . , 5 s o c i e t y s h o u l d bear some o f the p o t e n t i a l c o s t s . (x) The i n s u r a n c e market i s f e l t by some to be i n c a p a b l e o f h a n d l i n g the c o v e r -age r e q u i r e d by the w i d e - b o d i e d j e t s w i t h passenger l o a d s o f 400 - 500. The example o f a f u l l y - l o a d e d B-747 c r a s h i n g i s r e p e a t e d l y brought up as p r o o f t h a t an i n c i d e n t l i k e t h i s has the same r e l a t i v e e f f e c t as the l o s s o f a small p lane i n 1929. The f a l l a c y i n t h i s argument i s apparent when i t i s r e a l i z e d t h a t (a) w i d e - b o d i e d j e t s have o b t a i n e d coverage f o r o p e r a -t i o n on domestic routes i n Canada and the U.S. w i t h consequent u n l i m i t e d l i a b i l i t y and (b) i n the example o f the B - 7 4 7 , assuming a value on t h i s a i r c r a f t o f $30 m i l l i o n , recovery f o r each o f the 400 passengers would have to be $ 7 5 , 0 0 0 . 0 0 before passenger l o s s exceeded h u l l l o s s . In r e a l i t y , an a c c i d e n t o f t h i s nature would move w o r l d - w i d e r a t e s up m a r g i n a l l y , shown r e c e n t l y i n the case o f the T u r k i s h DC-10 l o s s o u t s i d e o f P a r i s . Any d i s c u s s i o n o f l i m i t a t i o n , which 1952 was termed by D r i o n , the govern-i n g p r i n c i p l e o f a i r t r a n s p o r t a t i o n , i s p l a c e d i n p e r s p e c t i v e by IATA's statement a t the ICAO meeting - "We r e c o g n i z e t h a t our i n d u s t r y has reached the age o f m a j o r i t y and i t may have l o s t the p r i v i l e g e s o f i t s y o u t h . " 6 The meeting i n Montreal d i d not focus on" t h e ' j u s t i f i c a t i o n , f o r l i m i t e d o r u n l i m i t e d l i a b i l i t y , however, i t was e s s e n t i a l l y a t r a d e - o f f n e g o t i a t i o n where consensus was sought not on the b a s i s o f j u s t n e s s but r a t h e r on the n e g o t i a t i n g power and s k i l l o f the p a r t i e s . The U.S. p o s i t i o n a t Montreal was o u t l i n e d by the Chairman; a f t e r a c k -nowledging the need f o r i n t e r n a t i o n a l c o o p e r a t i o n i n a wor ld-wide regime o f a v i a -t i o n a c c i d e n t l i a b i l i t y , he s a i d , "The p r i n c i p a l concern o f my government now i s to s a f e g u a r d and p r o t e c t our c i t i z e n s . " 7 The U.S. s i n c e r e l y f e l t t h a t they were the o n l y country i n the w o r l d which was s e e k i n g to ensure adequate compensation f o r passengers . One o b s e r v e r a t the meeting compared the U.S. to a proud mother who was watching her son march i n a parade and remarked t h a t a l l the regiment was out o f s tep except her son. Whi le average incomes i n the U.S. had r i s e n 500% s i n c e 1929, t h e i r demands r e g a r d i n g a l i m i t had r i s e n 1,300% over Warsaw. The U.S. f e l t t h a t a r a i s e d l i m i t was j u s t i f i e d i n view o f the c o s t s which they e s t i m a t e d i t would e n t a i l . 8 ' 9 One U.S. a d v i s e r was l a t e r to say o f the p o t e n t i a l h i k e i n c o s t r e l a t i v e to the p r o t e c t i o n i t would o f f e r American t r a v e l l e r s - " A l l o w i n g f o r a reasonable margin o f e r r o r i n what were conceded to be o n l y e s t i m a t e s , the incremental i n s u r a n c e c o s t s a t v a r i o u s l e v e l s taken as a p r o p o r t i o n o f o p e r a t i n g c o s t s were c l e a r l y somewhere between the c o s t o f the o l i v e and the c o s t o f the g i n i n the m a r t i n i and nowhere near the c o s t o f an i n f l i g h t m o v i e . " 1 0 There was a f a i r consensus among the o t h e r n a t i o n s but they were w e l l aware o f the a b i l i t y o f the U.S. to impose a l i a b i l i t y scheme upon them, i n e f f e c t any m u l t i l a t e r a l agreement c o u l d be r e p l a c e d by a u n i l a t e r a l one. The LDCs were i n a p a r t i c u l a r l y d i f f i c u l t p o s i t i o n ; the d e l e g a t e from Senegal urged i n a very e l o q u e n t statement t h a t the meeting look f o r a c o r r e c t balance between the o b l i g a t i o n s o f the c a r r i e r and the r i g h t s o f the passenger , and the needs and means o f a l l s t a t e s p a r t i c i p a t i n g i n i n t e r n a t i o n a l c i v i l a v i a t i o n . The main com-p l a i n t o f t h i s group which comprises t w o - t h i r d s o f ICAO membership was s t a t e d by the T r i n i d a d and Tobago d e l e g a t e . The proposal "would impose a high l e v e l o f i n s u r a n c e p r o t e c t i o n and c o s t on the passenger r e g a r d l e s s o f the passenger's needs o r w i s h e s . " 1 1 The c a r r i e r s foresaw the f o l l o w i n g problem areas connected w i t h h i g h e r l i m i t s : ( i ) U.S. c i t i z e n s would r e c e i v e h i g h e r awards i n U.S. c o u r t s . The o t h e r s t a t e s viewed t h i s as u n j u s t i f i e d but n e v e r t h e l e s s the c o s t o f access to the U.S. market. . ( i i ) C i t i z e n s o f the LDCs would "forum-shop", g a i n i n g venue i n the U.S. c o u r t s and r e c o v e r i n g l a r g e awards a g a i n s t non-U.S. c a r r i e r s . ( i i i ) The h i g h e r l i m i t o f l i a b i l i t y would i n f l u e n c e s e t t l e m e n t s i n o t h e r f i e l d s o f domestic t r a n s p o r t a t i o n . They f e l t high awards would d r i v e up the o v e r a l l l e v e l o f compensation i n t h e i r c o u n t r y . ( i v ) Not o n l y d i d they r e a l i z e they would be s u b j e c t e d to l a r g e i n c r e a s e s i n i n s u r a n c e c o s t s but they f e a r e d any general f a r e i n c r e a s e to c o v e r the added c o s t s by IATA, would be b l o c k e d f o r the U.S. c a r r i e r s by the CAB. D e s p i t e these problems the o t h e r c o u n t r i e s knew they would have to s a t i s f y the U.S. demands, a c c e p t i n g what they c o n s i d e r e d to be adverse e f f e c t s on t h e i r l a w s , p r a c t i c e s and p r o c e d u r e s , both o f t h e i r c o u r t s and a d m i n i s t r a t i o n s . 1 2  However, t h i s w i l l i n g n e s s to f l e x v a r i e d g r e a t l y between n a t i o n s ; P o r t u g a l would not agree to the $ 7 5 , 0 0 0 . 0 0 l i m i t , T r i n i d a d would a g r e e , Sweden proposed $ 1 0 0 , 0 0 0 . and Cuba o b j e c t e d to every U.S. m o t i o n , p r o p o s a l , statement and comment. I t was t h i s l a c k o f u n i f o r m i t y which dest ined the meeting to f a i l u r e . Canada was c o n t i n u a l l y r e f e r r e d to by the U.S. d e l e g a t i o n as another country which needed the h i g h e r l i m i t , i n an attempt to lend s t r e n g t h to a p o s i -t i o n which th 1 - 1 3 , y c u p i e . Canada s d e l e g a t i o n d e c l i n e d t h i s s u g g e s t i o n -untry r e p u t e d l y e n j o y i n g a high s t a n d a r d o f 1LVtificZ!rforffithe C a n a d l 3 n d e l e g a t l ° n U n a b l e t 0 f i n d a n y s u b s t a n t l ' a l 9 t a t a p proxlmate 1 y $100)000*00 as a means o f p r o v i d i n g adequate p r o t e c t i o n f o r Canadian a i r t r a v e l l e r s . The Canadian e x p e r i e n c e shows t h a t the f i g u r e o f $ 3 5 , 0 0 0 . 0 0 as an upward l i m i t o f l i a b i l i t y would go w e l l beyond a l l but a very few o f the c l a i m s which had been s e t t l e d i n P *f o y*der to go some way towards meeting the U.S. p o s i t i o n ) 9 " would be prepared to c o n s i d e r the p o s s i b i l i t y o f goi^9 P * u o f $ 5 0 9 0 0 0 . 0 0 which as the U n i t e d Kin9dom d e l e g a t e has r i g h t l y *f 9 ve ry • The c o s t o f an i n c rea sed l i a b i l i t y l i m i t whether the e s t a b l i shment o f 11 mi ts t h a t wou 1 d a t the same ^^9thy and c o s t l y l i t i g a t i o n . The Canadian d e l e g a t i o n hoped t h a t w een $35)000*00 and $50)000*00 the t r u e balance be tween 0^ "khe t r a v e l l i n g p u b l i c and the a i r l i n e i n d u s t r y cou 1 d be f0und• he Canadian d e l e g a t e a l s o p o i n t e d out the s e r i o u s e f f e c t on Canada o f a rawa1 due to the i n t e n s i v e a i r re1 a110ns between the two c o u n t r i e s * He t h a t i f the U.S. withdrew and a s e r i o u s a c c i d e n t o c c u r r e d on a U*S*~Canada f l i g h t , Canada as w e l l would be f o r c e d to withdraw u n l e s s h i g h e r l i m i t s c o u l d be agreed o n , r e p l a c i n g those o f the Convention and P r o t o c o l . 1 5 I f Canada withdrew the d e l e g a t e f e l t a l l c a r r i e r s o p e r a t i n g i n t o North America would have to waive any l i m i t f o r c o m p e t i t i v e reasons. The p r o p o s a l s p l a c e d before the meeting should be viewed i n l i g h t o f the f o l l o w i n g f a c t s . In 1966 to cover 90% o f U.S. a i r judgments f u l l y , the l i m i t would have to be $ 1 5 0 , 0 0 0 . 0 0 , i n Canada i t would o n l y have to be $ 6 0 , 0 0 0 . 0 0 and the w o r l d average f o r non-Warsaw cases was $ 1 5 , 0 0 0 . 0 0 . The f o u r p r o p o s a l s s e l e c t e d from the i n i t i a l f i f t e e n were put forward by: ( i ) Congo - $ 3 3 , 2 0 0 . 0 0 - passenger can buy more coverage up to a reasonable l i m i t s e t by each government - approval by 50% o f s t a t e s when p r e s e n t e d . ( i i ) France - $ 5 0 , 0 0 0 . 0 0 w i t h o u t c o s t s - A r t i c l e 22 (4) o f the Hague r e g a r d i n g s e t t l e m e n t inducement r e t a i n e d - 66% approved i n c l u d i n g Canada. ( i i i ) Germany, J a m a i c a , Sweden, New Zealand - Warsaw/Hague b a s i s r e t a i n e d but each government c o u l d choose between $ 5 8 , 0 0 0 . 0 0 e x c l u s i v e o f c o s t s o r $ 7 5 , 0 0 0 . 0 0 i n c l u s i v e - 44% a p p r o v a l . ( i v ) I r e l a n d - same as ( i i i ) but w i t h l i m i t s o f $ 5 0 , 0 0 0 . 0 0 and $ 6 4 , 0 0 0 . 0 0 -55% a p p r o v a l . The conference then reached a p o i n t where each d e l e g a t i o n had i n d i c a t e d whether i t approved i n p r i n c i p l e to each p r o p o s a l . S i n c e none o f the p l a n s had r e c e i v e d o v e r a l l support i t was then necessary f o r the meeting t o s e l e c t by e l i m i -n a t i o n the most a c c e p t a b l e p l a n . F r a n c e , backed by a l a r g e number of c o u n t r i e s , b l o c k e d t h i s move on the grounds t h a t i t would f o r c e a d e l e g a t i o n e v e n t u a l l y to vote f o r a p l a n i t d i d not approve o f . Unable to s e l e c t what the m a j o r i t y c o n s i d -ered the " l e a s t - w o r s t " p l a n , the meeting broke up w i t h o u t r e a c h i n g any agreement. The ICAO n a t i o n s had r e s i g n e d themselves to U.S. withdrawal i n May o f 1966 because they c o u l d not a r r i v e a t a consensus. THE GUATEMALA CITY PROTOCOL Immediately a f t e r the Montreal Agreement became e f f e c t i v e , n e g o t i a t i o n s began to once again b r i n g the U.S. i n t o a uni form l i a b i l i t y regime. T h i s was done i n the c o n t e x t o f the meetings o f the Warsaw Subcommittee o f the ICAO Legal Committee. The U.S. n e g o t i a t i n g base was now $ 1 0 8 , 0 0 0 . 0 0 i n c l u s i v e o f c o s t s but the o t h e r n a t i o n s , s t i l l upset over the events of 1965 - 1966 were not r e c e p t i v e . The n o n - p a r t i s a n IUAI s a i d o f the 1967 ICAO meeting - "the committee appears to have f a i l e d , f o r the t ime being at any r a t e , owing to the a t t i t u d e o f the U . S . " 1 The c u r r e n c y o f n e g o t i a t i o n s moved from d o l l a r amounts f o r a l i m i t to the per cent o f c l a i m s which would be f u l l y s a t i s f i e d . The U.S. s e l e c t e d a coverage l e v e l o f 80% o f U.S. c l a i m s , the 20% w i t h p a r t i a l l y covered judgments was the p r i c e the U.S. was w i l l i n g to pay f o r p a r t i c i p a t i o n i n an agreement. The l i m i t would not a f f e c t recovery i n most non-U.S. cases so the c r i t i c a l v a r i a b l e became the l e v e l which 80% o f U.S. awards f e l l under. T h i s move gave the d i s c u s s i o n s a f i r m e r grounding i n the f a c t s o f the s i t u a t i o n . Witness the U.S. S t a t e Depart-ment o f f i c i a l a p p e a r i n g before the Senate Committee i n 1965 who s a i d o f the proposed l i m i t , "The f i g u r e o f $ 5 0 , 0 0 0 . 0 0 i s o f course a r b i t r a r y as any such f i g -ure must be. But i t does r e p r e s e n t a s u b s t a n t i a l amount o f money and i f an a r b i -t r a r y f i g u r e i s t o be chosen i t c e r t a i n l y seems f a r more i n keeping w i t h the economic r e a l i t i e s i n the U.S. than $ 8 , 3 0 0 . 0 0 o r $ 1 6 , 6 0 0 . 0 0 . " 2 The s i t u a t i o n was c o m p l i c a t e d by the f a c t t h a t i n s u r a n c e c o s t s f o r U.S. c a r r i e r s d e c l i n e d a f t e r 1966 w h i l e those o f o t h e r c o u n t r i e s r o s e . I t was e s t i -mated by c o u n t r i e s r e p l y i n g to an ICAO i n q u i r y t h a t a r i s e o f l i m i t a t i o n s to $ 7 5 , 0 0 0 . 0 0 on a w o r l d - w i d e b a s i s would move i n s u r a n c e c o s t s f o r those c a r r i e r s to over.2% o f o p e r a t i n g c o s t s . D e s p i t e t h i s general l a c k o f agreement between the U.S. and the o t h e r p a r t i e s the Assembly o f ICAO adopted a r e s o l u t i o n a t i t s 1968 meeting c a l l i n g on the Legal Committee to have a d r a f t convent ion ready by the end o f 1969 to submit to the s t a t e s . C o u n t r i e s were d e s i r o u s o f p u t t i n g passenger l i a b i l i t y on a more secure and uni form b a s i s * the Montreal Agreement was the work o f c a r r i e r s and not o f n a t i o n s As the Hon Paul M a r t i n then Canada's Sec re t a ry o f S t a t e fo r E x t e r n a l A f f a i r s , t o l d the M c G i l l Conference on the Law o f the A i r i n 1967, "It would seem a d v i s a b l e t h a t a m a t t e r o f t h i s nature which i s r e a l l y one o f government r e s -p o n s i b i l i t y , s h o u l d not c o n t i n u e to f u n c t i o n f o r too long as an agreement between A c a r r i e r s . " There s t i l l remained a l s o a widespread resentment o f the Montreal A Q peernen t which n a t i o n s f e 1t Wei s f o reed upon t h em by the ex to r t i o n o f the U • S • With the conference c a l l e d , n e g o t i a t i o n became more i n t e n s e . In 1969, the U.S. s u b m i t t e d to the ICAO Subcommittee a p l a n c a l l i n g f o r a l i m i t o f $ 1 2 5 , 0 0 0 . w i t h a p r o v i s i o n to a u t o m a t i c a l l y r e v i s e the l i m i t s to r e f l e c t changing economic c o n d i t i o n s such as i n f l a t i o n and a r a i s e d s t a n d a r d o f l i v i n g . L i a b i l i t y was to be a b s o l u t e but the w i l f u l misconduct c l a u s e was to be dropped. IATA countered w i t h an $ 8 3 , 0 0 0 . 0 0 p r o p o s a l . New Zealand entered to mediate and c o n v i n c e d the U.S. to reduce i t s l i m i t to $ 1 0 0 , 0 0 0 . 0 0 . The package, now c a l l e d the New Zealand p r o p o s a l , c o n t a i n e d the f o l l o w i n g p o i n t s : ( i ) A b s o l u t e l i a b i l i t y except f o r c o n t r i b u t o r y n e g l i g e n c e . ( i i ) $ 1 0 0 , 0 0 0 . 0 0 l i m i t . ( i i i ) L i m i t was unbreakable. ( i v ) S e t t l e m e n t inducement c l a u s e on top o f $ 1 0 0 , 0 0 0 . 0 0 . (v) A new forum was added t o A r t i c l e 28 a t U.S. i n s t i g a t i o n - "Court o f p l a i n t i f f ' s d o m i c i l e i f the c a r r i e r has a b u s i n e s s e s t a b l i s h m e n t i n the same c o n t r a c t i n g s t a t e . " T h i s would a l l o w any U.S. c i t i z e n to sue i n U.S. c o u r t s but would prevent forum shopping i n the U.S. by n o n - r e s i d e n t s , ( v i ) Automatic l i m i t r e v i s i o n o f $ 2 , 5 0 0 . 0 0 per y e a r f o r 12 y e a r s . ICAO i n e a r l y 1970 approved the proposal by a very narrow margin ( 1 9 - 1 3 - 6 ) . IATA r e f u s e d to agree on the ground t h a t i t d i d not take i n t o account the a v e r -age income o f passengers i n the m a j o r i t y o f the w o r l d ' s n a t i o n s but IATA r e v e r s e d t h i s s t a n d i n 1970 when i t s t a t e d t h a t a i r t r a n s p o r t was now an a d u l t i n d u s t r y and no l o n g e r needed the p r o t e c t i o n a f f o r d e d i t i n p r e v i o u s years by low l i m i t s . Based on the New Zealand package the ICAO Subcommittee adopted the f i n a l t e x t o f the new l i a b i l i t y agreement which they f e l t balanced the views o f the U.S. and the o t h e r n a t i o n s . More i m p o r t a n t l y , i t r e f l e c t e d the r e l a t i v e s t r e n g t h s o f the p a r t i e s t h a t would debate the scheme. A d i p l o m a t i c conference was scheduled f o r Guatemala C i t y to c o n s i d e r the d r a f t . The U.S. had long s i n c e r e j e c t e d the concept o f a l i m i t s e t a t average re cov e ry . "When we speak o f l i m i t s we do not t h i n k o f average recovery — we mean by an a c c e p t a b l e l i m i t o f l i a b i l i t y a f i g u r e t h a t w i l l p e r m i t most people i n many c o u n t r i e s to e s t a b l i s h i n accordance w i t h the l e g a l system o f the country where they and t h e i r f a m i l i e s r e s i d e , a monetary v a l u e f o r the l o s s they have s u f f e r e d as a r e s u l t o f the i n j u r y . " 6 T h e i r expressed goal was f o r 80% o f U.S. v i c t i m s to o b t a i n f u l l recovery and p r e d i c a t e d on t h i s they had n e g o t i a t e d the $ 1 0 0 , 0 0 0 . 0 0 l i m i t . In p r e p a r a t i o n f o r the conference the CAB d i d a study o f recovery l e v e l s i n the U.S. and the r e s u l t was a bombshell - the f i g u r e s f o r .average domestic s e t t l e m e n t s i n a v i a t i o n a c c i d e n t s were: 1950 - 1958 $ 3 8 , 5 0 0 . 0 0 1958 - 1964 $ 5 2 , 0 0 0 . 0 0 1964 - 1968 $ 9 0 , 0 0 0 . 0 0 1970 ( f i r s t h a l f ) $ 2 0 0 , 0 0 0 . 0 0 7 A $ 1 0 0 , 0 0 0 . 0 0 l i m i t would have d e p r i v e d 27.9% o f f u l l recovery i n 1966 but i n 1970 t h a t f i g u r e rose to 6 3 . 2 % . 8 To c o v e r 80% o f U.S. awards the l i m i t would have to be $300,000.00+ and f o r a 90% cover i n excess o f $ 4 0 0 , 0 0 0 . 0 0 . The U.S. was now t rapped by i t s e a r l i e r i n a c c u r a t e f i g u r e s and the r a p i d l y e s c a l a t i n g judgment l e v e l . They c o u l d not d i s c a r d the progress made i n the p a s t f i v e years but n e i t h e r c o u l d they recommend to Congress a t r e a t y they knew was i n a d e q u a t e . There were two o p t i o n s open to the U.S. ( i ) A Convention w i t h o u t l i m i t s . ( i i ) An i n t e r n a t i o n a l l i m i t combined w i t h a domestic supplemental p l a n s e p a r -a t e l y funded. The o t h e r n a t i o n s a t Guatemala C i t y were prepared to go to a $ 1 0 0 , 0 0 0 . 0 0 l i m i t o n l y i f i t was c o m p l e t e l y u n b r e a k a b l e . The U.S. met them on the $ 1 0 0 , 0 0 0 . 0 0 f i g u r e i f the U.S. was p e r m i t t e d a domestic supplement package. The supplement i s s u e became the main p o i n t o f c o n t e n t i o n at the c o n f e r e n c e . T h i s r e p r e s e n t e d the f i r s t step away from the p u s h - p u l l s i t u a t i o n over l i m i t l e v e l and towards a package t h a t would more a c c u r a t e l y s a t i s f y the means and needs o f each c o u n t r y . R e a l i z i n g the supplement was the p r i c e o f U.S. p a r t i c i p a t i o n the o t h e r n a t i o n s consented. A r t i c l e 35A o f the P r o t o c o l s e t out the f o l l o w i n g g u i d e l i n e s : ( i ) The r u l e s should not prevent a s t a t e from adopt ing any system o f domestic supplement i n accordance w i t h i t s u n d e r l y i n g l e g a l system as long as i t p r o t e c t s the v a l i d i n t e r e s t s o f the o t h e r s t a t e s and i n t e r n a t i o n a l a i r c a r r i e r s . ( i i ) I t s h o u l d guarantee the r i g h t o f the c a r r i e r to be f r e e o f any l i a b i l i t y i n excess o f the Convention l i m i t . ( i i i ) The f i n a n c i a l burden o f the p l a n w i l l be p l a c e d on the u l t i m a t e bene-f i c i a r i e s . ( i v ) A p p l i e s to a l l c i t i z e n s and permanent r e s i d e n t s o f the s t a t e concerned on a l l i n t e r n a t i o n a l f l i g h t s s u b j e c t to the C o n v e n t i o n . (v) Ensures t h a t the economic c o s t f a l l s evenly on those e l i g i b l e . ( v i ) The c o m p e t i t i v e advantage o f a i r l i n e s i s to be m a i n t a i n e d . ( v i i ) Permits no recourse a g a i n s t the a i r l i n e i n the event o f a n o n - c o l l e c t i o n o f premium from a passenger. The U.S. was vague at the conference r e g a r d i n g the proposed supplement but i s p r e s e n t l y d e v e l o p i n g a p l a n which covers any U.S. c i t i z e n , r e s i d e n t o r n o n - r e s i d e n t , o r r e s i d e n t a l i e n a t the time o f the i n c i d e n t g i v i n g r i s e to the c l a i m . The scheme r e q u i r e s the c o l l e c t i o n o f a surcharge from every passenger d e p a r t i n g the U.S. whether o r not they are one o f the persons l i s t e d above. The money c o l l e c t e d i s p a i d t o a " c o n t r a c t o r " who i s l i a b l e f o r any s e t t l e m e n t i n excess o f the a p p l i c a b l e l i m i t . The l i m i t on the p l a n has been suggested as $ 2 0 0 , 0 0 0 . 0 0 o f excess r e c o v e r y . Any passenger c o n t r i b u t i n g on a U.S. o r i g i n a t i n g f l i g h t w i l l be covered by the p l a n . In a d d i t i o n , any U.S. c i t i z e n o r r e s i d e n t w i l l be covered on any i n t e r n a t i o n a l f l i g h t even i f he has not c o n t r i b u t e d and the f l i g h t takes p l a c e t o t a l l y o u t s i d e the U.S. Three p o i n t s appear to e n t a i l d e f e a t f o r t h i s p l a n : ( i ) The surcharge i s an added c o s t f o r any U.S. o r i g i n a t i n g f l i g h t . The e n t i r e c o s t o f a $ 3 0 0 , 0 0 0 . 0 0 l i m i t not o n l y f o r passengers on those f l i g h t s but a l s o any U.S. r e s i d e n t o r c i t i z e n t r a v e l l i n g anywhere i n the w o r l d i s imposed on U.S. o r i g i n a t i n g f l i g h t s . By c o n c e n t r a t i n g the burden on these f l i g h t s , the scheme o f f e n d s the g u i d e l i n e t h a t the c o m p e t i t i v e r e l a t i o n s h i p s o f c a r r i e r s w i l l be a l t e r e d . The f e a r s o f the c a r r i e r s t h a t would be s a d d l e d w i t h the surcharge a r e heightened by the p r o s p e c t o f r a i s i n g the p l a n l i m i t p a s t the $ 1 0 0 , 0 0 0 . 0 0 and $ 2 0 0 , 0 0 0 . 0 0 p r o p o s e d . 9 ( i i ) The f a c t t h a t a l l passengers d e p a r t i n g the U.S. c o n t r i b u t e e q u a l l y to a p l a n which f a v o r s a U,S. c i t i z e n o r r e s i d e n t by the extended coverage they r e c e i v e goes a g a i n s t the g u i d e l i n e o f A r t i c l e 35A which d e a l s w i t h d i s c r i m i n a t i o n a g a i n s t passengers. ( i i i ) The P r o t o c o l r e q u i r e s a t w o - t h i r d s m a j o r i t y vote o f the U.S. Senate. I t i s improbable t h a t any t r e a t y l i m i t i n g recovery by American c i t i z e n s and imposing a surcharge f o r t h a t l i m i t e d l i a b i l i t y c o u l d g a i n t h a t degree o f s u p p o r t . R e a l i z i n g the f u t i l i t y o f any agreement which the U.S. does not p a r t i c i p a t e i n , the P r o t o c o l c o n t a i n s a c l a u s e which i n d i r e c t l y p r o v i d e s t h a t i t w i l l not be e f f e c t i v e u n t i l the U.S. r a t i f i e s i t . The Guatemala C i t y P r o t o c o l r e p r e s e n t s the most r e c e n t e f f o r t to b r i n g a l l o f i n t e r n a t i o n a l c i v i l a v i a t i o n t o g e t h e r under one passenger l i a b i l i t y agreement. I t appears to be headed f o r d e f e a t so the n a t i o n s must once a g a i n examine the s i t u -a t i o n and p i e c e t o g e t h e r a p l a n which w i l l be a c c e p t a b l e . PROPOSAL What i s needed i s an e n t i r e l y new system based not upon the framework which remains o f the Warsaw Convention but r a t h e r upon the p r i n c i p l e s which m o t i v a t e d the o r i g i n a l inst rument and the knowledge gained over the p a s t 45 years i n t r y i n g to apply those p r i n c i p l e s i n a c o n s t a n t l y changing environment. The proposal i s to be drawn from the p r e c e d i n g data p r e s e n t e d i n a c h r o n o l o g i c a l framework. In an area the nature o f which i s q u a l i t a t i v e , the v a l i d i t y o f t h i s p r o p o s a l must be t e s t e d by i t s c o n s i s t e n c y w i t h those f a c t s . By t r a c i n g the course o f passenger l i a b i l i t y forward to the p r e s e n t , the ob-j e c t was to assemble a mass o f ev idence a g a i n s t which the proposal can be measured and a p p r e c i a t e d . Three general o b s e r v a t i o n s must p r e f a c e any p r o p o s a l : ( i ) The gap which now e x i s t s between the p o s i t i o n s o f the U.S. and the o t h e r n a t i o n s can be b r i d g e d by a scheme based not on t r a d i t i o n a l n o t i o n s o f f a u l t and l i a b i l i t y but on a concept o f compensation and i n s u r a n c e . ( i i ) An optimum s o l u t i o n i s sought t o the need f o r moderniz ing the l i a b i l i t y regime, s t r i k i n g an e q u i t a b l e balance between the i n t e r e s t s o f the c a r r i e r s and t h e i r passengers w i t h i n a framework a c c e p t a b l e to the governments who are r e s p o n s i b l e f o r the w e l f a r e o f both groups. ( i i i ) Any proposal s h o u l d be i n keeping w i t h the move o f law towards a g r e a t e r s o c i a l o r i e n t a t i o n ; i n the f u t u r e i t w i l l be l e s s o f a t o o l f o r imposing s o l u t i o n s o f the powerful on the weak and more a v e h i c l e f o r r e c o n c i l i n g a broad range o f c o n f l i c t i n g i n t e r e s t s . On a more p r a c t i c a l l e v e l the proposal must meet the f o l l o w i n g r e q u i r e -ments: ( i ) Aim a t u n i v e r s a l a c c e p t a n c e , n e c e s s a r i l y i n c l u d i n g the U.S. ( i i ) P r o v i d e c e r t a i n recovery f o r l o s s . ( i i i ) Promote u n i f o r m i t y i n the law through a c l e a r and s i m p l e system. ( i v ) Be conducive to the s e t t l e m e n t o f c l a i m s q u i c k l y and a t minimum l e g a l c o s t . (v) P r o v i d e f o r f u l l compensation to a high percentage o f c l a i m s a t the same time p r o t e c t i n g the c a r r i e r . ( v i ) Be adaptable to developments i n a i r t r a n s p o r t a t i o n e . g . l a r g e r a i r c r a f t and automated on-board t i c k e t i n g . The p a r t i e s have been o v e r l y concerned w i t h the l e v e l s e t on the l i a b i -l i t y l i m i t a t i o n , l e a d i n g to impasses which the U.S. can and w i l l r e s o l v e by l e a v i n g the Agreement and r e l y i n g on her massive t r a f f i c g e n e r a t i o n to p r o t e c t c i t i z e n s . While d i s c u s s i o n remains s t a l l e d on t h i s narrow q u e s t i o n , t h e r e i s no p o s s i b i l i t y o f c o n c i l i a t i o n - a p o i n t i s i n e v i t a b l y reached beyond which the p a r t i e s w i l l not compromise. The f a i l u r e o f the 1966 ICAO meeting i n Montreal can be a t t r i b u t e d to t h i s . The d e l e g a t e s were not prepared and p r o b a b l y not a u t h o r i z e d to d i s c u s s o t h e r than l i m i t s . The d e l e g a t e s f e l t "the o n l y p o s s i b i -l i t y i s to agree on a l i m i t o f l i a b i l i t y high enough to s a t i s f y the U.S. y e t not so high as to f r i g h t e n away the d e v e l o p i n g c o u n t r i e s . " The c e n t r a l p o i n t o f t h i s t h e s i s i s t h a t agreement l i e s i n the area o f "packages" - m u l t i p o i n t n e g o t i a t i o n s . The aspect o f q u i d pro quo i s seen to be p e r v a s i v e throughout the e n t i r e development o f passenger l i a b i l i t y - by i d e n t i f y -i n g areas where the p o t e n t i a l of t r a d e - o f f e x i s t s the d i s t a n c e between the p a r t i e s can be narrowed. There are numerous areas where a c o n c e s s i o n i s p o s s i b l e a t l e s s e r cost to one p a r t y i n r e l a t i o n t o the magnitude o f b e n e f i t gained by the o t h e r . Re-peated r e c i p r o c a t i o n s i n cases l i k e t h i s holds the promise o f agreement i n which both p a r t i e s are reasonably s a t i s f i e d w i t h the outcome. An example o f the compromises i n h e r e n t i n m u l t i p o i n t n e g o t i a t i o n s : ( i ) LATA - "It s h o u l d be s t r e s s e d t h a t the IATA p l a n i s a package. The acceptance o f the p r i n c i p l e o f a b s o l u t e l i a b i l i t y w i t h r e v i s e d l i m i t s o f l i a b i l i t y cannot be d i v o r c e d from the proposed e l i m i n a t i o n o f the a r t i c l e s i n the Convention r e l a t i n g t o documentation and w i l f u l m i s c o n -d u c t . The r e t e n t i o n o f e i t h e r o f these two l a s t - m e n t i o n e d f e a t u r e s , however worded, would i n v a l i d a t e the e n t i r e IATA p l a n . " 2 ( i i ) U.S. - "We have reviewed a l l o f the comments made i n the past ten days i n an e f f o r t to propose a package which combines both the minimum r e -quirements o f the U.S. w i t h p r o v i s i o n s we hope are a c c e p t a b l e to o t h e r s . As p a r t o f t h i s r e v i s e d package we w i l l propose a f i g u r e s i g n i f i c a n t l y lower than our o r i g i n a l $ 1 2 5 , 0 0 0 . 0 0 l i m i t but which i s a l s o the minimum l e v e l a c c e p t a b l e to the U.S. Th is l e v e l l e a v e s us no room f o r b a r g a i n i n g on the o t h e r key f e a t u r e s i n the p a c k a g e . " 0 I f these statements are s t r i p p e d o f the obvious t a c t i c s o f n e g o t i a t i o n , what i s l e f t i s a w i l l i n g n e s s to t r a d e - o f f to reach an agreement. Both s t a t e -ments c o n t a i n p r o v i s i o n s counter to the i n t e r e s t o f the p a r t y s p e a k i n g . The pr imary requirement o f the proposal i s a c c e p t a b i l i t y and, t h e r e f o r e , the package must s a t i s f y the b a s i c needs o f each p a r t y f u l l y . The U.S. has long urged r e c o g n i t i o n o f f u l l c o s t s - t h a t i s , compensation f o r a l l l o s s e s r e s u l t i n g from an i n c i d e n t . The i n d u s t r y can no l o n g e r r e c e i v e s u b s i d i z a t i o n from the f a m i l i e s o f i n c i d e n t a l v i c t i m s . On the o t h e r hand, the scheme must not go beyond r e c o g n i t i o n o f c o s t s , g i v i n g compensation where no economic l o s s e x i s t s . S a t i s f a c t i o n o f U.S. demands w i l l f o r c e i n s u r a n c e c o s t s upward but the proposal balances t h i s by i d e n t i f y i n g means to i n c r e a s e the "accuracy" o f compensation and e x e r t i n g a downward i n f l u e n c e on r a t e s , p o s s i b l y below present l e v e l s . I f the e r r o r i n the p r e s e n t l i a b i l i t y regime c o u l d be d e s c r i b e d i n one word i t would be " i n a c c u r a t e " . I t f a i l s to compensate f u l l y most o f the v i c t i m s y e t p r o v i d e s f o r awards i n cases where the l o s s does not warrant i t . The i n t e r e s t s o f both p a r t i e s c o u l d be met i n a p r o -posal which was d i r e c t e d towards a c c u r a t e compensation. Based on the p r e c e d i n g g u i d e l i n e s , the proposal c o n t a i n s the f o l l o w i n g a s p e c t s : ( i ) ABSOLUTE LIABILITY - The concept o f f a u l t i s a l i e n to a system which has compensation as a g o a l . The passenger r e c e i v e s a s w i f t and c e r t a i n r e -covery and the c a r r i e r concedes l i t t l e as under the common law he i s t r e a t e d i n a s i m i l a r f a s h i o n . The U.S. has shown t h a t c o n c e s s i o n by the c a r r i e r on t h i s p o i n t would be met w i t h a lower l i m i t demand. " A s o l u -t i o n p r o v i d i n g f o r l i a b i l i t y w i t h o u t f a u l t would be a c c e p t a b l e a t a l e v e l somewhat lower than a regime c o n t i n u i n g w i t h a p r o v i s i o n t h a t merely s h i f t e d the burden o f p r o o f . I t reduces the t ime and c o s t o f p r e s e n t i n g 4 a c l a i m y i e l d i n g a h i g h e r net b e n e f i t . " The c a r r i e r would b e n e f i t i f a b s o l u t e l i a b i l i t y were r e q u i r e d as i t would cure a d e f e c t t h a t e x i s t s i n the Montreal Agreement. In the case o f 3n s e t o r omi s s l o n o f s t h i r d p s r t y c s u s l n cj the l n j ury^ the c s r r i e r i s i n i t i a l l y l i s b l e but s r icjht o f recourse e x i s t s scj s i n s t the t h i r d p s t y by the c s r r i e r « H o w e v e r » , i f the c s r r i e r v o l u n t s r i l y wsives h i s defence under A r t i c l e 20 ( 1 ) , the t h i r d p a r t y may d e f e a t the r e c o u r s e a c t i o n because the c s r n e r csn r e c o v e r o n l y i f he wss l e c j s l l y obl ic jed to p s y « The t h i r d p s r t y msy now s l l e c j e t h s t the c s r r i e r wss not obl ic jed to compensate to t h s t l e v e l but d i d so v o 1 u n t s r i l y « ( i i ) VERY HIGH LIMIT - R e c o g n i t i o n o f the c e n t r a l r o l e o f the U.S. i n any f u t u r e agreement d i c t a t e s t h a t the proposal i n c o r p o r a t e the essence o f t h e i r demands. Acceptance by the U.S. i s c o n t i n g e n t on the removal o f s e r i o u s c o n s t r a i n t s on recovery by v i c t i m s and t h e i r f a m i l i e s . A p r o -posed l i m i t o f $ 3 0 0 , 0 0 0 . 0 0 would be a probable range - viewed by the U.S. as adequate but s h o r t o f a w i n d f a l l . For the r e s t o f the w o r l d , i t i s e q u i v a l e n t to u n l i m i t e d l i a b i l i t y ; i t s s o l e e f f e c t would be to p r o t e c t the p l a n from e x t r a o r d i n a r y U.S. awards such as the 1963 Chicago j u r y t r i a l which awarded $2 m i l l i o n f o r the death o f a young g i r l w i t h o u t 5 dependents. The proposed f i g u r e approximates the 80% coverage t h a t the U S spoke o f the 20^ o f cases which are not f u l l y s a t i s f i e d r e p r e s e n t s the p r i c e the U • S * i s w i l l i n g to pay f o r a new agreement* A f i g u r e above 20^ would not be a c c e p t a b l e to the U * S • i n l i g h t of the b e n e f i t s the U * S * would r e c e i v e . The proposal i s based on the f a c t t h a t the c e n t r a l n a t i o n i n the nego¬t i a t i o n s views $300$000•00 j u s t compensation* I t i s not put forward as a f i g u r e which i s seen to be high o r 1 o w $ j u s t o r unjust*, but r a t h e r as a f i g u r e which i s a necessary p a r t o f a workab1e proposal• I f the n a t i o n s y i e l d to the U.S. on t h i s point . , they w i l l be i n a p o s i t i o n to n e g o t i a t e o t h e r p o i n t s which would 1ead to a sharpening o f the compensation scheme and 1 ov\/er i n s u r a n c e costs* ( i i i ) UNBREAKABLE LIMITS - C o u n t r i e s o t h e r than the U.S. have i n d i c a t e d t h a t they would accept a high l i m i t i f i t i s unbreakable i n view o f the t r e a t -ment p r e v i o u s agreements have r e c e i v e d i n U.S. c o u r t s . The IUAI has s t a t e d t h a t the l a c k o f c e r t a i n t y caused by b r e a k a b l e l i m i t s has been r e -f l e c t e d i n h i g h e r i n s u r a n c e premiums. P r o t r a c t e d t r i a l s a l s o r e s u l t from these p r o v i s i o n s , the a u t o m a t i c payment i s used as a w a r - c h e s t to f i n a n c e an attempt a t f u l l damages by means o f the l i m i t - v o i d i n g c l a u s e s . 6 The two areas o f concern a r e : (a) W i l f u l Misconduct - N a t i o n s are faced w i t h a d i f f i c u l t c h o i c e -they are p h i l o s o p h i c a l l y opposed to l i m i t s i n the case o f genuine misconduct but the abuses o f U.S. c o u r t s o f t h i s p r o v i s i o n more than o f f s e t t h i s f e e l i n g , (b) N o t i c e - The m u l t i p l e regimes and s e r i o u s d i f f e r e n c e s between domestic and i n t e r n a t i o n a l l i a b i l i t y make n o t i c e necessary . The disagreement a r i s e s when the inducement to g i v e n o t i c e i s d i s c u s s e d ; the U.S. i n s i s t s t h a t i t i s a q u i d pro quo f o r l i m i t a t i o n and i f there i s no n o t i c e there s h o u l d be no l i m i t a t i o n . To a v o i d n o t i c e requirements and the consequent p e n a l t y f o r f a i l u r e to i s s u e , the o t h e r c o u n t r i e s have urged c o n s t r u c t i v e n o t i c e but on t h i s p o i n t i t must be observed t h a t the l i m i t a t i o n s are not so much n a t i o n a l law but p a r t o f a c o n t r a c t which the passenger must v o l u n t a r i l y e n t e r i n t o . The proposal on t h i s p o i n t s e t s o u t : (a) W i l f u l misconduct o r any o t h e r cause w i l l not j u s t i f y o r permit u n l i m i t e d l i a b i l i t y . (b) F a i l u r e to g i v e n o t i c e i s not cuase f o r u n l i m i t e d l i a b i l i t y . Res-p o n s i b i l i t y f o r n o t i c e s h o u l d be shared between the c a r r i e r (wi thout p e n a l t y ) and the government; p r o v i d i n g n o t i c e on t i c k e t s , at a i r t e r m i n a l s and t i c k e t o f f i c e s . A general n o t i c e i n p a s s p o r t s t h a t recovery f o r death o r i n j u r y may be l i m i t e d i n t r a n s p o r t a c c i d e n t s o u t s i d e the country would be u s e f u l . A p a r t from the Warsaw Conventio agreements such as the Berne Rai lway Union Convention and the CIV Rules l i m i t the c a r r i e r ' s l i a b i l i t y abroad. D i s c u s s i o n o f n o t i c e i s put i n p e r s p e c t i v e by a B r i t i s h survey c a r r i e d out i n 1967 at Heathrow A i r p o r t . 512 U.S. passengers were randomly s e l e c t e d and i n t e r v i e w e d , a f t e r being shown a sample o f the Warsaw n o t i c e , t h r e e q u e s t i o n s were asked o f them: "Is t h i s n o t i c e i n y o u r a i r l i n e t i c k e t ? " Yes - 35% (181) No - 31% (160) Don't Know - 34% (171) Those answering "yes" to the f i r s t q u e s t i o n were a s k e d , "Did you read the n o t i c e before boarding the a i r c r a f t ? " Yes - 19% (95) No - 17% (86) Those answering "yes" to the second q u e s t i o n were a s k e d , "Did you take out a d d i t i o n a l i n s u r a n c e as a r e s u l t o f r e a d i n g the n o t i c e ? " Yes - 4% (20) No - 15% (75) ( i v ) RESTRICTED RIGHT TO SUE - T h i s p r o v i s i o n would a c t to cut i n s u r a n c e c o s t s , i n p a r t , o f f s e t t i n g the e f f e c t o f a high l i a b i l i t y l i m i t . The p r o p o s a l i s d i r e c t e d towards compensation and the accuracy o f i t i s improved by n a r -rowing the group o f people e n t i t l e d to sue f o r damages. T h i s would be a f a m i l y member e c o n o m i c a l l y dependent on the v i c t i m i n c l u d i n g a w i f e , c h i l d -r e n , and i n some cases a husband o r dependent p a r e n t . A l l o t h e r s are excluded from s u i t as the p r o p o s a l does not attempt to p l a c e a value on human tragedy but o n l y on economic l o s s o f s u r v i v o r s . R e s t r i c t i n g the category o f c l a i m a n t s i s c o n s i s t e n t w i t h the t r e n d o f s o c i a l w e l f a r e schemes e . g . pensions and workman's compensation. I t has long been an accepted p r a c t i c e i n c i v i l law c o u n t r i e s t o r e s t r i c t s u i t . The Nether lands C i v i l Code o f 1835 i n S.1406 l i m i t s an a c t i o n f o r wrongful death to a w i f e , c h i l d o r supported p a r e n t s . E l i m i n a t i n g w i n d f a l l awards reduces the burden p l a c e d on a compensatory p l a n ; s i n c e the U.S. i s concerned w i t h r e c o g n i t i o n o f l e g i t i m a t e c o s t s , they would y i e l d on t h i s p o i n t to b e n e f i t e c o n o m i c a l l y dependent s u r v i v o r s . (v) COLLATERAL BENEFITS - The t r a d i t i o n a l argument a g a i n s t c o n s i d e r a t i o n o f c o l l a t e r a l b e n e f i t s was t h a t the t o r t f e a s o r should not be r e l i e v e d o f h i s l i a b i l i t y because o f p r o v i s i o n s made by the p l a i n t i f f . C o l l a t e r a l bene-f i t s would i n c l u d e p e n s i o n s , i n s u r a n c e and a s s e t s ; r e l a t e d to t h i s are m i t i -g a t i n g c i rcumstances e . g . the w i f e has r e m a r r i e d . When the concept o f f a u l t i s r e p l a c e d by an i n t e r e s t i n compensat ion, t h i s o b j e c t i o n i s removed. However, i n c o n t r a s t to most o t h e r c o u n t r i e s which are c a t e g o r i c a l l y committed to the compensatory and opposed to the p u n i t i v e theory o f damages, American c o u r t s c o n t i n u e to e n t e r t a i n an am-biguous and uneasy t o l e r a n c e o f double r e c o v e r y . B u t , i f the U.S. concedes on t h i s p o i n t , t o which they a t t a c h no reasoned s i g n i f i c a n c e , i n s u r a n c e c o s t s would take another drop. The proposal t h e r e f o r e c a l l s f o r a judge w i t h o u t j u r y s i t t i n g i n an a d m i n i s t r a t i v e c a p a c i t y to c a l c u l a t e the p l a i n t i f f s ' l o s s s u b t r a c t i n g from i t the c o l l a t e r a l b e n e f i t s a v a i l a b l e to the c l a i m a n t . Whi le t h i s e x t e r n a l -i z e s some i n d u s t r y c o s t , i t achieves adequate compensation a t minimum c o s t to the c a r r i e r and u l t i m a t e l y the passenger. ( v i ) CONTRIBUTORY NEGLIGENCE - Comparative n e g l i g e n c e i s t h e o r e t i c a l l y not a p a r t o f an absolute- l i a b i l i t y system but there must be some p r o v i s i o n to reduce the award where any p l a i n t i f f o r v i c t i m has by h i s b e h a v i o r c o n t r i -buted to the damaging event o r i n c r e a s e d the damage caused. This i s s u e does not a r i s e i n any s e r i o u s i n c i d e n t but the p l a n s h o u l d not have to bear a c o s t o f t h i s n a t u r e . ( v i i ) WAR RISKS AND SABOTAGE - D e s p i t e the use o f the term "absolute" i n r e f e r -ence to p r e v i o u s l i a b i l i t y arrangements, these r i s k s were e x c e p t e d . In t h a t the proposal i s concerned w i t h compensation and not f a u l t o r c a u s a t i o n the system w i l l i n c l u d e these r i s k s . A i r l i n e s do not want r e s p o n s i b i l i t y f o r l o s s by sabotage but t h i s r e i n -t roduces the element o f f a u l t , the widow o f an i n n o c e n t v i c t i m i s no more r e s p o n s i b l e f o r the l o s s than the c a r r i e r . The l a t t e r can best assume war r i s k s as they can a v o i d the area o r pay h i g h e r i n s u r a n c e premiums to o b t a i n coverage. P r i v a t e i n s u r a n c e a g a i n s t war and armed c o n f l i c t i s not a v a i l a b l e i n any form to a passenger. T r i p i n s u r a n c e excludes i t as does annual t r a v e l i n s u r a n c e and no a d d i t i o n a l premium w i l l o b t a i n i t . Th is has a c o n s i d e r a b l e e f f e c t on i n s u r a n c e c o s t s i n a w o r l d where a i r -c r a f t are o f t e n the t a r g e t o f armed c o n f l i c t s which o c c u r c o n t i n u a l l y . The proposal t h e r e f o r e tempers the coverage i n l i g h t o f i n s u r a n c e c o s t s by a l l o w i n g the c a r r i e r i n the case o f f l i g h t s proximate to an area c u r r e n t l y s u b j e c t to h o s t i l i t i e s t o : (a) C o n t r a c t e x p r e s s l y w i t h the passenger t h a t war r i s k s are e x c l u d e d , o r (b) U n i l a t e r a l l y suspend w i t h o u t n o t i c e the war r i s k coverage a f t e r a s e t time has e l a p s e d s i n c e the o u t b r e a k . ( v i i i ) REVISION - The proposal c o n t a i n s an automat ic l i m i t r e v i s i o n to ensure t h a t compensation p a i d f o l l o w i n g an a c c i d e n t m a i n t a i n s i t s p u r c h a s i n g power. R e v i s i o n i s n e c e s s i t a t e d by i n f l a t i o n and the r i s i n g income of a i r t r a n s p o r t passengers . The Guatemala C i t y P r o t o c o l c o n t a i n e d a s i m p l e annual a d d i t i o n o f 2.5% to the l i m i t w i t h a conference every f i v e years to d e c i d e on i t s c o n t i n u a t i o n . Two problems are e v i d e n t h e r e : (a) Any proposal t h a t r e q u i r e s conference approval d u r i n g i t s o p e r a t i o n i s c e r t a i n to f a i l . D i s c u s s i o n s o f t h i s nature have been going on s i n c e 1929. (b) The 2.5% l i m i t i s too low - i n the p e r i o d 1960-70 the median r a t e o f i n f l a t i o n i n ICAO c o u n t r i e s was 4 . 2 5 % , the average was 7% and r a t e s were as high as 53.5% a n n u a l l y . C u r r e n t l y , double d i g i t i n -f l a t i o n e x i s t s i n a l l c o u n t r i e s . The r e v i s i o n c l a u s e i n the proposal c a l l s f o r a l i m i t r a i s e based on a Consumer P r i c e Index. The I n t e r n a t i o n a l Monetary Fund m a i n t a i n s a CPI f o r the v a s t m a j o r i t y o f ICAO s t a t e s . The annual r e v i s i o n would equal the r i s e i n aggregate C P I , the r i s e i n each s t a t e being m u l t i p l i e d by t h a t c o u n t r y ' s a i r t r a f f i c to gain a weighted average. T h i s w i l l a s s u r e the U . S . , the o n l y country a f f e c t e d by the l i m i t , t h a t r e v i s i o n w i l l be h i g h e r than the 2.5% they themselves proposed and based to a l a r g e e x t e n t on t h e i r own r a t e o f i n f l a t i o n , due to t h e i r t r a f f i c g e n e r a t i o n . A t the same t ime the o t h e r c o u n t r i e s w i l l be a s s u r e d o f a r a t e o f i n c r e a s e t h a t i s l e s s than the r i s e i n magnitude o f U.S. awards. ( i x ) DAMAGE JURISDICTION - T h i s i s the main element i n a p l a n to a c c u r a t e l y compensate l o s s ; i t i s a uni form and e x c l u s i v e c h o i c e o f law r e g a r d i n g damages based on the d o m i c i l e o f the p l a i n t i f f . The pr imary j u s t i f i c a t i o n i s the f a c t t h a t f o r e i g n s t a t e s have t h e i r own laws and p r a c t i c e s f o r c a l -c u l a t i n g damages and the system used a t the forum s h o u l d not be a l l o w e d to i n f l u e n c e o r i n t e r f e r e w i t h the a p p l i c a t i o n o f those laws and p r a c t i c e s . Persons are connected to a s t a t e by d o m i c i l e and n a t i o n a l i t y . D o m i c i l e i s based on the f a c t o f r e s i d e n c e coupled w i t h an i n t e n t i o n to permanently r e s i d e i n t h a t p l a c e , whereas n a t i o n a l i t y operates r e g a r d l e s s o f i n t e n t i o n o r r e s i d e n c e . Of these two, d o m i c i l e y i e l d s the most j u s t economic r e s u l t f o r the s u r v i v i n g f a m i l y . S e l e c t i o n o f law should be on the b a s i s o f p r o v i d i n g f o r the s u r v i v o r s a s t a n d a r d o f l i v i n g s i m i l a r to the one they would have enjoyed had the passenger not been k i l l e d , i n the economic environment i n which they would most l i k e l y c o n t i n u e to l i v e . Loss i s best d e t e r m i n e d , t h e r e f o r e , by the economic standards o f the p l a i n t i f f ' s d o m i c i l e . Inherent i n a c h o i c e o f law p r o v i s i o n r e g a r d i n g damages i s the n e c e s s i t y o f denot ing f o r a which w i l l f u r t h e r the f u l f i l l m e n t o f the p r o p o s a l . C u r r e n t l y j u r i s d i c t i o n i s based i n the Convention on the a b i l i t y o f t h a t c o u r t to e x e r c i s e c o n t r o l over the defendant c a r r i e r . In a t ime when t h e r e was l i t t l e o r no co¬o p e r a t i o n between n a t i o n s r e g a r d i n g enforcement o f f o r e i g n judgments t h i s was necessary ; However, now t h a t enforcement procedures are b l o c k e d o n l y s l i g h t l y by n a t i o n a l b o r d e r s , i t i s p o s s i b l e to have a c o u r t which has no c o n t r o l o v e r the c a r r i e r i s s u e the judgment and have a c o u r t i n a country such as the U.S. who can c o n t r o l the c a r r i e r , back and e n f o r c e the judgment. The c o o p e r a t i o n o f the c o u n t r i e s w i t h i n an i n t e r n a t i o n a l l i a b i l i t y agreement can be extended to e n f o r c i n g judgments i s s u e d under the a u t h o r i t y o f t h a t agreement. T h i s c l e a r s the way to s e l e c t f o r a not on the b a s i s o f c a r r i e r c o n t r o l but on i n t e r e s t i n the p l a i n t i f f ' s w e l f a r e . Two p o s s i b l e o p t i o n s are open here: (1) Add a f o r a to the present f o u r l i s t e d ; the c o u r t o f the d o m i c i l e o f the p l a i n t i f f . T h i s would open the p o s s i b i l i t y o f the d o m i c i l e c o u r t hear ing the case but t h e r e are s t i l l f o u r o p p o r t u n i t i e s f o r forum-shopping w i t h a l l i t s c o n t i n g e n t harm. These c o u r t s would hear the case and apply f o r -e i g n law to the assessment o f damages. T h i s , however, r a i s e s the q u e s t i o n as to whether a c o u r t such as i n the U.S. would o r c o u l d a p p l y a f o r e i g n law on damages which the judges d i d not support o r q u i t e p o s s i b l y under-s t a n d . A judge i n a s s e s s i n g damages i s a l l o w e d a wide l a t i t u d e and t h i s would a l l o w d e f e a t o f the r e q u i s i t e c h o i c e o f law. ( i i ) The second o p t i o n i s to make the d o m i c i l e c o u r t the o n l y p o s s i b l e forum. T h i s immediately r a i s e s the o b j e c t i o n o f forum non conveniens f o r one o r both p a r t i e s ; i n the v a s t m a j o r i t y o f cases i t would be the c a r r i e r who i s f o r c e d to defend i n a f o r e i g n c o u r t , the element o f r e s i d e n c e g e n e r a l l y assumes t h a t the p l a i n t i f f w i l l not be i n c o n v e n i e n c e d . On the b a l a n c e , the tendency o f t h i s second o p t i o n to r e q u i r e s u i t i n i n c o n v e n i e n t j u r i s d i c t i o n s i s more than compensated by the p o t e n t i a l o f c r e a t i n g a system which r e -cognizes f u l l c o s t w i t h the g r e a t e s t accuracy and t h e r e f o r e l e a s t c o s t . The U.S. would be i n f u l l agreement as i t would be guaranteed a h e a r i n g i n U.S. c o u r t s and the o t h e r c o u n t r i e s would be r e l i e v e d o f the p r a c t i c e o f forum-shopping which i s a heavy s t r a i n on the scheme o f compensation. CONCLUSION The i s s u e o f passenger l i a b i l i t y o f i n t e r n a t i o n a l a i r c a r r i e r s p r e s e n t s i n microcosm a l l the fundamental problems o f i n t e r n a t i o n a l law as a whole i n c l u d -i n g the q u e s t i o n s o f s o v e r e i g n t y , j u r i s d i c t i o n , t e r r i t o r y , the r e l a t i o n s h i p s between s t a t e s and o t h e r i n t e r n a t i o n a l e n t i t i e s , u n i f i c a t i o n o f p r i v a t e law and the many problems o f c o n f l i c t s o f l a w . 1 I t i s i n t h i s l i g h t t h a t the f o l l o w i n g package i s proposed: (1) A b s o l u t e L i a b i l i t y (2) High L i m i t - a p p r o x i m a t e l y $ 3 0 0 , 0 0 0 . 0 0 (3) Unbreakable - No N o t i c e o r W i l l f u l Misconduct C l a u s e (4) R e s t r i c t e d R i g h t t o Sue (5) C o l l a t e r a l B e n e f i t s Considered (6) C o n t r i b u t o r y Negl igence Clause (7) War R i s k s and Sabotage Covered (8) D o m i c i l e o f P l a i n t i f f i s Required Forum (9) Automatic R e v i s i o n Based on Consumer P r i c e Index The proposal i s not h e l d out as one which i s j u s t to passenger , c a r r i e r o r any one s t a t e . I t i s based on the data r e v e a l e d as the development o f p a s s e n -ger l i a b i l i t y was t r a c e d forward c h r o n o l o g i c a l l y . The o b j e c t was to develop a pragmatic p l a n - one t h a t s t o o d the best chance o f acceptance by the s t a t e s i n -v o l v e d , p a r t i c u l a r l y the U.S. The g u i d i n g p r i n c i p l e was t h a t r e c o g n i t i o n o f c o s t s as p e r c e i v e d by the U.S. must be p l a c e d w i t h i n a framework which w i l l com-pensate those l o s s e s at minimum p o s s i b l e c o s t . Any s o l u t i o n w i l l o f n e c e s s i t y r e q u i r e compromise by each p a r t y on many p o i n t s , many o f them s i g n i f i c a n t - the t e s t which must be a p p l i e d i s t h a t o f the l e a s t - w o r s t a c c e p t a b l e scheme. The q u e s t i o n which must accompany t h i s proposal i s t h a t asked o f each group at the 1966 ICAO meeting i n r e f e r e n c e to the p l a n s then put forward - "Does your d e l e g a t i o n t h i n k t h a t i t i s w i l l i n g to recommend acceptance o f t h i s proposal to i t s government as a scheme which i t c o u l d l i v e w i t h ? " 2 APPENDIX A THE WARSAW CONVENTION The i n s t r u m e n t s i g n e d a t Warsaw i n 1929 c o n t a i n e d many p r o v i s i o n s to implement the b a s i c o b j e c t i v e s o f the c o n f e r e n c e . The Convention s h o u l d be examined not o n l y to understand i t s mechanics but to g a i n an i n s i g h t i n t o the b a s i s o f i n t e r n a t i o n a l a i r c a r r i e r l i a b i l i t y . The document i s e n t i t l e d "A Convention f o r the U n i f i c a t i o n o f C e r t a i n Rules R e l a t i n g t o I n t e r n a t i o n a l T r a n s p o r t a t i o n by A i r " having been drawn by s t a t e s which a c c o r d i n g to the Preamble have "recognized the advantage o f r e g u l a t i n g i n a uni form manner the c o n d i t i o n s o f i n t e r n a t i o n a l t r a n s p o r t a t i o n by a i r i n r e s p e c t o f the documents used f o r such t r a n s p o r t a t i o n and o f the l i a b i l i t y o f the c a r r i e r . " A r t i c l e One - The Convention a p p l i e s to a l l i n t e r n a t i o n a l t r a n s p o r t a t i o n o f p e r -s o n s , baggage and goods performed by an a i r c r a f t f o r h i r e o r g r a t u i t o u s l y by an a i r t r a n s p o r t e n t e r p r i s e . T h i s excludes o n l y g r a t u i t o u s f l i g h t s by p r i v a t e p e r -sons. " I n t e r n a t i o n a l t r a n s p o r t a t i o n " i s d e f i n e d as being any t r a n s p o r t a t i o n i n w h i c h , a c c o r d i n g t o the c o n t r a c t made by the p a r t i e s , the p l a c e o f departure and • the p l a c e o f d e s t i n a t i o n , whether o r not t h e r e i s a break i n the t r a n s p o r t a t i o n , are s i t u a t e d e i t h e r : ( i ) W i t h i n the t e r r i t o r y o f two High C o n t r a c t i n g P a r t i e s (member n a t i o n s ) , o r ( i i ) W i t h i n the t e r r i t o r y o f a s i n g l e High C o n t r a c t i n g P a r t y i f t h e r e i s an agreed s t o p p i n g p l a c e o u t s i d e of t h a t c o u n t r y ' s t e r r i t o r y , even i f t h a t * t e r r i t o r y i s not a p a r t y to the C o n v e n t i o n . An "agreed s t o p p i n g p l a c e " means a p l a c e where a c c o r d i n g to the c o n t r a c t , • the p lane by which the c o n t r a c t i s to be performed w i l l stop i n the course o f *Return, open jaw, and c i r c u l a r r o u t i n g s are regarded as two t r i p s . 1 performing the c a r r i a g e . I t i s not i n f l u e n c e d by the purpose o f the descent o o r the r i g h t s the passenger may have to break h i s j o u r n e y a t t h a t p o i n t . 2 A l l o t h e r t r a n s p o r t a t i o n even i f i n t e r n a t i o n a l i n the usual sense i s not covered by the C o n v e n t i o n . I f t r a n s p o r t a t i o n i s to be performed by s e v e r a l s u c c e s s i v e c a r r i e r s , the Convention t r e a t s i t as one i n d i v i d u a l c a r r i a g e i f i t has been so regarded by the p a r t i e s . T h i s presumption i s made r e g a r d l e s s o f whether the c a r r i a g e has agreed upon under the form o f a s i n g l e o r m u l t i p l e t i c k e t . I f p a r t o f the j o u r n e y i n v o l v e s i n t e r n a t i o n a l f l i g h t , the i n t e r n a t i o n a l c h a r a c t e r and, t h e r e f o r e , the Convention a p p l i e s t o the e n t i r e j o u r n e y . D e s p i t e c l e a r wording i n the Conven-t i o n a U.S. c o u r t has h e l d t h a t t h i s e f f e c t c o u l d be d e f e a t e d by p u r c h a s i n g 3 s e p a r a t e t i c k e t s f o r each l e g o f the j o u r n e y . The e f f e c t of the Convention being a p p l i e d to the domestic l e g i s adverse to the i n t e r e s t s o f Canadian passen¬g e r s . For example, a passenger f l y i n g Calgary-Vancouver on a r e g i o n a l a i r l i n e and Vancouver-Tokyo w i t h CP A i r i s h e l d to l i m i t e d l i a b i l i t y i f i n j u r e d o r k i l l e d on the f l i g h t from C a l g a r y to Vancouver. The Convention would be r e g u l a t i n g the r i g h t s between a Canadian passenger and a Canadian c a r r i e r d u r i n g domestic f l i q h t , c i r c u m s t a n c e s which are not a p p r o p r i a t e f o r the i n t e r v e n t i o n o f an i n t e r n a t i o n a l agreement. A r t i c l e Two - The Convention a p p l i e s to t r a n s p o r t a t i o n by the S t a t e , a l though the country may a t the t ime o f r a t i f i c a t i o n d e c l a r e t h a t t h i s A r t i c l e not apply to t h a t s t a t e . Canada has so e l e c t e d . A r t i c l e Three - The c a r r i e r must d e l i v e r to the passenger a t i c k e t c o n t a i n i n g the f o l l o w i n g d a t a : ( i ) P l a c e and date o f i s s u e ( i i ) P l a c e o f departure and o f d e s t i n a t i o n ( i i i ) Agreed s t o p p i n g p l a c e s , but the c a r r i e r may reserve the r i g h t to a l t e r the s t o p p i n g p l a c e s i n case o f n e c e s s i t y and i f i t does so i t w i l l not have the e f f e c t o f d e p r i v i n g the t r a n s p o r t a t i o n o f i t s i n t e r n a t i o n a l c h a r a c t e r . ( i v ) Name and address o f the c a r r i e r o r c a r r i e r s . (v) A statement t h a t the t r a n s p o r t a t i o n i s s u b j e c t to r u l e s r e l a t i n g to l i a b i l i t y e s t a b l i s h e d by the C o n v e n t i o n . The absence, i r r e g u l a r i t y o r l o s s o f the passenger t i c k e t w i l l not a f f e c t the v a l i d i t y o f the c o n t r a c t and i t w i l l s t i l l be s u b j e c t to the r u l e s o f the C o n v e n t i o n . B u t , i f the c a r r i e r a c c e p t s a passenger w i t h o u t a t i c k e t having been d e l i v e r e d , he i s not e n t i t l e d to a v a i l h i m s e l f o f the p r o v i s i o n i n the Con-v e n t i o n which l i m i t s h i s l i a b i l i t y . T h i s i s seen as a q u i d pro quo f o r the l i m i -t a t i o n . The r o o t s o f the requirement l i e i n the common law o f c o n t r a c t . A c o n t r a c t o f c a r r i a g e i s n o r m a l l y evidenced by the acceptance o f an o f f e r c o n t a i n e d i n the t i c k e t and i t w i l l s e t out i n the document o r by r e f e r e n c e the p r e c i s e terms 4 upon which the passengers are accepted f o r t r a n s p o r t . The r u l e i s t h a t an o f -f e r e e ( the passenger) i s bound by a l l the terms o f an o f f e r but o n l y to the e x t e n t t h a t the terms o f the o f f e r are communicated to him b e f o r e he a c c e p t s the o f f e r . The terms o f the c o n t r a c t must be communicated i n the sense t h a t knowledge o f them i s brought to the n o t i c e o f the o f f e r e e . I f the c o n t a c t i s not s i g n e d , as w i t h a passenger t i c k e t , the c o u r t has to d e c i d e whether the t i c k e t p r o v i d e d i s i n t e n d e d to form an important p a r t o f the c o n t r a c t and then as a q u e s t i o n o f f a c t , whether reasonable steps have been taken to draw the n o t i c e o f the o f f e r e e to the terms o f the o f f e r . The terms o f the l i m i t a t i o n are not s e t out i n f u l l i n the document but there i s an i n d i c a t i o n where the terms can be s e e n . 6 T h i s i s a very c r i t i c a l a r t i c l e i n t h a t i t r e p r e s e n t s one o f the few avenues to escape l i m i t e d l i a b i l i t y . American c o u r t s view the l i m i t as i n e q u i t -able and have s e i z e d on t h i s a r t i c l e , u s i n g i t as a means to c i rcumvent the Convent ion. The l e a d i n g American case on t h i s p o i n t ( L i s i v A l i t a l i a ) 7 h e l d t h a t not o n l y had t h e r e to be d e l i v e r y o f the n o t i c e but i t had to be an e f f e c t i v e n o t i c e . The lower c o u r t judge i n awarding u n l i m i t e d damages to the p l a i n t i f f c r i t i c i z e d the s i z e o f the p r i n t - "Camouflaged i n L i l l i p u t i a n p r i n t i n a t h i c k e t o f c o n d i -t i o n s o f c o n t r a c t Indeed the e x c u l p a t o r y statements on which the defendant g to 10 p o i n t from 4 . 5 p o i n t . T h i s case was l a t e r f o l l o w e d i n Canada. re n e s are v i r t u a l l y i n v i s i b l e . ' A f t e r L i s i the s i z e o f the p r i n t was i n c r e a s e d American c o u r t s have a l s o i n s i s t e d t h a t the d e l i v e r y o f n o t i c e t a k e p l a c e s u f f i c i e n t l y ahead o f f l i g h t t ime to a l l o w the passenger to make a l t e r n a t e p r o -v i s i o n s e . g . purchase f l i g h t i n s u r a n c e o r d e c l i n e passage. In a case where the t i c k e t was d e l i v e r e d a t the f o o t o f the boarding ramp the l i m i t s were h e l d not to a p p l y . Group t r a v e l e i t h e r on a s i n g l e o r m u l t i p l e t i c k e t c r e a t e s s i t u a t i o n s where each passenger does not r e c e i v e i n d i v i d u a l n o t i c e but a t t a c k s on the l i m i t from t h i s angle have not been very s u c c e s s f u l . A r t i c l e Seventeen - The c a r r i e r w i l l be l i a b l e f o r damage s u s t a i n e d i n the event o f the death o r wounding o f a passenger o r any o t h e r b o d i l y i n j u r y s u f f e r e d by a passenger i f the a c c i d e n t which caused the damage took p l a c e on board the a i r -c r a f t o r i n the course o f any o f the o p e r a t i o n s o f embarking o r d i s e m b a r k i n g . T h i s a r t i c l e has t h r e e important a s p e c t s : ( i ) A course o f a c t i o n i s c r e a t e d - A t coirmon law t h e r e was no r i g h t o f a c t i o n f o r wrongful d e a t h . In an e a r l y E n g l i s h c a s e 1 0 a man sued a stagecoach company f o r damages when h i s w i f e was k i l l e d i n an o v e r t u r n i n g s t a g e c o a c h . Lord E l l e n b o r o u g h i n h i s d e c i s i o n s a i d , "In a c i v i l s u i t , the death o f a human being c o u l d not be complained o f as an i n j u r y . " 1 1 The o n l y l o s s e s found recompensable were those which arose p r i o r to d e a t h . Th is p o i n t e d out a g l a r i n g d e f i c i e n c y i n the common law so i n 1846, the E n g l i s h P a r l i a m e n l passed the F a t a l A c c i d e n t s A c t , b e t t e r known as Lord Campbell's A c t which s t a t e d t h a t an a c t i o n c o u l d be m a i n t a i n e d on b e h a l f o f a husband, w i f e , parent o r c h i l d o f a person whose death was caused by a wrongful a c t , f o r l o s s o f economic b e n e f i t s . The a c t was c o p i e d w i d e l y i n the Common Law j u r i s d i c t i o n s i n c l u d i n g Canada and the U . S . , forming the b a s i s o f p r o v i n c i a l and s t a t e wrongful death s t a t u t e s . The C i v i l Law j u r i s d i c t i o n s had a wrongful death a c t i o n w i t h i n t h e i r code, i n Quebec,, i t i s A r t i c l e 1056. However, i n 1929, not a l l n a t i o n s had developed adequate wrongful death s t a t u t e s , o t h e r s had no p r o v i s i o n s a t a l l . T h i s f a c t must be viewed i n l i g h t o f the o p e r a t i o n o f the l e x l o c u s d e l e c t i r u l e which a t t h a t p o i n t i n t ime determined i f the death was a l e g a l i n j u r y compensable i n damages. Thus, i f an a i r p l a n e crashed i n a country which had no wrongful death a c t i o n , the s u r v i v o r s would not be a b l e to b r i n g s u i t i n any c o u r t i n the w o r l d . O b l i g a t i o d i d not a r i s e . The Convention remedied t h i s d e f i c i e n c y by g r a n t i n g a course o f a c t i o n . E n g l i s h and Canadian c o u r t s have i n t e r p r e t e d the phrase " s h a l l be l i a b l e " i n t h i s manner but some American c o u r t s have h e l d t h a t the a r t i c l e o n l y l i m i t s any cause o f a c t i o n a r i s i n g under c h o i c e o f law r u l e s . C i v i l Law c o u r t s t r e a t the a r t i c l e i n another f a s h i o n because o f the b a s i c d i f f e r e n c e s i n the two systems o f law. There i t i s regarded as c r e a t i n g a r u l e o f c o n t r a c t u r a l l i a b i l i t y and r e f e r e n c e i s made to the law o f the c o n t r a c t . 1 3 ( i i ) Embarking and Disembarking - The second a s p e c t o f A r t i c l e 17 i s t h a t the c a r r i e r i s l i a b l e f o r death o r i n j u r y not o n l y i n f l i g h t but a l s o i n the course o f these a n c i l l i a r y o p e r a t i o n s . "The o p e r a t i o n o f embarkation might be s a i d to begin when the passenger reaches the t e r m i n a l o r when he i s summoned by an o f f i c i a l to proceed to customs o r o t h e r a u t h o r i t y p r i o r to departure o r when he i s requested to proceed to the embarkation a r e a o r i n t o the apparatus l e a d i n g to the a i r c r a f t o r when he a c t u a l l y e n t e r s the a i r c r a f t . The o n l y c r i t e r i a i s whether they have reached the s t a t u s o f passengers i n i n t e r n a t i o n a l a i r t r a v e l as d e f i n e d by the Warsaw Conven-t i o n . " ^ The converse r e a s o n i n g may be a p p l i e d to d i s e m b a r k a t i o n - as long as they r e t a i n the c h a r a c t e r o f p a s s e n g e r s , the a i r l i n e i s r e s p o n s i b l e f o r t h e i r s a f e t y . Whi le i n 1929 the d r a f t e r s f e l t t h i s would cover the " s l i p , t r i p and f a l l " c a s e s ; i n the 1970s w i t h the pandemic o f a i r p o r t v i o l e n c e , t h i s p l a c e s a heavy l i a b i l i t y on the a i r l i n e , ( i i i ) A b s o l u t e L i a b i l i t y - The t h i r d aspect i s the c r e a t i o n o f an a b s o l u t e l i a b i -l i t y o f the c a r r i e r f o r the s a f e t y o f the passengers . The a r t i c l e s t a t e s i n p a r t , "the c a r r i e r s h a l l be l i a b l e " - t h i s n o n - n e g l i g e n t l e g a l r e s -p o n s i b i l i t y a r i s e s s i m p l y by the occurance o f i n j u r y . T h i s i s reduced to a presumed l i a b i l i t y by the o p e r a t i o n o f A r t i c l e 20. A r t i c l e Twenty - The c a r r i e r w i l l not be l i a b l e i f he proves t h a t he and h i s agents have taken a l l necessary measures to a v o i d the damage o r t h a t i t was im-p o s s i b l e to take such measures. T h i s reduced the a b s o l u t e l i a b i l i t y o f A r t i c l e 17 to presumed n e g l i g e n c e but i n view o f the d i f f i c u l t y i n v o l v e d i n s a t i s f y i n g t h i s a r t i c l e the q u a l i f i c a t i o n i s not e x t e n s i v e . A r t i c l e Twenty-One - I f the c a r r i e r proves t h a t the damage was caused o r c o n t r i -buted to by the n e g l i g e n c e o f the i n j u r e d p a r t y , the c o u r t may i n accordance w i t h the p r o v i s i o n s o f i t s own l a w , exonerate the c a r r i e r w h o l l y o r p a r t l y from h i s l i a b i l i t y . In 1929, c o n t r i b u t o r y n e g l i g e n c e v a r i e d i n i t s o p e r a t i o n between j u r i s d i c t i o n s from a bar to m i t i g a t i o n o f damages, so the Convention was l o o s e l y worded on t h i s p o i n t to encompass l o c a l p r a c t i c e . A r t i c l e Twenty-Two - The l i a b i l i t y o f the c a r r i e r f o r each passenger i s l i m i t e d to 125,000 French g o l d f r a n c s , which may be awarded i n a lump sum o r p e r i o d i c payments. The f r a n c mentioned i s commonly r e f e r r e d to as the P o i n c a r e f r a n c c o n s i s t i n g o f 65 1/2 mg. o f g o l d at the s t a n d a r d f i n e n e s s o f 900/1000 and may be converted i n t o any n a t i o n a l currency i n round f i g u r e s . The value o f the award i s f i x e d not by the g o l d content but by o f f i c i a l p r i c e s i n the w o r l d monetary market. Valued a t $ 5 , 0 0 0 . 0 0 i n 1929, i t i s worth a p p r o x i m a t e l y $ 1 0 , 0 0 0 . 0 0 today because o f r e v a l u a t i o n s . Th is l i m i t a t i o n i s the c e n t r a l p r o v i s i o n o f the Convention and the f o c a l p o i n t o f c o n t e n t i o n between the p a r t i e s s i n c e 1929. The a r t i c l e a l s o p r o v i d e d t h a t the c a r r i e r and passenger may agree t o a h i g h e r l i m i t . Designed i n 1929 to a l l o w a passenger to pay a premium f o r a d d i -t i o n a l coverage, i t l a t e r p l a y e d a b a s i c r o l e i n the Montreal Agreement o f 1966. A r t i c l e Twenty-Three - Any p r o v i s i o n t e n d i n g to r e l i e v e the c a r r i e r o f l i a b i l i t y o r to f i x a lower l i m i t than t h a t which i s l a i d down i n the Convention w i l l be n u l l and v o i d . A r t i c l e Twenty-Four - In the case o f a s u i t brought f o r death o r i n j u r y , the a c t i o n can o n l y be brought s u b j e c t to the c o n d i t i o n s and l i m i t s s e t out i n the Convent ion. A r t i c l e Twenty-Five - The c a r r i e r w i l l not be e n t i t l e d to a v a i l h i m s e l f o f the p r o v i s i o n s i n the Convention which l i m i t o r exc lude l i a b i l i t y i f the damage was caused by w i l f u l misconduct o r by such d e f a u l t on h i s p a r t which i s c o n s i d e r e d i n accordance w i t h the l e x f o r i to be e q u i v a l e n t to w i l f u l misconduct . T h i s a r t i c l e was i n c l u d e d because o f the s t r o n g f e e l i n g , p a r t i c u l a r l y i n c i v i l law* c o u n t r i e s t h a t one must not be a b l e to l i m i t h i s l i a b i l i t y f o r i n t e n t i o n a l l y i n f l i c t e d harm. The term used i n the o f f i c i a l t e x t , i n F r e n c h , was d p i which was t r a n s -l a t e d i n t o the common law concept o f " w i l f u l misconduct". I t occurs when (a) the a c t o r knew t h a t he was a c t i n g w r o n g f u l l y o r w r o n g f u l l y o m i t t i n g to a c t r e g a r d l e s s o f the consequences, o r (b) the a c t o r a c t e d o r o m i t t e d to a c t w i t h r e c k l e s s i n d i f f e r e n c e as to what the r e s u l t might be. The element o f i n t e n t s h o u l d be noted i n ( a ) . 1 5 The a r t i c l e extends t o - c o v e r damage caused by any agent o f the c a r r i e r a c t i n g w i t h i n the scope o f h i s employment. Th is i s i n accordance w i t h the c o n -cept o f v i c a r i o u s l i a b i l i t y , imposed by law upon a p r i n c i p a l ( c a r r i e r ) as a r e -s u l t o f : ( i ) A t o r t i o u s a c t o r o m i s s i o n by the agent ( e . g . p i l o t ) ( i i ) A r e l a t i o n s h i p between the a c t u a l t o r t f e a s o r and the p r i n c i p a l , and ( i i i ) Some c o n n e c t i o n between the t o r t i o u s a c t o r o m i s s i o n and t h a t r e l a t i o n s h i p . In the p e r i o d a f t e r 1929, the terms do]_ and " w i l f u l misconduct" r e c e i v e d very uneven t reatment i n the c o u r t s o f the member n a t i o n s . R e p r e s e n t i n g one o f the few means to escape the l i m i t a t i o n , the concept was i n t r o d u c e d f r e q u e n t l y by p l a i n t i f f s . A s s e s s i n g f a u l t o f t h i s nature i s very s u b j e c t i v e and can be b i a s e d by j u d i c i a l d i s t a s t e f o r the l i m i t a t i o n . The l i m i t was r e g u l a r l y broken by p l a i n -t i f f s who a l l e g e d w i l f u l misconduct before American c o u r t s . A r t i c l e Twenty-Eight - An a c t i o n f o r damages must be brought , a t the o p t i o n of the p l a i n t i f f , i n the t e r r i t o r y o f one o f the High C o n t r a c t i n g P a r t i e s , e i t h e r b e f o r e : ( i ) The c o u r t o f the d o m i c i l e o f the p l a i n t i f f . * ( i i ) The c o u r t o f the c a r r i e r ' s p r i n c i p a l place of b u s i n e s s . ( i i i ) The c o u r t o f the p l a c e o f business through which the c o n t r a c t was made, o r * The o f f i c i a l t e x t i n F r e n c h , used the word d o m i c i l e . The Americans t r a n s l a t e d i t as " d o m i c i l e " w h i l e the E n g l i s h changed i t to "place o f o r d i n a r y r e s i d e n c e " which i s a broader and more c o r r e c t t r a n s l a t i o n . ( i v ) The c o u r t at the p l a c e o f d e s t i n a t i o n . Th is a r t i c l e p r e c l u d e d some f o r a t h a t might o t h e r w i s e have been a v a i l a b l e to the p l a i n t i f f , the most obvious one being the d o m i c i l e o f the p l a i n t i f f i f the c o u r t can e x e r c i s e j u r i s d i c t i o n over the c a r r i e r . A r t i c l e Twenty-Nine - The r i g h t to damages w i l l be e x t i n g u i s h e d i f an a c t i o n i s not brought w i t h i n two years from the date o f the a c c i d e n t . T h i s i s s i m i l a r to o t h e r F a t a l A c c i d e n t s A c t s which have a t e r m i n a t i o n date on the r i g h t c r e a t e d . A r t i c l e T h i r t y - In the case o f t r a n s p o r t a t i o n to be performed by s u c c e s s i v e " c a r r i e r s each c a r r i e r who accepts the passenger w i l l be s u b j e c t to the r u l e s s e t out i n the Convention and i s deemed by the i n s t r u m e n t to be one o f the c o n t r a c t i n g p a r t i e s i n s o f a r as the c o n t r a c t deals w i t h t h a t p a r t o f the t r a n s p o r t a t i o n which i s performed by t h a t c a r r i e r . The r i g h t o f a c t i o n i n a case l i k e t h i s l i e d o n l y a g a i n s t the c a r r i e r who performed the t r a n s p o r t a t i o n d u r i n g which the i n c i d e n t o c c u r r e d except i n the case where the f i r s t c a r r i e r has by express agreement a s -sumed l i a b i l i t y f o r the e n t i r e j o u r n e y . Th is p r o v i s i o n was c l a r i f i e d and extended by an amendment to the Convention s igned a t G u a d a l a j a r a i n 1961 which d e a l t w i t h " c e r t a i n r u l e s r e l a t i n g to i n t e r n a t i o n a l c a r r i a g e by a i r performed by persons o t h e r than the c o n t r a c t i n g c a r r i e r " . I t a p p l i e d the Warsaw Convention to the h i r e , c h a r t e r and i n t e r c h a n g e o f a i r c r a f t . A r t i c l e T h i r t y - O n e - In the case o f combined t r a n s p o r t a t i o n performed p a r t l y by a i r and p a r t l y by any o t h e r mode o f t r a n s p o r t , the p r o v i s i o n s o f the Convention apply o n l y to vthe a i r segment. A r t i c l e T h i r t y - S e v e n - The Convention may be r a t i f i e d by s t a t e s w i s h i n g to become High C o n t r a c t i n g P a r t i e s by d e p o s i t i n g an i n s t r u m e n t o f r a t i f i c a t i o n w i t h the M i n i s t r y o f F o r e i g n A f f a i r s i n P o l a n d . A r t i c l e T h i r t y - N i n e - Any o f the High C o n t r a c t i n g P a r t i e s may denounce the Con-v e n t i o n by a n o t i c e sent to the P o l i s h government which w i l l become e f f e c t i v e i n s i x months. The a r t i c l e s not d e a l t w i t h here r e l a t e f o r the most p a r t to t r a n s p o r t a -t i o n o f baggage and f r e i g h t which are a l s o s u b j e c t to l i m i t e d l i a b i l i t y . The Warsaw Convention i s i n f o r c e i n Canada by v i r t u e o f The C a r r i a g e by A i r A c t 3 Geo. VI 1939 C.12 and by v i r t u e o f a p r o c l a m a t i o n o f the G o v e r n o r - i n -C o u n c i l , dated June 1 3 t h , 1947 and January 3 0 t h , 1948; d e c l a r i n g the A c t i n f o r c e on J u l y 1 s t , 1947 and the Convention i n f o r c e on September 8 t h , 1947. The Canadian government had delayed u n t i l 1947 because u n t i l then Trans-Canada A i r -l i n e s was e s s e n t i a l l y a domestic c a r r i e r and c o u l d not b e n e f i t from i t s p r o v i s i o n s Over 100 n a t i o n s have r a t i f i e d the C o n v e n t i o n . Those not having done so i n c l u d e A l b a n i a , A f g h a n i s t a n , B o l i v i a , C h i l e , Costa R i c a , the Dominican R e p u b l i c , Ecuador, I r a n , I r a q , N i c a r a g u a , Panama, Paraguay, P e r u , Saudi A r a b i a , South K o r e a , T h a i l a n d , Turkey, Yemen and Uruguay. THE HAGUE PROTOCOL The i n s t r u m e n t s i g n e d a t the Hague was t i t l e d "A P r o t o c o l to Amend the Convention f o r the U n i f i c a t i o n o f C e r t a i n Rules R e l a t i n g to I n t e r n a t i o n a l C a r r i a g e by A i r , Signed a t Warsaw on October 1 2 t h , 1929". There was no agreement on the nature and scope o f the amendments which s h o u l d be made o r even the neces-s i t y o f amending at a l l , so the amendment was done by way o f p r o t o c o l so t h a t the Convention would c o n t i n u e i n those s t a t e s which d i d not a c c e p t the P r o t o c o l . To implement the changes, the P r o t o c o l c o n t a i n e d the f o l l o w i n g p r o v i s i o n s : A r t i c l e Three - The ICAO Legal Committee had f o s t e r e d the Conference not o n l y to d i s c u s s l i m i t r e v i s i o n but to r e - d e f i n e c e r t a i n terms and reduce the d e t a i l r e q u i r e d i n t i c k e t s thereby r e d u c i n g the p o s s i b i l i t y o f the l i m i t being broken. The t i c k e t now r e q u i r e d : ( i ) An i n d i c a t i o n o f the p l a c e s o f departure and d e s t i n a t i o n ( i i ) I f these p o i n t s are i n the same High C o n t r a c t i n g P a r t y ' s t e r r i t o r y , one . o r more agreed s t o p p i n g p l a c e s o u t s i d e t h a t t e r r i t o r y ( i i i ) A n o t i c e to the e f f e c t t h a t i f the passenger's journey i n v o l v e s an u l t i -mate stop i n a country o t h e r than t h a t o f departure the Warsaw Convention may be a p p l i c a b l e and t h a t the Convention governs and i n most cases l i m i t s l i a b i l i t y o f the c a r r i e r f o r death o r personal i n j u r y . I f the c a r r i e r consents to a passenger embarking w i t h o u t a t i c k e t having been d e l i v e r e d c o n t a i n i n g the n o t i c e r e q u i r e d , the c a r r i e r cannot a v a i l h i m s e l f o f the l i m i t i n g p r o v i s i o n s . The Rio de J a n e i r o meeting d i s c u s s e d the p o s s i b i l i t y o f having the t i c k e t warn t h a t the Convention d i d . apply and have i t i n s e r t e d o n l y i n Warsaw t i c k e t s . However, s e v e r a l c o u r t cases l a s t i n g l o n g p e r i o d s o f t ime had been concerned s o l e l y w i t h the q u e s t i o n o f whether o r not a s p e c i f i c journey was Warsaw f l i g h t . Under these c o n d i t i o n s a t i c k e t agent c o u l d not be presumed to make a c o r r e c t d e c i s i o n i n a m a t t e r o f seconds. Computer t i c k e t i n g holds the p o s s i b i l i t y o f each t i c k e t having Warsaw a p p l i c a b i l i t y determined f o r i t a u t o m a t i c a l l y and a n o t i c e a t t a c h e d s t a t i n g Warsaw d i d a p p l y . A r t i c l e Eleven - The d e l e t e d A r t i c l e 22 o f the Warsaw Convention was r e p l a c e d by "The l i a b i l i t y o f the c a r r i e r f o r each passenger i s l i m i t e d to the sum o f $250,000 f r a n c s . " A r t i c l e T h i r t e e n - As a q u i d pro quo f o r r a i s e d l i m i t s , the a i r l i n e s r e c e i v e d a p a r t i a l r e p r i e v e from the " w i l f u l misconduct" p r o v i s i o n . Two approaches were open to the c o n f e r e n c e : ( i ) To t i g h t e n the d e f i n i t i o n o f " w i l f u l misconduct", o r ( i i ) To put an upper l i m i t on recovery ( e . g . two t imes the l i m i t ) . The d e l e g a t e s chose ( i ) , d e l e t i n g the French term d o i and r e p l a c i n g i t w i t h the Anglo-Saxan concept o f " w i l f u l misconduct". The wording o f the c l a u s e came from the charge to the j u r y i n the Jane Froman case where the p l a i n t i f f u n s u c c e s s f u l l y p leaded m i s c o n d u c t . I t read i n p a r t , "that damage r e s u l t e d from an a c t o r omis-s i o n o f the c a r r i e r , h i s s e r v a n t s , o r agents done w i t h i n t e n t to cause damage o r r e c k l e s s l y and w i t h knowledge t h a t damage would p r o b a b l y r e s u l t " . The 1953 Rio de J a n e i r o d r a f t excluded " r e c k l e s s l y " l e a v i n g o n l y i n t e n t i o n a l a c t s but t h i s very narrow d e f i n i t i o n was e x c l u d e d . T h i s d e f i n i t i o n , however, was used i n the 1952 Rome Convention on I n j u r y to T h i r d P a r t i e s and S u r f a c e Damage. The " w i l f u l misconduct" c l a u s e had r e c e i v e d a very uneven a p p l i c a t i o n i n the c o u r t s o f member s t a t e s and i t was a n t i c i p a t e d t h a t a r e d e f i n i t i o n o f c i r c u m -stances where the l i m i t was broken would remedy t h i s . A r t i c l e Fourteen - I f an a c t i o n i s brought a g a i n s t a s e r v a n t o r agent o f the c a r r i e r , out o f damage to which the Convention a p p l i e s , such s e r v a n t o r agent , i f he proved he a c t e d w i t h i n the scope o f h i s employment w i l l be e n t i t l e d to a v a i l h i m s e l f o f the l i m i t on l i a b i l i t y which the c a r r i e r i s e n t i t l e d to i n v o k e . Common law had always a l l o w e d a s e r v a n t o r agent o f a c a r r i e r to use the p r o t e c -t i o n o f l i m i t e d l i a b i l i t y which the c a r r i e r had by v i r t u e o f a c o n t r a c t o f c a r -r i a g e d e s p i t e l a c k o f p r i v i t y . 1 By p r o v i d i n g t h a t the aggregate o f amounts r e c o v e r a b l e from the c a r r i e r and h i s s e r v a n t o r agent w i l l not exceed the l i m i t s , a s e r i o u s l o o p h o l e i n the Warsaw Convention was remedied. By s u i n g the employees o f the c a r r i e r , a p l a i n -t i f f c o u l d r e c o v e r a judgment above the l i m i t and the employee would be "saved harmless" by the c a r r i e r under the terms o f the c o n t r a c t o f employment, i n e f f e c t e x t r a c t i n g u n l i m i t e d judgments from the c a r r i e r . S u i t o f the employee was a r e v e r s a l o f the concept o f respondeat s u p e r i o r and the "deep-pocket" theory o f defendant s e l e c t i o n . A r t i c l e E ighteen - The amended Convention w i l l apply to i n t e r n a t i o n a l c a r r i a g e as d e f i n e d i n the unamended text p r o v i d e d t h a t the p l a c e s o f departure and des-t i n a t i o n are s i t u a t e d e i t h e r : ( i ) In the t e r r i t o r i e s o f two p a r t i e s to the P r o t o c o l , o r ( i i ) W i t h i n the t e r r i t o r y o f a s i n g l e p a r t y t o the P r o t o c o l w i t h an agreed s t o p p i n g p l a c e w i t h i n the t e r r i t o r y o f another s t a t e . In the case o f f l i g h t between two c o u n t r i e s where both are p a r t i e s t o the Warsaw Convention and o n l y one i s a p a r t y to the P r o t o c o l ( e . g . A u s t r i a - C a n a d a ) , the unamended Convention a p p l i e s w i t h i t s lower l i m i t . A r t i c l e Nineteen - The Convention and the P r o t o c o l as between p a r t i e s t o the P r o -t o c o l w i l l be read and i n t e r p r e t e d t o g e t h e r as one i n s t r u m e n t , known as the Warsaw Convention as amended a t the Hague, 1955. A r t i c l e Twenty-Two - The l i m i t s p r e s c r i b e d by t h i s P r o t o c o l w i l l not prevent the c o u r t from a w a r d i n g , i n accordance w i t h i t s own l a w , i n a d d i t i o n the whole o r p a r t o f the c o u r t c o s t s i n c u r r e d by the l i t i g a t i o n . T h i s does not apply i f the amount o f damages awarded e x c l u d i n g . c o u r t c o s t s and o t h e r expenses o f the l i t i -g a t i o n does not exceed the sum which the c a r r i e r has o f f e r e d i n w r i t i n g to the p l a i n t i f f w i t h i n a p e r i o d o f s i x months from the date o f the occurance c a u s i n g the damage o r before the commencement o f the a c t i o n i f t h a t i s the l a t e r . The Hague P r o t o c o l i s i n f o r c e i n Canada by v i r t u e o f An A c t to Amend the C a r r i a g e by A i r A c t 12 E l i z . II S . C . 1963 C.33 and by a p r o c l a m a t i o n by the G o v e r n o r - i n - C o u n c i l i s s u e d pursuant t h e r e t o d e c l a r i n g the e f f e c t i v e date as J u l y 1 8 t h , 1964. THE MONTREAL AGREEMENT E n t i t l e d "An agreement r e l a t i n g to l i a b i l i t y l i m i t a t i o n s o f the Warsaw Convention and the Hague P r o t o c o l " , the inst rument was an agreement s i g n e d by the c a r r i e r s and an o r d e r o f the CAB (#18900) p r o s p e c t i v e l y a c c e p t i n g the terms. The c a r r i e r s agreed t o : ( i ) Include the s p e c i f i e d terms i n i t s c o n d i t i o n s o f c a r r i a g e , i n c l u d i n g t a r -i f f s f i l e d by the c a r r i e r w i t h any government body which must now a l s o be f i l e d w i t h the CAB. ( i i ) Apply the r e v i s e d terms to a l l f l i g h t s w i t h a p o i n t o f U.S. c o n t a c t . ( i i i ) Not withdraw the f i l e d t a r i f f s f o r a p e r i o d o f one y e a r f o l l o w i n g n o t i c e to the CAB t h a t they are to be withdrawn. ( i v ) Not a v a i l i t s e l f o f the defence under A r t i c l e 20 (1) w i t h r e s p e c t to any c l a i m a r i s i n g out o f death o r i n j u r y to a passenger below the $ 7 5 , 0 0 0 . 0 0 l i m i t . S i n c e the l i m i t s are i n a p p l i c a b l e i n the case o f w i l f u l m i s c o n d u c t , t h i s g i v e s a t w o - l e v e l r e c o v e r y / l i a b i l i t y scheme: (a) automat ic but l i m i t e d compensation to a l l v i c t i m s . (b) u n l i m i t e d compensation f o r those who can e s t a b l i s h an aggravated f a u l t ( w i l f u l misconduct) b a s i s f o r recovery . (v) The defences o f c o n t r i b u t o r y n e g l i g e n c e and sabotage remain. ( v i ) P r o v i d e r e q u i s i t e n o t i c e to passengers o f the a p p l i c a b i l i t y o f the new regime i n a t l e a s t 10 p o i n t type e i t h e r on the t i c k e t envelope o r a s e p a r -ate p i e c e o f paper g iven to the passenger which n o t i f i e s him o f the l i m i t s and informs him t h a t s e p a r a t e i n s u r a n c e may be purchased which w i l l s u p p l e -ment the l i m i t i n case o f a c c i d e n t . Throughout the n e g o t i a t i o n s the U.S. d i d not reveal i f t h e i r $ 7 5 , 0 0 0 . 0 0 demand was i n c l u s i v e o r e x c l u s i v e o f c o s t s . T h e i r l a s t minute statement t h a t i t was i n c l u s i v e i s an i n d i c a t i o n t h a t the U.S. was and i s w i l l i n g t o compromise to ensure an agreement. The 58/75 o p t i o n i s s a t i s f a c t o r y i n t h a t i t matches the l i m i t to n a t i o n a l c o u r t procedures but the $ 5 8 , 0 0 0 . 0 0 f i g u r e a p p l i e s to most s t a t e s i n c l u d i n g Canada. Again the l i m i t f o r the U.S. c o u r t s i s $ 7 5 , 0 0 0 . 0 0 but f o r o t h e r n a t i o n s i t i s $ 5 8 , 0 0 0 . 0 0 p l u s c o s t s t h a t would r a r e l y reach $ 1 7 , 0 0 0 . 0 0 . S i n c e Canada awards s e p a r a t e c o s t s , a p l a i n t i f f s h o u l d sue i f p o s s i b l e i n Canada i f he expected c o s t s to exceed $ 1 7 , 0 0 0 . 0 0 i n the U.S. F O O T N O T E S  CHAPTER TWO ] G a l e r v Wings L t d . (1938) 3 WWR 481 2 , . P a r k i n s o n v L i v s r p o o l Corp. (1952) AC 316 3 Nysted v Wings L t d . (1942) 3 DLR 336 ^Seabrooke, A i r Law, 1964, p. 77 5 B l a c k , B l a c k ' s Law D i c t i o n a r y , 1968, p. 1185 ICAO, Document 8839 - LC/158 - 1 + 2 , 1969, p. 51 Rosevear, "Future o f the Warsaw Convent ion", 14 M c G i l l Law J o u r n a l 1 6 1 , 1968, n. 1 fiQ p B S e a b r o o k e , Supra Note 4 , p. 75 9 n r- , Rosevear, Supra Note 7, p. 172 l 0 I b i d , p. 172 1 1 1 b i d , p. 173 12 ' ^ I b i d , p. 172 ] K e e n a n , Shawcross and Beaumont on A i r Law, 1966, p. 27 2 S e a b r o o k e , A 1 r L » . 1 9 M > p. 1 0 3 W n f e l d , The L i a b i l i t y of the C a r r i e r f o r A c c i d e n t s i n I n t e r n a t i o n a l F l i g h t - The Warsaw C o n v e n t i o n , 1972, p. 36 4 D r i o n , L i m i t a t i o n o f L i a b i l i t i e s i n I n t e r n a t i o n a l A i r Law, 1954, p. 16 5 Herndon v Gregory (1935) Sup. C t . o f Ark . 190 A r k . 702 L o w e n f e l d , Supra Note 3 , p. 97 ^Seabrooke, Supra Note 2 , p. 100 o Keenan, Supra Note 1, p. 89 q y S e d a n , "A Proposal to Make the Lex D o m i c i l i i the Requi red Choice o f Law Under A r t i c l e 28 o f the Warsaw Convent ion", 9 W i l l i a m and Mary Law Review 1118, 1968, p. 1130 1 0 L u d d i t t v G i n g e r Coote Airways L t d . (1942) SCR 406 ] 1 I r w i n , "Passenger L i a b i l i t y L i m i t s i n I n t e r n a t i o n a l and Domestic A i r C a r r i a g e " , 1962 Canadian Bar Papers 1 6 , p. 17 1 2 B l a c k , B l a c k ' s Law D i c t i o n a r y , 1968, p. 246 M i l d r e d , " A i r C a r r i e r L i a b i l i t y - S i g n i f i c a n c e o f the Warsaw Convention and Events Leading up to the Montreal Agreement", 33 J o u r n a l o f A i r , Law, and Commerce 5 2 1 , 1967, p. 523 2 S e a b r o o k e , A i r Law, 1964, p. 74 3 a n d ^ n m ^ C ° n V e n t i ° n " ' 3 1 ° ° U r n a 1 ° f A 1 r » U W ' ana commerce CM \ , iyoo, p. cvo 4 T u 1 1 e r v KLM 292 F2d775 DC C i r . C t . 1961 5Benham v Gambling 1941 AC 258 6 A i r Z l n d a l t h e Notlc"J^DeXl"^ 4 Canadian Yearbook o f I n t e r n a t o n a l Law 1 9 ^ 1 % 7 C a l k i n s , " H i k i n g the L i m i t s o f L i a b i l i t y a t the Hague", Proceedings o f the American S o c i e t y o f I n t e r n a t i o n a l Law 120, 1962, p. 123 8 I b i d , p. 121 Rosevesr*, Future o f the W 3 r ssw Convention ) 14 M c G i l l L3W Journ91 161 $ 196 8 j D . 163 Werner v B r i t i s h Commonwealth P a c i f i c A i r l i n e s L t d . 219 F. Supp. 289 SDNY T963 ~ v 2 L i s i v A l i t a l i a L i n e e Aeree I t a l i a n n e (1962) S53 F. Supp. 237 3 Whitehead, " S t i l l Another View o f the Warsaw Convent ion", 33 J o u r n a l o f A i r , Law, and Commerce 6 5 1 , 1967, p. 652 4 L o w e n f e l d , L i a b i l i t y o f C a r r i e r s f o r A c c i d e n t s i n I n t e r n a t i o n a l F l i q h t - The Warsaw C o n v e n t i o n , 1572, p. 88 5 I b i d , p. 88 6 S a n d , " A i r C a r r i e r s L i m i t a t i o n o f L i a b i l i t y and A i r Passenger A c c i d e n t Compensa-t i o n under the Warsaw C o n v e n t i o n " , 28 J o u r n a l o f A i r , Law and Commerce 260 1961 p. 269 7 R o s e v e a r , "Future o f the Warsaw Convent ion", 14 M c G i l l Law J o u r n a l 1 6 1 , 1968, p. 166 Q L o w e n f e l d , Supra Note 4 , p. 116 g K i l b e r g v Northeast A i r l i n e s L t d . 9 NY 2d 34 1 0 Sedam "A Proposal to Make Lex D o m i c i l i i the Required Choice o f Law under A r t i c l e 28 o f the Warsaw Convent ion", 9 W i l l i a m and Mary Law Review 1118, 1968, p. 1128 ] 1 L o w e n f e l d and Mendelsohn, "United S t a t e s and the Warsaw Convent ion", 80 Harvard Law Review 4 9 7 , 1967, p. 579 1 2 C h a p 1 i n v Boys 1969 2AER 1085 ^Tramontana v S . A . Empress de Vicao Aereo Rio Graudence n o . 1 4 L a w #4221/63 1 5 Z e r k a v Lau Goma Airways L t d . 1960 OWN 166 1 6 F o s b r o o k e - Hobbes A i r w o r k s L t d . (1937) i n Seabrooke, A i r Law, 1964, p. 9 1 7 G a l e r v Wings L t d 1938 3WWR 38 ^ a n T c o ^ ^ Convent ion", 31 J o u r n a l of A i r , Law, 1 9 K e i n e r "The 1966 C a r r i e r Agreement - U n i t e d S t a t e s R e t a i n s the Warsaw Conven-t i o n , 7 V i r g i n i a J o u r n a l o f I n t e r n a t i o n a l Law 1 4 0 , 1966, p. 150 20 'Swart, "Prospects o f Amendment o f the Warsaw Convent ion", 33 J o u r n a l o f A i r , Law, and Commerce 6 1 6 , 1967, p. 617 21 T e i n e r , Supra Note 1 9 , p. 149 H i l d r e d , " A i r C a r r i e r L i a b i l i t y - S i g n i f i c a n c e o f the Warsaw Convention and Events Leading up to the Montreal Agreement", 33 J o u r n a l o f A i r , Law, and Commerce S 2 1 , 1967, p. 524 2 L o w e n f e l d and Mendelsohn, "United S t a t e s and the Warsaw Convent ion", 80 Har-vard Law Review 4 9 7 , 1967, p. 564 3 I C A 0 , Subcommittee on the Quest ion o f the R e v i s i o n o f the Warsaw Convention  as Amended by the Hague P r o t o c o l , 1969, p. 278 4 U . S . Dept. o f S t a t e , "The Warsaw Convention - Recent Developments and the Withdrawal o f the U.S. D e n u n c i a t i o n " , 32 J o u r n a l o f A i r , Law, and Commerce 2 4 3 , 1966, p. 246 5 M e n d e l s o h n , "A C o n f l i c t o f Laws Approach to the Warsaw C o n v e n t i o n " , 33 J o u r n a l of A i r , Law and Commerce 6 2 4 , 1967, p. 624 ^ o w e n f e l d and Mendelsohn, "United S t a t e s and the Warsaw Convent ion", 80 Har-vard Law Review 497, 1967, p. 558 2 P r i o n , L i m i t a t i o n o f L i a b i l i t i e s in I n t e r n a t i o n a l A i r Law, 1954, p. 8 ^ F i t z g e r a l d , "Current Developments in the R e v i s i o n o f Rules Governing the L i a b i l i t y o f the A i r C a r r i e r in Respect o f the I n t e r n a t i o n a l C a r r i a g e o f Passengers by A i r " , 6 Canadian Yearbook o f I n t e r n a t i o n a l Law 188, 1968, p. 194 4 S t e p h e n , " C a r r i e r Legal R e s p o n s i b i l i t y f o r Commercial A i r S a f e t y " , 34 J o u r n a l o f A i r , Law and Commerce 4 7 3 , 1968, p. 481 5 D r i o n , Supra Note 2 , p. 12 Stephen, "Montreal Conference and I n t e r n a t i o n a l A v i a t i o n L i a b i l i t y L i m i t a t i o n s " , 33 J o u r n a l o f A i r , Law and Commerce 5 5 4 , 1967, p. 586 7 F i t z g e r a l d , Supra Note 3 , p. 196 ICAO, Subcommittee o f the Legal Committee on the Quest ion o f the R e v i s i o n o f  the Warsaw Convention as Amended by the Hague P r o t o c o l , 1969, p. 125 ] E 1 D i n , A v i a t i o n Insurance P r a c t i c e . Law and R e i n s u r a n c e . 1 9 7 1 , p. 27 2 ^ i n n ^ ^ a T J PS."/f^ Snr«J12dr.1 n«In a?i25a l A v ; ^ i o n ^ L i a b i l i t y L i m i t a t i o n s " , J J J o u r n a l o f A i r , Law and Commerce 554, 1967, p. 586 3 D ^El D i n , Supra Note 1, p. 17 D r i o n , L i m i t a t i o n o f L i a b i l i t i e s i n I n t e r n a t i o n a l A i r Law. 1954, p. 18 4 r ° I C A 0 , Subcommittee o f the Legal Committee on the Quest ion o f the R e v i s i o n o f  the Warsaw Convention as Amended by the Hague P r o t o c o l . 1969, p. 51 c ° K r e i n d l e r , " L i m i t a t i o n s on L i a b i l i t y i n A i r c r a f t Crash C a s e s ; Some R e f l e c t i o n s on A v i a t i o n L i t i g a t i o n Trends and I n e q u a l i t y " , 36 J o u r n a l o f A i r , Law and Commerce 4 6 7 , 1970, p. 469 7 S w a r t , "Prospects o f Amendment o f the Warsaw Convent ion", 33 J o u r n a l o f A i r , Law and Commerce 6 1 6 , 1967, p. 617 8 , El D m , Supra Note 1, p. 23 g El D i n , Supra Note 1, p. 8 1 0 S a n d , " A i r C a r r i e r s L i m i t a t i o n o f L i a b i l i t y and A i r Passenger A c c i d e n t Compen-s a t i o n Under the Warsaw Convent ion", 28 J o u r n a l o f A i r , Law and Commerce 2 6 0 , 1 9 6 1 , p. 272 1 ] I C A 0 , Supra Note 5 , p. 51 1 2 I C A 0 , Supra Note 5 , p. 52 13 J I C A 0 , Supra Note 5 , p. 161 1 4 L o w e n f e l d , L i a b i l i t y o f C a r r i e r s f o r A c c i d e n t s i n I n t e r n a t i o n a l F l i g h t  The Warsaw C o n v e n t i o n , 1972, p. 45 1 5 I C A 0 , Supra Note 5 , p. 46 1 6 I C A 0 , Supra Note 5 , p. 47 1 7 I C A 0 , Supra Note 5 , p. 43 18 a I C A 0 , Supra Note 5 , p. 175 l o w e n f e l d and Mendelsohn, "United S t a t e s and the Warsaw Convent ion", 80 Har-vard Law Review 497, 1967, p. 569 2 I C A 0 , Document 8839 - LC/158 - 1 + 2 , 1969, p. 116 3 I b i d , p. 112 4 I b i d , p. 178 5 I b i d , p. 249 ] M a n k i e w i c z 5 " A i r T r a n s p o r t L i a b i l i t y " , 3 J o u r n a l o f World Trade Law 3 2 , 1969, p. 37 2, . „ R e i n e r , "The 966 C a r r i e r Agreement - U n i t e d S t a t e s R e t a i n s the Warsaw Conven-t i o n " , 7 V i r g i n i a J o u r n a l o f I n t e r n a t i o n a l Law 1 4 0 , 1966, p. 150 W n f e l d and Mendelsohn, "United S t a t e s and the Warsaw Convent ion", 80 Har-vard Law Review 4 9 7 , 1967, p. 567 Commerce 4 6 7 , 1970, p. 467 b K a n e , "Montreal Conference and I n t e r n a t i o n a l A v i a t i o n L i a b i l i t y L i m i t a t i o n s " , 33 J o u r n a l o f A i r , Law and Commerce 4 6 7 , 1967, p. 584 6 I C A 0 , Document No. 8839 - LC/158 - 1 + 2 , 1969, p. 91 S t e p h e n , "Montreal Conference and I n t e r n a t i o n a l A v i a t i o n L i a b i l i t y L i m i t a t i o n s " , 33 J o u r n a l o f A i r , L a w and Commerce 554, 1967, p. 574 o lowenfeld and Mendelsohn, Supra Note 3 , p. 566 q y Sedam, "A Proposal to Make Lex D o m i c i l i i the Required Choice o f Law under A r t i c l e 28 o f the Warsaw Convent ion", 9 W i l l i a m and Mary Law Review 1118, 1968, p. 1127 1 0 K e n n e 1 1 y , The T r i a l Lawyers' G u i d e , 1969, p. 66 1 ^ S t e p h e n , Supra Note 7, p. 586 1 2 S e d a m , Supra Note 9 , p. 1129 1 3 S t e p h e n , Supra Note 7, p. 575 CHAPTER TEN (Continued) M a n k i e w i c z , Supra Note 1, p. 36 1 6 H i l d r e d , " A i r C a r r i e r L i a b i l i t y - S i g n i f i c a n c e o f the Warsaw Convention and the Events Leading up to the Montreal Agreement", 33 Journal o f A i r , Law and Commerce 5 2 1 , 1967, p. 524 1 Stephen, Supra Note 7, p. 570 hcAO, Document No. 8839 - LC/158 - 1 + 2 , 1969, p. 149 2 Wr^ TATrlM^ L i a b i H t y L i m i t a t i o n s " , 3 I C A 0 , Supra Note 1, p. 163 4 M a r t i n , "New F r o n t i e r s of A i r Law", 19 E x t e r n a l A f f a i r s 5 2 1 , 1967, p. 522 5 K e n n e l l y , The T r i a l Lawyers' G u i d e , 1967, p. 62 6 L o w e n f e l d , L i a b i l i t y o f C a r r i e r s f o r A c c i d e n t s i n I n t e r n a t i o n a l F l i g h t - The  Warsaw C o n v e n t i o n , 1972, p. 141 7 I C A 0 , Supra Note 1, p. 179 Q T i t z g e r a l d , "Guatemala C i t y P r o t o c o l to Amend the Warsaw Convent ion", 9 Canadian Yearbook o f I n t e r n a t i o n a l Law 217, 1971, p. 226 9 I b i d , p. 227. hcAO, Document No. 8839 - LC/158 - 1 + 2 , 1969, p. 22 2 I b i d , p. 27 3 ^ " . ^ R p ^ p w ^ q ? 1 S n h ^ 7 n U n i t e d S t a t 6 S C 0 n V e n t l 0 n " ' 8 0 H a r " vard Law Review 4y/. p. b/U 4 K r e i n d l e r , A v i a t i o n A c c i d e n t Law, 1971, p. 249 5 H o l 1 e r i c h v Boeing 63 - C - 20360 C i r . C t . , Cook C i t y , 111. natiora^Lll^'IgV^^^?^5^ C ° n V e n t i 0 n " ' 8 C a n a d i a n Yearbook o f I n t e r -7 I C A 0 , Supra Note 1, p. 141 H i l d r e d , " A i r C a r r i e r L i a b i l i t y - S i g n i f i c a n c e o f Warsaw Convention and Events Leading up to the Montreal Agreement", 1967, 33 J o u r n a l o f A i r , Law and Commerce 5 2 1 , p. 525 2 F i t z g e r a l d , " L i a b i l i t y Rules i n the I n t e r n a t i o n a l C a r r i a g e o f Passengers by A i r and the N o t i c e o f D e n u n c i a t i o n o f the Warsaw Convention by the U n i t e d S t a t e s " , 1966, 4 Canadian Yearbook o f I n t e r n a t i o n a l Law 194, p. 209 l o w e n f e l d , L i a b i l i t y o f C a r r i e r s f o r A c c i d e n t s i n I n t e r n a t i o n a l F l i g h t s - The  Warsaw C o n v e n t i o n , 1974, p. 33 * 3 M a n u f a c t u r e r ' s Hanover T r u s t Co. v American A i r l i n e s 252 NYS 517 4 S e a b r o o k e , A i r Law, 1964, p. 30 5 I b i d , p. 30 6 G r a n d Trunk P a c i f i c Coast Stemship Co. v Simpson (1922) 63 SCR 361 7 L i s i v A l i t a l i a L i nee Aeree I t a l i a n n e (1962) SS3 F.Supp. 237 8 I b i d , p. 240 M o n t r e a l Trust Co. v C P . A i r (MH. Sup. Ct . ) 12 Av. Cos. 17 (1971) 1 0 B a k e r v Bolton 1 Campb. 493 1 1 I b i d , p. 510 1 2 S a n d , "An H i s t o r i c a l Survey of I n t e r n a t i o n a l A i r Law S i n c e 1944", 7 M c G i l l Law J o u r n a l 1 2 5 , 1960, p. 155 1 3 I b i d , p. 155 1 4 K e n n e l 1 y , The T r i a l Lawyers' G u i d e , 1969, p. 53 APPENDIX A (Continued)  1 5 H o r a b i n v BOAC (1952) 2 AER 1016 ^ A t i y a h , V i c a r i o u s L i a b i l i t y i n the Law o f T o r t s , 1967, p. 3 APPENDIX B ^ e a b r o o k e , A i r Law, 1964, p. 48 APPENDIX C S t e p h e n , "Montreal Conference and I n t e r n a t i o n a l A v i a t i o n L i a b i l i t y L i m i t a t i o n s " , 33 J o u r n a l o f A i r , Law and Commerce 554, 1967, p. 587 A t i y a h , P . S . , V i c a r i o u s L i a b i l i t y i n the Law o f T o r t s , London, B u t t e r w o r t h s , 1967 B a i l e y , F. L e e , "Choice of Law - Mass D i s a s t e r Cases I n v o l v i n g D i v e r s i t y o f C i t i z e n s h i p " , 1972, 38 J o u r n a l o f A i r , Law and Commerce 285 B l a c k , Henry C , B l a c k ' s Law D i c t i o n a r y , S t . P a u l , West P u b l i s h i n g C o . , 1968 B o y l e , R o b e r t , "Guatemala P r o t o c o l " , 1973, 6 Akron Law Review 123 B o y l e , R o b e r t , "Response to Lee K r e i n d l e r " , 1973, 6 Akron Law Review 141 B u r l e s o n , T . , "Computer A p p l i c a t i o n to Law - I n t e r n a t i o n a l A v i a t i o n L i a b i l i t y A n a l y s i s - Warsaw, Hague and Montreal F l i a h t " , 1969, 35 Journal of A i r , Law and Commerce 249 C a l k i n s , " H i k i n g the L i m i t s o f L i a b i l i t y at the Hague", 1962, Proceedings o f American S o c i e t y o f I n t e r n a t i o n a l Law 120 C a p l a n , H a r o l d , "Insurance, Warsaw C o n v e n t i o n , Changes Made Necessary by the 1966 Agreement and P o s s i b i l i t y o f D e n u n c i a t i o n o f ' t h e Convent ion", 1967, 33 J o u r n a l o f A i r , Law and Commerce 663 C o r r i g a n , Matthew J . , "From A to B - A v i a t i o n I n d u s t r i e s R e s p o n s i b i l i t y to Passengers", 1968, 34 J o u r n a l o f A i r , Law and Commerce 506 D r i o n , H . , L i m i t a t i o n o f L i a b i l i t i e s i n I n t e r n a t i o n a l A i r Law, Hague, M a r t i n u s N i j h o f f , 1954 El D i n , Adel S . , A v i a t i o n Insurance P r a c t i c e , Law and R e i n s u r a n c e , London, Wm. Clowes and Son, 1971 F i t z g e r a l d , G . F . , " L i a b i l i t y Rules i n .the I n t e r n a t i o n a l C a r r i a g e o f Passengers by A i r and the N o t i c e o f D e n u n c i a t i o n o f the Warsaw Convention by the U . S . A . " , 1966, 4 Canadian Yearbook o f I n t e r n a t i o n a l Law 194 F i t z g e r a l d , G e r a l d F . , "Current Development i n the R e v i s i o n o f Rules Governing the L i a b i l i t y o f the A i r C a r r i e r i n Respect of the I n t e r n a t i o n a l C a r r i a g e o f Passengers by A i r " , 1968, 6 Canadian Yearbook o f I n t e r n a t i o n a l Law 188 F i t z g e r a l d , G e r a l d F . , " R e v i s i o n o f the Warsaw Convent ion", 1970, 8 Canadian Yearbook o f I n t e r n a t i o n a l Law 284 F i t z g e r a l d , G e r a l d F. , "Guatemala C i t y P r o t o c o l to Amend the Warsaw Convent ion", 1 9 7 1 , 9 Canadian Yearbook o f I n t e r n a t i o n a l Law 217 F i t z g e r a l d , G e r a l d F . , " A i r Law 1972 - 2022", 1 9 7 3 , 51 Canadian Bar Review 264 F l o y d , James C , "Warsaw Convention - Theme of U n c e r t a i n t y " , 1969, 35 J o u r n a l o f A i r , Law and Commerce 123 G u e r r e r i , G u i s e p p e , American J u r i s p r u d e n c e on the Warsaw C o n v e n t i o n , M o n t r e a l , I n s t i t u t e o f A i r and Space Law - M c G i l l U n i v e r s i t y , 1960 Hearn, George H . , " L i m i t a t i o n s on L i a b i l i t y o f I n t e r n a t i o n a l C a r r i e r s " , 1967, 13 New York Law Forum 523 H i l d r e d , S i r W i l l i a m , " A i r C a r r i e r L i a b i l i t y - S i g n i f i c a n c e o f the Warsaw Conven-t i o n ' and Events Leading up to the Montreal Agreement", 1967, 33 J o u r n a l o f A i r , Law and Commerce 521 IATA, Legal Committee Report to the 35th Annual Meeting of IATA - 1967, M o n t r e a l , I ATA B u l l e t i n #35 IATA, 48th Legal Committee M e e t i n g , M o n t r e a l , May 1973 IATA, Legal I n f o r m a t i o n B u l l e t i n #3695B, M o n t r e a l , October 22nd, 1973 IATA, I n f o r m a t i o n B u l l e t i n #29, M o n t r e a l , December 1973 ICAO, Report and Minutes o f the Legal Commission (Rome) - August - September 1962, M o n t r e a l , Doc #8279 A14 - LE/11 ICAO, Report and Minutes o f the Legal Commission (Montreal ) - June - J u l y 1965, M o n t r e a l , Doc #8517 AT5 - LE/10 ICAO, Annual Assembly Report 1967, 16th S e s s i o n , M o n t r e a l , Doc #8724 AIP/3 ICAO, Legal Committee - 16th S e s s i o n - Volume 1 + 2 - Minutes and Documentat ion, M o n t r e a l , 1968, Doc #8787/LC/156 - 1 + 2 ICAO, Subcommittee o f the Legal Committee on the Quest ion o f the R e v i s i o n o f the  Warsaw Convention as Amended by the Hague P r o t o c o l (Volumes 1 + 2 ) , Montreal 1969, Doc #8839 - LC/158 - 1 + 2 ICAO, Legal Committee - 18th S e s s i o n - Volume 1 + 2 , Minutes and Documentation, M o n t r e a l , 1971, Doc #8936 - LC/164 - 1 + 2 I r w i n , C l a r e J . , "Passenger L i a b i l i t y L i m i t s i n I n t e r n a t i o n a l and Domestic A i r C a r r i a g e " , 1962, Canadian Bar Papers 16 J e n n i n g s , "Some Aspects of the I n t e r n a t i o n a l Law o f the A i r " , 1949, 75 Hague R e c u e i l 513 Keenan, P.B. 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