WARSAW/HAGUE/MONTREAL:
WHERE ARE WE NOW?
John E. Parkerson, Jr.
General Attorney
Delta Air Lines, Inc.1
We have witnessed significant developments during the past year-and-a-half in
the field of international civil aviation law. This paper introduces one of the most
significant of those developments: the entry into force of the 1999 Montreal Convention.
It provides an overview of the current status of Warsaw/Hague and the 1999 Montreal
Convention, and it identifies a few of the vexing issues that airlines face daily during this
period in which several liability regimes apply to international air transportation. Other
panels and panelists will cover related aspects of this topic: the emerging international
legal issues under the several international aviation liability conventions (i.e., Montreal,
Warsaw/Hague and Rome Conventions) and related developments in safety, aircraft
cabin health (e.g., deep vein thrombosis, or “DVT”), codeshares, passenger and ground
victim liability, and war risk and related insurance coverage implications, as well as
recent efforts from the European Commission and the EU’s member states to implement
modifications to those treaty regimes that are intended to modernize international civil
aviation liability and to provide additional protections to consumers.
1
The paper expresses my personal views and opinions, and nothing stated herein is to be regarded as the
position of my employer, Delta Air Lines, Inc.
I.
An Overview of Warsaw/Hague and 1999 Montreal.
On September 5, 2003, the U.S. became the 30th country officially to ratify the
1999 “Convention for the Unification of Certain Rules for International Carriage by Air”
(“Montreal Convention”) and send it to the International Civil Aviation Organization
(“ICAO”).2 The convention, concluded in May 1999, modernizes the rules governing the
liability of airlines to passengers for deaths or injuries attributable to accidents that occur
on international trips. The Montreal Convention is a recodification of existing carrier
liability rules in their entirety and ultimately will replace, according to its terms, the 1929
Warsaw Convention, as amended.3 One word of caution: as I will explain below,
“ultimately” is a key word that has significant implications; until all countries are party to
the Montreal Convention, Warsaw as amended will continue to apply alongside that
Convention, effectively resulting in dual liability regimes.4
This modernization was largely an effort of the world's aviation community to
abolish clearly inadequate limits on airline liability contained in the 1929 Warsaw
Convention. Because U.S. ratification brought the number of ratifying countries to 30 -the number required to bring the Montreal Convention into force -- the liability regime
2
Convention for the Unification of Certain Rules for International Carriage by Air done at Montreal on 28
May 1999, available at http://www.icao.int/icao/en/leb/mtl99.htm.
3
The Warsaw Convention liability cap effectively is $75,000 for travel to, through or from the U.S.;
otherwise, it varies from the original 1929 cap of approximately $10,000 upwards, depending on the
particular amendments to Warsaw that might apply to the journey.
At risk of grossly oversimplifying matters, I refer to “dual” Warsaw and Montreal liability regimes.
The picture is actually more complex. The U.S. now is party to four variations of the treaty regimes
governing liability arising out of international carriage: (i) 1999 Montreal Convention, (ii) 1975
Montreal Protocol #4 (“MP4” - amending the 1929 Warsaw Convention), (iii) 1955 Hague Protocol
(“Hague” - amending the 1929 Warsaw Convention), and (iv) 1929 Warsaw Convention (“Warsaw”).
As a practical matter, very few States today are party to unamended Warsaw. Stated differently, most
States are party at least to Warsaw as amended by Hague.
4
entered into force for all ratifying countries on November 4, 2003, which was in
accordance with the 60-day waiting period under the Convention.
The Montreal Convention applies to all roundtrip journeys originating in a
country that has ratified the convention (e.g., the U.S.), and to all travel between
countries that have ratified Montreal. It affirms the waivers of Warsaw Convention
liability limits given effect by most international carriers (including my employer, Delta,
in 1997) via the1996 International Air Transport Association (“IATA”) intercarrier
agreements5 by eliminating the Warsaw Convention's limits on airlines' liability for death
or injury to international passengers. It also affirms the 1996 IATA intercarrier
agreements by making the carrier liable for proven damages up to about $140,0006, with
no limit on recoveries above that amount, regardless of the carrier's fault. It also adds to
the four previous bases of jurisdiction under the Warsaw Convention by permitting
lawsuits in cases of passenger deaths or injuries to be brought in the country of the
passenger's principal and permanent residence.
A.
Montreal Convention Highlights
The following are some particularly significant highlights:
In 1996, the world’s major U.S. as well as foreign air carriers, including all [U.S.] Air Transport
Association (“ATA”) members, agreed to conclude “special contracts” pursuant to a series of IATA
intercarrier agreements that waived the Warsaw Convention liability limits. ATA-member carriers, with
Department of Transportation (“DOT”) approval, implemented those contracts via tariff revisions in
February 1997. In effect, the Montreal Convention codifies the most significant of these liability rules the
industry itself adopted in 1996. The industry took that initiative shortly after it became apparent that the
U.S. Senate would not provide its advice and consent to the ratification of several amendments to the
Warsaw Convention (e.g., 1955 Hague Protocol, 1961 Guadalajara Supplementary Convention, and 1975
Montreal Protocol No. 3) because of continuing concerns about the liability rules reflected in those
proposed Warsaw Convention revisions.
5
The Convention expresses liability amounts in Special Drawing Rights, or “SDRs”. One SDR currently
equals approximately USD 1.4.
6
1.
The Montreal Convention eliminates the meager and arbitrary
limits of liability applicable under the Warsaw Convention when passengers are killed or
injured in international air carrier accidents. These limits previously applied in all cases,
except where the harm was due to the carrier's willful misconduct. It thereby codifies
what is in effect an unlimited liability system premised on presumed air carrier liability to
protect international passengers in the event of a tragedy that results in personal injury or
death. Significantly, it preserves the requirement that an “accident” must have occurred
as a precondition to recovery.7
2.
In personal injury and death cases, the Montreal Convention
requires air carriers in most cases to make payments of up to approximately $140,000 of
proven damages on behalf of accident victims, without regard to whether the airline was
at fault.8
3.
The kinds of damages recoverable under the Convention have not
changed: the Montreal Convention, consistent with existing caselaw under the Warsaw
Convention liability regime, expressly bars non-compensatory damages by establishing,
in clear language, its exclusivity in the area of claims for damages arising in the
international transportation of passengers, baggage and cargo.9 Most significantly,
7
See art.17.1.
8
Art. 20, however, preserves the carrier’s total exoneration defense of contributory negligence.
9
See art. 29.
however, for the first time, the Convention expressly bars punitive damages from
recovery.10
4.
New provisions on codesharing clarify that when the airline
operating a flight is not the airline from which the transportation was purchased, a
passenger may recover from either the airline operating the aircraft at the time of the
accident or the airline whose code is carried on the passenger's ticket. These rules only
apply to passengers actually traveling under a code-share ticket. Passengers traveling
under the code of the operating carrier have recourse only against that carrier, regardless
of whether there are other code-share passengers on that particular flight.11 For example,
the Swissair 111 crash in 1997 was also a Delta codeshare flight. The Montreal
Convention, by its express terms, today would not authorize suits against Delta by
Swissair's own ticketed passengers.
5.
By permitting passengers’ death or injury lawsuits to be brought in
the country of a passenger's principal and permanent residence, survivors of international
aircraft accidents and the families of those accident victims, in almost every case, will
have access to their own courts in seeking damages for the losses they suffered.12
10
Art. 29.
11
Arts. 39-40.
See art. 33.2. This added benefit for what some U.S. victims’ groups viewed as the problem of the
“wondering American” had been a priority for the U.S. Government for several years. Note that, in
accordance with jurisdictional principles, the carrier still must have a commercial presence in the country in
which a plaintiff seeks to bring a law suit.
12
6.
The Montreal Convention furthers U.S. efforts to ensure that U.S.
air cargo carriers and shippers can take advantage of technological innovations now
available to facilitate and expedite the processing of international air cargo. The
Convention’s cargo provisions, for example, facilitate carriers’ use of electronic
documentation of shipments, without unnecessary and archaic airwaybill documentation
requirements, such as a description of the nature of the goods.13
These important changes to the international aviation liability treaty regime have
prompted the industry to identify those processes that need internal revision in order to
ensure airline compliance with the new rules. Many changes, such as those providing
public notices concerning Montreal (e.g., tickets and conditions of contract and carriage,
changes to web site notices, etc.) necessarily require a uniform industry approach. Other
areas (e.g., codeshare and other marketing agreement provisions) require in-house
counsel to fashion airline-unique provisions internally.
B.
Some Key Elements of the Warsaw/Hague-Montreal “System”
Several key themes from the Warsaw/Hague-Montreal “system” will repeatedly
appear when one examines the emerging international liability issues that I identified in
my opening paragraph. These themes provide a framework from which many
Convention-related liability issues may be analyzed.
13
See arts. 5-10. This essentially was retention of the cargo provisions in Montreal Protocol No. 4, which
had updated the Warsaw Convention’s antiquated cargo documentation provisions.
1.
Importance of a “Carrier” and a “Contract”. The Conventions
generally state airlines’ obligations and liabilities in terms of a “carrier’s” contract (or, in
the case of cargo, airwaybill), or ticket, with its passenger. This concept of a single
carrier’s contractual relationship being stated pursuant to that carrier’s contract with the
passenger, together with all applicable contract terms, has important implications when
analyzing, for example, obligations and liabilities that arise during codeshare
transportation – where more than one airline (“carrier”) is involved. The single
“carrier”14 issue also could arise in the context of an airline conducting a safety review of
another airline, usually arising out of codeshare relationships, thereby acting in a non“carrier” role. Fortunately, the “carrier” issue has been resolved, for the most part, by
express provisions in the Montreal Convention that allocate liability between airlines.15
2.
Non-“Fault’-based Liability. Another recurring theme is related to
the very nature of the liability regime itself: the fact that the Warsaw/Hague-Montreal
“system”, unlike common liability regimes generally, is not “fault” based. Instead, the
system presumes fault on the part of the carrier, subject to certain specific conditions and
The “carrier” issue, as well as the exclusivity of the Conventions, are questioned in the safety context
because many carriers perform a broad range of services for foreign carriers under codeshare agreements,
including such services as safety audits, maintenance, consulting services of several varieties, and others -i.e., the non-”carrier” roles. The concern is that in performing these non-“carrier” roles, the airline
providing the services might become susceptible in the event of an accident to some kind of “end run”
around Warsaw so that state court measures of damages could apply, with the resulting risks of punitive
damage exposures. See also, art. 1.3.
14
Montreal Convention, Ch.V. Under Montreal’s codeshare articles, the only relevant relationships are
with regard to those passengers to whom the codeshare applies – i.e., the passengers of the “marketing” (or
“contracting”) carrier. As to those passengers, liability is mutual: (i) “contracting” carrier because of the
contract of carriage, and (ii) “actual” because it was flying the “metal”. The “actual” carrier’s own
ticketed passengers fall outside Ch.V mutual liability rules, so that the ordinary Montreal liability rules
apply with respect to them; as operator and ticketer, only it is the “carrier” with regard to Montreal liability.
15
defenses. This key distinction provides much of the analytical basis for all kinds of airtravel-related death and injury claims, and is especially relevant today with regard to
health-related claims such as those for DVT. Because the Conventions’ remedies are
exclusive16, plaintiffs who bring death or injury causes of action premised on carrier fault
(whether willful or through negligence) are relieved from having to prove the traditional
tort elements of carrier duty, breach of duty, and that the breach was the proximate cause
of the death or injury.
This presumptive fault regime, however, does not simply shift the burden to a
carrier to prove that it was not at fault – i.e., that it was not negligent or that it took “all
necessary measures” to avoid the injury. Quite the contrary, in order to benefit from a
burden-shift to the carrier, a plaintiff who is making a death or injury claim must, as a
prerequisite to proceeding with the claim, sufficiently offer proof that the death or injury
was the result of an “accident”.17 The inclination of many plaintiffs’ lawyers to
misunderstand the fundamental differences between Convention-based “accidents” and
non-Convention-based “negligence”, and thereby follow their natural tendencies to
interject “fault”-based theories for recovery in international aviation liability cases, is at
the heart of much of the current airline cabin health-related litigation.18
16
See Warsaw Convention, art. 24; Montreal Convention, art. 29.
17
Warsaw Convention, art. 17; Montreal Convention, art. 17.
18
Air France v. Saks, 470 US 392 (1985). Once a plaintiff has established an appropriate (i.e., on board
the aircraft or occurring while in the course of embarkation or disembarkation) “accident” in a death or
injury case, the carrier then may assert the non-“fault” defenses that the Conventions provide. Recovery, in
any event, still would be predicated on plaintiff’s proof of injury and damages.
3.
Limited Liability. The Warsaw/Hague and Montreal “system” also
limits liability both by amount and by type. With respect to amount, the Warsaw
Convention capped death and personal injury liability at approximately US$10,000.19
Warsaw liability caps could be exceeded, however, if a plaintiff could prove the carrier’s
willful misconduct. Similar liability limitations applied for baggage and cargo loss or
damage. Amendments to Warsaw gradually raised the cap; however, those amendments
were not universally adopted, and a couple of significant intercarrier agreements
eventually raised the liability limits – first to US$75,000 for travel to, through or from the
United States (within which limit a carrier could not assert the Warsaw “all necessary
measures” defense); and finally, in 1996, to full waivers of liability limits (within which
the Warsaw “all necessary measures” defense could not be asserted for the first 100,000
SDRs of liability). The 1999 Montreal Convention essentially adopted this latter 1966
intercarrier agreement system of liability cap waivers.
With respect to “type”, the Convention system limits liability to those death and
personal injury cases in which plaintiff proves a “bodily injury”.20 No recoveries are
permitted for purely mental injuries.21 Furthermore, the kinds of damages that may be
recovered are limited to proven compensatory damages, thereby denying plaintiff
recoveries of claimed loss of consortium and similar difficult-to-calculate damages.
Finally, the Convention system bars recoveries of punitive damages.22
19
Originally, 125,000 French Francs. Art. 22.
20
Warsaw Convention, art. 17.
21
Id.
22
Art. 17 expressly limits recoveries for “damage sustained”.
4.
Jurisdiction. The Warsaw/Hague and Montreal “system” includes
very specific rules with regard to where an action may be brought. These five specified
places are: (a) the place of the passenger’s destination, (b) the place of the carrier’s
domicile, (c) the carrier’s principal place of business, (d) the place where the ticket was
purchased, and (e) for death and injury claims arising under the Montreal Convention, the
place of the passenger’s principal and permanent residence.23 While these jurisdictional
rules appear clear on their surface, litigation periodically surfaces that contests the
principle that the “destination” is the final destination shown on the ticket which, for a
round-trip, is the starting point of the travel; or raises the issue of the appropriate state
(e.g., Florida) within a country’s federal system in which a plaintiff may bring an action
and the corresponding set of applicable substantive state laws.
C.
Warsaw versus Montreal: Which Applies and How
While we are able to find recurring themes within the Warsaw/Hague and
Montreal liability “system” that apply regardless of applicable treaty and that provide a
useful framework for understanding and analyzing international liability issues, the
modernized rules represented by 1999 Montreal nevertheless present considerable
challenges so long as carriers are subject to numerous liability regimes. With these new
liability rules, either the Warsaw Convention or some permutation thereof, or the
Montreal Convention, will apply to determine baggage, cargo, delay, and death or
23
Warsaw, art. 28; Montreal, art. 33.
personal injury liability for international travel. Which Convention applies depends on
the passenger’s international itinerary.
The Montreal Convention applies to international travel on or after November 4,
2003 that is: (a) a round-trip journey from a country (e.g., the U.S.) that has ratified
Montreal, or (b) a one-way journey in which both the country of origin (e.g., the U.S.)
and the country of destination (e.g., Mexico) have ratified Montreal.24 Countries that
have ratified Montreal are listed at the following website:
www.icao.int/en/leb/mtl99.htm
The following outlines some of the practical applications of the new 1999 Montreal rules,
contrasted against the still-applicable Warsaw/Hague Convention.
INTERNATIONAL BAGGAGE LIABILITY
1.
For travel to which Montreal applies, the maximum baggage
liability limit for checked and unchecked baggage is 1,000 SDRs (Special Drawing
Rights) per customer, unless a higher value is declared and applicable charges are paid in
advance.

Most airlines’ internal policies use the dollar-to-SDR conversion
rate on the settlement date of the claim (1,000 SDRs on the date
of this paper equal approximately $1,400). All claims remain
subject to proof of the amount of the customer’s actual loss.
24
Art. 1.2. Generally, the applicable treaty regime for international carriage is determined as follows: (i) if
the carriage is one-way (i.e., from one country to another), then the applicable regime is the most recent
convention, or convention as amended, to which both States are party; (ii) if the carriage is round-trip (i.e.,
the origin and destination are the same [e.g., Atlanta-São Paulo-Atlanta]), then the applicable regime is the
State from which the round-trip carriage originates.

The current SDR rate may be found at the following websites:
www.sales.travelang.com/money/ or
www.imf.org/external/np/tre/sdr/db/rms_five.cfm
2.
This applies to cases of baggage destruction, loss, damage, or
3.
Warsaw Convention baggage liability limits remain in effect
delay.
for international travel not governed by Montreal: i.e., $640 per bag for checked
baggage and $400 for unchecked baggage.
4.
Most airlines’ excess valuation charges remain the same.
When figuring declared value charges, the international liability amounts of $640 for
Warsaw or 1,000 SDRs for Montreal are deducted from the total declared value.
For example, Mrs. Jones wishes to declare a value of $2,000 for her checked bag,
thereby requiring her to purchase excess valuation coverage.

If Mrs. Jones travels round-trip from Atlanta to Bogotá (a nonparty), she is covered by Montreal because the U.S., has ratified
that Convention. Her excess valuation is $2,000 minus the 1,000
SDRs amount. If, e.g., the SDR-to-dollar equivalent is $1,470,
then the total valuation is $530. If the particular airline’s
valuation charges were $1.00 per $100 declared value, then the
charge would be $5.30.

If Mrs. Jones travels one-way from Atlanta to Bogotá, she is
covered by the Warsaw Convention because Colombia (as of
1/24/05) has not ratified Montreal. Her excess valuation is
$2,000 minus the $640 Warsaw liability amount for a total
valuation of $1,360. If the particular airline’s valuation charges
were $1.00 per $100 declared value, then the charge would be
$13.60.
DELAY
1.
Montreal establishes a specific liability limit of 4,150 SDRs
per passenger (note: see above for baggage delay).
2.
Existing airline rules that were promulgated under Warsaw
apply with regard to delayed passengers whose travel is not covered by Montreal.
BODILY INJURY
1.
Most major U.S. airlines in February 1997 filed a tariff
revision, applicable systemwide that effected certain changes to the Warsaw liability
limits for death or bodily injury occurring during international carriage. These tariff
filings implemented the 1996 intercarrier agreements to which I earlier referred.
That revision is found, for example, at Rule 55(B)(1) of Delta’s international
conditions of carriage. Montreal adopted those changes, while adding other
important modifications to the passenger death/injury liability regime.
2.
For our purposes, the essential elements are as follows:

Under the 1996 IATA intercarrier agreements and the Montreal
Convention, the carrier has strict liability (subject to the defense
of contributory negligence) for the first 100,000 SDRs of the
claim.

Above that amount of the claim, the carrier is liable unless it
proves that it was not negligent or that the loss was attributable
solely to a third party’s negligence. This new formulation thereby
abandons the old Warsaw “willful misconduct” tool for exceeding
the previous liability caps.

Assuming liability is established, the previous Warsaw
Convention liability caps are “waived” or, more accurately under
Montreal “abolished”, so that potential passenger death/injury
liability becomes unlimited. This means that the claimant, as
before, still has to prove the amount of allowable compensatory
damages. Punitive damages may not be recovered.

The Montreal Convention, reflecting legislation primarily in
Europe, encourages carriers to make “advance payments” in the
event of accidents. Many airlines consequently have policies of
making $25,000 advance payments to next of kin, for their
“immediate needs”, in the event of passenger death.
CARGO
The applicable liability limit is especially important in establishing liability
rules for cargo. There are numerous permutations, depending on the liability regime
applicable to the transportation, affecting the amount of liability, the conditions
under which liability may be established, defenses to carrier liability, airwaybill
(“AWB”) and cargo receipt documentation requirements, and AWB form. Because
of the many complexities attributable to the numerous liability regimes that
potentially could apply to a shipment pending widespread adoption of 1999
Montreal, I attach a separate Annex that will permit you to appreciate the potential
for headaches in this area.25
II.
Current Implementation Efforts
A.
EC Regulation 889/2002
The section above illustrates that the Montreal Convention’s entry into force on
November 4, 2003 has not yet brought uniformity among the numerous liability regimes
that continue to operate. The multiple liability regimes, represented by Warsaw/Hague
and Montreal, together with the intercarrier agreements, will continue to operate
25
See Annex A.
simultaneously for the foreseeable future, given large number of countries still not party
to Montreal.26
EC Regulation 889/2002 represents the European Union’s effort to bring
uniformity within the Community by implementing the Montreal Convention so that it
applies to all air transportation provided by Community airlines and for all air
transportation sold or provided within the Community. The Regulation became
applicable when the Montreal Convention entered into force for the European
Community on June 28, 2004. It expands Montreal, adopting it “systemwide” for EU
carriers, even for international travel in circumstances – for example, one-way travel to a
Warsaw country -- where Montreal ordinarily would not apply. The Regulation even
extends Montreal to transportation on non-EU carriers that sell transportation in the
Community. Aside from overreaching, EC Regulation 889 in some respects conflicts
with the Montreal Convention that it is intended to implement.
Passenger notices is one of the difficult Montreal implementation issues. That
issue is made even more difficult because of the inevitable perceived need by EU
regulators to distinguish European countries and carriers that apply Montreal from those
other countries, like the U.S., that might be Party to Montreal but continue to recognize
the reality of non-uniform sets of liability rules within the Warsaw/Hague and Montreal
liability “system”. EC Reg. 889/2002 has very specific notice language that EU carriers
are required to adopt. Because only Montreal will apply, that notice is relatively simple
26
As of January 18, 2005, 62 States had ratified the Montreal Convention. Information on Parties to
Montreal is available on the ICAO website: http://www.icao.org/cgi/goto_m.pl?/icao/en/leb/treaty.htm.
in form. Non-EU (e.g. U.S.) carriers that remain subject to liability regimes in addition to
Montreal are required develop lengthier notices that explain that passengers who travel
on those non-EU carriers might be subject to the implicitly more restrictive, less
favorable Warsaw/Hague liability rules. In essence, the Regulation’s requirements for
carriers to publish notices in which EU carriers appear to offer more favorable liability
benefits for their passengers than their non-EU competitors seems to portend a
competitive battle of the notices.
B.
IATA Notices
In mid-2003, the IATA Legal Advisory Council (“LAC”) formed a small
Working Group to prepare notices to bring carrier notices into compliance with EC
Regulation 889. After numerous revisions, the LAC Steering Group in May 2004 began
to consider the final notices drafts. After additional Steering Group deliberations in June
produced the final texts, the IATA Passenger Services Conference at the end of that
month adopted changes to IATA Recommended Practice (“RP”) 1724c (suggested
notices for use by EU carriers to meet Regulation 889’s specific textual requirements)
and Resolution 724c (notices for IATA “neutral”, or travel agency, ticket stock). IATA
thereafter filed the notices with the U.S. Department of Transportation (“DoT”) for
approval in accordance with U.S. regulatory procedures.27
The latter notice, Resolution 724c, is particularly important because, since it
applies to neutral ticket stock worldwide, it has to include sufficient Montreal notice
language to meet the content requirements of EC Regulation 889, as well as adequate
27
DOT Docket 2004-18531.
description of contrasting liability provisions under Warsaw/Hague. It represents an
attempt to cover all liability bases while simultaneously avoiding any appearance of
favoritism between carriers that are subject to Montreal systemwide versus those for
which multiple liability regimes might apply.
At the same time, there is general
recognition among IATA-member carriers that these notices are likely to be works in
progress: a stop-gap measure primarily to ensure EU regulatory compliance. The next
stage would be to review, revise or delete the numerous other antiquated and duplicitous
notices that, given these recent liability developments, cause ambiguity with regard to
carriers and passengers’ respective obligations and rights (not to mention the excessive
ticket jacket space).
As expected, the U.S. DoT registered questions about certain aspects of the
notices. Meanwhile, a meeting in December 2004 between DoT lawyers and IATA LAC
working group representatives was encouraging. DoT indicated a clear understanding of
the notices dilemma presented by the EU’s action, and its expressed concerns were
reasonable. The IATA LAC working group currently is preparing fresh drafts that likely
will be submitted soon to DoT in substitution of IATA’s previously filed RP 1724c and
Resolution 724c.
C.
ATA Intercarrier Agreement
As noted previously, EC Regulation 889 effectively divided carriers into two
groups: the European Community “have Montreal systemwide” carriers and the “havenot Montreal systemwide” carriers. U.S. carriers, for whom trans-Atlantic transportation
constitutes a significant portion of their revenues, were uncomfortable with this
mismatched liability regime situation – particularly as they had eagerly embraced
Montreal and actively supported its ratification by the U.S. Government. Moreover, 1999
Montreal’s uncapped compensatory damages formula for passenger injury or death
already formed a part of U.S. carriers’ systemwide international liability schemes since
the 1996 IATA intercarrier agreement liability cap waivers. U.S. carriers, already subject
as a matter of treaty law to Montreal for their international round-trip flights originating
in the U.S., were therefore opposed to any notices that implied a liability disadvantage for
their passengers. Moreover, non-uniform notices and mismatched liabilities contradicted
the industry’s and passengers’ demands for more clearly delineated passenger-carrier
rights and obligations.
As a consequence, U.S. carriers and the Air Transport Association (“ATA”)
proposed that U.S. carriers adopt a new intercarrier agreement that waives
Warsaw/Hague limitations and defenses, where applicable, to Montreal levels
systemwide for international travel. The proposed intercarrier agreement also would
include a notice, similar to the notice that EU carriers would use, that reflects the U.S.
carriers’ waivers. It also would provide U.S. carriers an opportunity to clarify certain
Montreal provisions. This would help match U.S carriers’ interline and codeshare
liability regimes with those of their EU partners and open the way for simplified notices
and conditions of contract. In order to adopt Montreal systemwide, the intercarrier
agreement will request DOT grant antitrust immunity (as with the 1996 intercarrier
agreement -- the IPA -- that it is replacing), and it will waive to Montreal levels the
antiquated conditions that still exist to some extent under the Warsaw Convention.
The ATA legal working group process has operated much the same as IATA’s:
ATA representatives met with DoT personnel in December to explain the draft
intercarrier agreement so that any open DoT issues might be identified and resolved prior
to its filing for formal review and approval. The draft ATA intercarrier agreement since
has undergone further revisions, and ATA is preparing a final draft for DoT’s review.
III.
Conclusion
The foregoing is only a brief introduction to the current status of international
aviation liability and the associated complex liability issues – particularly during this
interim period during which multiple international liability regimes exist side by side,
often overlapping on the same carriage. Well-intentioned EU and U.S. regulators, and
many international carriers, are seeking ways to close the gaps between Warsaw/Hague
and Montreal. In our increasingly competitive aviation industry environment, we cannot
permit non-uniform international air transportation liability to become one more
competitive weapon. Our industry and our customers deserve the liability uniformity that
Montreal was intended to secure. The U.S. and European examples show two different
ways in which the gap is being closed.
ANNEX A
CARGO
1.
Montreal99 – it adopts Montreal Protocol #4 (“MP4”): it
places an unbreakable liability cap of 17 SDRs per kilo (approximately $21.00 at
current US$-SDR exchange rates) for lost or damaged cargo.

also includes provision for shippers to make a special declaration
and to insure for a higher value.

liability cap also applies to delayed cargo.

the carrier is exonerated from liability if it proves the damage
resulted from the cargo’s inherent defect; defective packing; act
of war; or act of public authority carried out in connection with
the cargo’s entry, exit or transit (note: it drops the “solely”
qualifier).
2.
MP4 – it places an unbreakable liability cap of 17 SDRs per
kilo (approximately $21.00 at current $-SDR exchange rates) for lost or damaged
cargo.

also includes provision for shippers to make a special declaration
and to insure for a higher value.

liability cap also applies to delayed cargo.

retains Hague provision that if, during shipment under one AWB,
loss, damage or delay to part of the shipment affects the value of
the whole shipment, the weight of the whole shipment is used in
calculating the carrier’s liability.

the carrier is exonerated from liability if it proves the damage
resulted solely from the cargo’s inherent defect; defective
packing; act of war; or act of public authority carried out in
connection with the cargo’s entry, exit or transit.
3.
Hague – it limits carrier liability to 250 French gold francs per
kilogram for lost or damaged cargo.

also includes provision for shippers to make a special declaration
and to insure for a higher value.

liability limits may be broken if the claimant can prove that the
carrier acted with willful misconduct or with intent to cause
damage or recklessly and with knowledge that damage would
probably result.

adds that conversion to local currency is to be made on the date of
judgment.

adds that if, during shipment under one AWB, loss, damage or
delay to part of the shipment affects the value of the whole
shipment, the weight of the whole shipment is used in calculating
the carrier’s liability.

the carrier is exonerated from liability if it proves the damage
resulted solely from the cargo’s inherent defect; defective
packing; act of war; or act of public authority carried out in
connection with the cargo’s entry, exit or transit.
4.
Warsaw – it limits carrier liability to 250 French gold francs
per kilogram (approximately $20.00 per kilogram per DOT regulations) for lost or
damaged cargo.

also includes provision for shippers to make a special declaration
of value.

liability limits may be broken if the claimant can prove that the
carrier acted with willful misconduct or with intent to cause
damage or recklessly and with knowledge that damage would
probably result.

the carrier is exonerated from liability if it proves the damage
resulted solely from the cargo’s inherent defect; defective
packing; act of war; or act of public authority carried out in
connection with the cargo’s entry, exit or transit.
The applicable liability regime also affects the requirements for airwaybill (“AWB”)
and cargo receipt documentation.
Montreal99 – it specifies three pieces of information that must
1.
be included on the AWB and cargo receipt: place of departure, place of destination,
and the cargo’s weight.

carries over the MP4 provision that deletes the Warsaw and
Hague language that precludes the carrier from asserting its
liability limits for failure to make out an AWB or to include this
information.
MP4 – it specifies three types of information that must be
2.
included on the AWB and cargo receipt: places of departure and destination, the
cargo’s weight, and intermediate stopping place in another State’s territory if the
place of departure and destination are within the territory of the same Warsaw/Hague
State.

deletes the Warsaw and Hague language that precludes the carrier
from asserting its liability limits for failure to make out an AWB
or to include this information.
3.
Hague – it specifies three types of information that must be
included on the AWB: places of departure and destination, intermediate stopping
place in another State’s territory if the place of departure and destination are within
the territory of the same Warsaw/Hague State, and a commonly called “Warsaw
applicability” notice.

carries over the Warsaw provision that failure to make out an
AWB or to include this information generally precludes the
carrier from asserting its liability limits.
4.
Warsaw – requires that 17 separate categories of information
be included on the AWB.

failure to make out an AWB or to include this information
generally precludes the carrier from asserting its liability limits.
The applicable liability regime also affects the AWB form.
1.
Montreal99 – fully recognizes the electronic age in the
handling of cargo and simplifies required AWB documentation. Carriers, without
having to obtain the shipper’s consent, may substitute computer entries for paper
AWBs, thereby allowing carriers to expand the electronic processing systems
already in use for domestic cargo shipments. A formal AWB is no longer required,
and any means which preserves a record of carriage may be substituted for a paper
AWB.

for paper AWBs, there must be three original AWBs, filled out by
the shipper, and labeled “for the carrier” and “for the consignee”.

both the shipper’s and carrier’s signature may be printed or
stamped, thereby facilitating electronic recordation.

shipper may request from a carrier using an electronic processing
shipper system a cargo receipt identifying the shipment and
access to information contained in the electronic record.
2.
MP4 – if the shipper consents, carriers may substitute
computer entries for paper AWBs, thereby allowing carriers to expand the electronic
processing systems already in use for domestic cargo shipments.

for paper AWBs, there must be three original AWBs, filled out by
the shipper, and labeled “for the carrier” and “for the consignee”.

both the shipper’s and carrier’s signature may be printed or
stamped, thereby facilitating electronic recordation.

shipper may request from a carrier using an electronic processing
system a cargo receipt identifying the shipment and access to
information contained in the electronic record.
3.
Hague – there is no provision for electronic AWBs: shippers
must use paper AWBs.

there must be three original AWBs, filled out by the shipper, and
labeled “for the carrier” and “for the consignee”.

shipper’s signature may be printed or stamped; carrier’s signature
may be stamped (not printed).
4.
Warsaw – there is no provision for electronic AWBs:
shippers must use paper AWBs.

there must be three original AWBs, filled out by the shipper, and
labeled “for the carrier” and “for the consignee”.

shipper’s signature may be printed or stamped; carrier’s signature
may be stamped (not printed).