Mar 26, 2008

Greater Protection for Australians Travelling Abroad

Greater Protection for Australians Travelling Abroad

MEDIA RELEASE – The Hon Anthony Albanese MP

Minister for Infrastructure, Transport,

Regional Development and Local Government

26 March 2008

The Rudd Labor Government is moving quickly to give Australians travelling overseas on international airlines access to fairer compensation in the event of an airline accident, following nine years of inaction by the previous government.

Today I introduced into the Parliament the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill which implements the 1999 Montreal Convention, a multilateral aviation agreement that updates the potential liability of international carriers.

The Convention includes new, tougher liability arrangements for:

  • The death or injury of a passenger;
  • The loss or damage to a passenger’s baggage;
  • The loss or damage to a freight shipment; as well as
  • Delays to the scheduled arrival of a passenger, baggage or freight.

The new scheme makes it easier for Australians to seek fair and timely compensation – a big step forward in consumer protection.

Under the Montreal Convention airlines could be required to compensate passengers for all proven damages. This compares to the old system where passenger compensation was potentially capped at an amount set in the 1920s and in a currency which no longer exists.

What’s more, the cap on liability is removed entirely for personal death and injury, unless the airline is able to prove the damage was not caused by negligence.

Already, 86 countries have ratified the Convention including most of Australia’s major aviation markets. In fact, Australia is the only OECD country not to have signed or ratified the Convention, with the USA, Japan, China and New Zealand having ratified it in 2003 and the UK and most European Union countries doing so 2004.

This is yet another example of where the previous Howard Government turned its back on the international community to the detriment of the Australian public.

The new scheme will also benefit airlines by slashing the paperwork associated with passenger and cargo transportation, clearing the way for modern electronic billing systems.

To cope with the grossly inadequate liability limits under the previous international arrangements, many international airlines have already voluntarily begun operating under more generous liability arrangements. As a result, the new arrangements are not expected to increase travel or insurance costs.

The multi-national Montreal Convention was negotiated in 1999 and applies to flights between countries which have signed on to the scheme.

It is expected to become operational on flights out of Australia within six months of the Bill passing the Parliament and Australia finalising treaty processes.

The Montreal Convention updates the liability arrangements of international air carriers.  This includes the liability arrangements for:

  • the injury or death of a passenger;
  • the loss or damage to a passenger’s baggage;
  • the loss or damage to a freight shipment, and
  • delays to the scheduled arrival of a passenger, baggage or freight. 

The Montreal Convention modernises these arrangements to ensure equitable compensation is available to passengers.

Australia is the only OECD country not to have signed the Convention, with the USA, Japan, China and New Zealand having ratified it in 2003 and the UK and every European country doing so 2004.

Old Warsaw System

Modern system – Montreal Convention

Liability Limits

Capped

Unlimited

Claim process

No requirement for passengers to prove fault, but airlines may have access to defences to avoid paying compensation.

No requirement for passengers to prove fault for the first $180,000 of a claim1.

Airlines also liable for damage above $180,000 unless they prove that they are not at fault.

Other Features

The cap on claims was set in 1929, and is set in a currency that no longer exists (the ‘franc poincare consisting of 65.5 milligrams of gold of millesimal fineness 900’).

The liability cap has not been adjusted for inflation. This could potentially result in claims capped at US$10,000.

‘No fault’ threshold determine by ‘Special Drawing Right’ – a basket of international currencies

‘No fault’ thresholds reviewed every five years.

Without proving fault, passengers could claim up to $1,800 for lost baggage, $180,000 for injury or death, $8,000 per person for delays, and $31 per kg for cargo.

1 $180,000 is an approximate figure based on the current exchange rate for the ‘Special Drawing Right’.

Further information on the Montreal Convention is available at:

http://www.infrastructure.gov.au/aviation/international/liability.aspx

Media Contact: Jeff Singleton 0410 476 890

Thursday, 20 March 2008