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There is no specific proposed date. Accession will take place on the passage of the necessary legislative amendments.
Air carrier liability is governed by the Convention for the Unification of Certain Rules Relating to International Carriage by Air, the “Warsaw Convention” of 1929. It is the most widely ratified of any international agreement governing private law issues. The Convention is given effect in New Zealand domestic law through the Civil Aviation Act 1990.
The Warsaw Convention set a level of liability that was limited in exchange for reversal of the burden of proof. That is, instead of the claimant having to prove fault on the part of the airline, the airline had to disprove fault in order to avoid paying compensation for death or injury to passengers or loss or damage to baggage or cargo. The reason behind this internationally consistent regime was to provide certainty and reduce legal costs that were present when liability was unlimited but individuals had to prove the airline was at fault.
While the Warsaw Convention has worked relatively well for seventy years, it has with the passage of time become outdated, fragmented and in great need of reform.
A longstanding problem with the Warsaw Convention has been that it sets limits of liability that are now considered to be far too low. The liability of the carrier for each passenger is limited under the 1955 Hague Protocol to the Warsaw Convention to the equivalent of approximately NZ$44,500.
The international civil aviation community has been working for some years to reform the Warsaw System. Previous attempts were stymied by difficulties various countries had with the solutions proposed. States imposing their own limits of liability on air carriers have exacerbated fragmentation of the Warsaw System.
Realisation that the Warsaw System was degenerating into relative disorder and the general desire for modernisation and consolidation resulted in a renewed attempt to reform the system. In 1997 the International Civil Aviation Organisation (ICAO) Legal Committee met to formulate a new draft Convention and after further meetings in 1998 and early 1999, a Diplomatic Conference was held in Montreal in May 1999 with the ambition to adopt a new Convention. 121 states attended the Conference, which resulted in the adoption of a new ‘Montreal Convention’.
The Montreal Convention is a significant advance over the existing system. It has the following major features:
The major advantage of the new Convention is that passengers and their families would find it easier to claim compensation in the case of air accidents involving international travel. It should allow for the early settlement for the vast majority of claims, without the need for lengthy and costly litigation. Another significant improvement for passengers is encouragement of the provision for advance payments.
The arrangements for air cargo (including allowing electronic documentation) are essentially unchanged from the provisions of the Warsaw System’s Montreal Protocol No.4, which New Zealand has now provided for in its legislation.
The provision for five-yearly revisions of liability limits is important to ensuring that the amounts of compensation remain appropriate for the future. The obsolete liability limits dating from 1929 and 1955 were a significant reason for the fragmentation of the Warsaw System, and revisions should mean that this should not be a problem for the Montreal Convention system.
An additional ‘fifth jurisdiction’ would be of some benefit to New Zealanders, in enabling our residents to have a home forum for court action that would be more convenient than pursuing action in a faraway country and the costs that would involve.
There should be no disadvantages for New Zealand in bringing into force the Montreal Convention.
Were New Zealand not to bring the Montreal Convention into effect, we would continue to be subject to an outdated and fragmented system for international air carrier liability, to the potential detriment of airlines and their customers.
There are no additional obligations imposed on New Zealand that do not already exist under the Warsaw Convention. This treaty action seeks to modernise and consolidate the existing obligations.
There should be significant economic benefits to passengers and their families (and, by extension there should be benefits to New Zealand as a whole) in bringing the Montreal Convention into force. It should make it easier to claim compensation and should allow for the early settlement for the vast majority of claims, without the need for lengthy and costly litigation. Five-yearly revisions in liability limits should ensure that levels of compensation remain appropriate in the future. Allowing the use of electronic cargo documentation should reduce costs to airlines and their customers.
There should be no social, cultural, or environmental effects for New Zealand in bringing the Montreal Convention into force.
There are no financial implications for New Zealand of compliance with the Montreal Convention. The costs of compliance to business are also unlikely to increase. There were concerns expressed at the Diplomatic Conference regarding the ‘fifth jurisdiction’ (mainly by developing states) of some foreign airlines potentially being bankrupted by being sued in the United States legal system. This is less of a concern to Air New Zealand as it operates commercially in the United States and is therefore already exposed to potential court action and is appropriately insured. It is also important to note that punitive damages are not allowed under either the Warsaw System or the new Convention.
The Montreal Convention was developed specifically to modernise and consolidate the existing Warsaw System. It was not envisaged at the Diplomatic Conference that the Convention would require further amendment in the immediate future. In fact, it was the view of participants that if anything the new Convention should be robust enough to stand the test of time far better than the Warsaw System. The provisions relating to the automatic adjustments of liability limits should assist in ensuring that the limits do not quickly become outdated, which was a major reason why the Warsaw System fell into disrepute and became fragmented.
The Government proposes that New Zealand should ratify the Montreal Convention and that the Civil Aviation Act 1990 should be amended accordingly by way of a Civil Aviation Amendment Bill.
Comment was sought from Air New Zealand Ltd, the Board of Airline Representatives of New Zealand, and the New Zealand Federation of Customs Brokers and Freight Forwarders. All are in favour of this treaty action.
Any Party may denounce the Convention by notification addressed to the depository (International Civil Aviation Organisation). Denunciation shall take effect 180 days months after the date of receipt by the depository.
