Opinion of the Economic and Social Committee on the ' Proposal for a Council Regulation (EC) on air carrier liability in case of air accidents'
Date: 1996-05-29
Institutions: European Economic and Social Committee
Subjects: air transport, damages, international convention, liability, transport accident













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51996AC0697

Opinion of the Economic and Social Committee on the ' Proposal for a Council Regulation (EC) on air carrier liability in case of air accidents'  


Official Journal C 212 , 22/07/1996 P. 0038 





Opinion of the  Economic and Social Committee on the 'Proposal for a Council Regulation (EC) on air carrier  liability in case of air accidents` ()(96/C 212/09)On 26  March 1996, the Council decided  to consult the Economic and Social Committee, under Article  84(2) of the Treaty, on the  above-mentioned proposal. The Section for Transport and Communications, which was responsible for preparing the Committee's  work on the subject, adopted its Opinion on 13  May 1996. The Rapporteur was Mr Moreland. As its 336th Plenary Session (meeting of 29  May 1996), the Economic and Social Committee adopted  the following Opinion by 83 votes for, 2 votes against and 2 abstentions. 1. Introduction1.1. The Warsaw Convention of 1929 was a significant landmark in  international aviation. Essentially it represented a deal between the airlines and the travelling  public (represented by national governments) in the case of accidents occurring during  international carriage by air. Normally the burden of proving fault lies with the claimant. The  Warsaw Convention reverses this procedure. The airlines accept fault unless they can prove that  they had taken all necessary measures to avoid damage. To balance this reversal of the normal  burden of proof, airline liability was limited unless the claimant could prove 'wilful  misconduct`. 1.2. The Convention also provided a single set of rules governing liability, thereby eliminating  conflicts that would otherwise arise between the laws of individual countries. This was of  considerable assistance to the travelling public and airlines in the event of accidents. Since 1929  the Warsaw Convention has been amended and supplemented by several other agreements, notably the  Hague Protocol (1955), the Guadalajara Convention (1961), the Montreal Agreement (1966), the  Guatemala Protocol (1971) and the Montreal Protocols (1975). Not all of these agreements have come  into force because of the failure of sufficient states to ratify them. 1.3. The Warsaw Convention and subsequent related agreements have been a success. However,  increasingly, problems have arisen. In particular, with the passage of time the limits on liability  have become unacceptably low, despite attempts to raise them. This has led to several countries  replacing the Warsaw limits, thereby removing one of the principal benefits of the Warsaw approach,  its near universal applicability. It has been evident for some time that radical changes would be  needed if the whole system was not to collapse. The US administration has indicated the need for  new rules. IATA has agreed a solution: the main features are that limitation of liability is waived  and that damages can be determined and awarded by reference to the law of the domicile of the  passenger. Signing carriers must implement the provisions by 1  November. 2. Commission proposal2.1. The European Commission's proposed regulation departs from Warsaw in  several respects. First, it introduces unlimited liability for passenger accidents. (No changes are  proposed for baggage and cargo.) Secondly, up to a liability of ECU 100 000 it removes an airline's  defence under Article  20(i) of the Warsaw Convention. This Article enables an airline to be  exonerated from liability if it can show that the damage was caused by the negligence of the  injured person or if it took all necessary measures to avoid the damage or that it was impossible  for such measures to be taken. However, in practice these defences are extremely difficult to  sustain and in any case following the 1966 Montreal Agreement airlines operating to/from the United  States have been required to waive them. 2.2. The proposed Regulation also provides for advance lump sum payments in the event of an  accident. No later than 10 days after an accident an airline must pay up to ECU 50 000 to any  person entitled to compensation. In addition, the established rules on jurisdiction would be  supplemented. Under Warsaw claims for compensation must be brought in one of four places: - the State where the airline is domiciled; - the State where the airline has its principal place of business; - the State of the place of ticketed destination of the passenger; or- the State where the  contract of carriage was entered into. 2.3. The Regulation would add to this list the State where a passenger has his 'domicile` or  'permanent residence`. 2.4. The draft Regulation provides also for the liability limits to be increased by the Commission  following consultation. 2.5. The proposal would apply only to Community airlines. Non-Community carriers would be required  to make clear to passengers at the time of ticket purchase and at check-in-counters within the EU  that their liability rules were different from those applicable to Community carriers. Finally, the  proposed rules would extend to domestic air services within the EU. At present the Warsaw system  (and the tentative IATA system) covers only international journeys. 3. General comments3.1. The reform of the Warsaw system is long overdue. The IATA approach is  welcomed but is limited and (at time of writing) signed by only 29 airlines. Consequently the  Commission's proposal is to be welcomed. However the Commission approach needs amendment particularly to deal with: - difficulties over the advance payment provision; - legal interpretations over the words 'domicile` and 'permanent residence`; - the need for proof of fault; - possible effects of higher costs on smaller airlines; - the limitation to EU carriers; - the need to protect the interests of and provide clarity for the user. 3.2. The above limitations (which will be commented on in detail in section 4) need to be addressed  with a view that the final regulation will act as a catalyst for a new, more appropriate world-wide  system for the benefit of the travelling public. 4. Specific comments4.1. Article  1The 'Third Air Package` () and the trend of legislation  under Article  84(2) has been by way of a regulation. Consequently, as the proposal should be  introduced in a uniform manner across the European Union, the Committee supports the need for a  regulation as opposed to a directive, but believes that this places an onus on the Council and  Commission to ensure the new legal rights and obligations are clear and fully defined. 4.2. Article  2'Domicile` and 'permanent residence` are defined in the Brussels Convention () and  to avoid confusion these definitions should be repeated in Article  2. Different Member States  apply different tests of domicile or permanent residence and it is possible that a passenger may be  able to establish domicile or permanent residence in more than one Member State. 4.3. Article  44.3.1. The Committee welcomes the concept of swift payment of a lump sum to deal  with immediate costs. However, the Committee is concerned that the proposal will be unworkable  unless it is clear as to how certain difficulties will be met. For example, it can take time to  identify victims and trace relatives. There may be difficulties in establishing who is entitled to  payments. In addition, in the case of injury rather than death, what proportion of the advance  payment is to be made? Who decides? The Committee accepts the need to set aside money within ten  days of an accident, but the Commission should provide more detail of how and when payments are to  be made. 4.3.2. The Committee welcomes the move to unlimited liability for passenger accidents. However, as  the proposal will have some effect on costs - particularly for smaller airlines - the Committee  considers that, for higher levels of payment, proof of fault may be justified. 4.4. Article  5The Committee stresses the importance of clear information for the airline user.  The requirement that non-Community carriers must make clear to passengers (beyond printing the  information on tickets) that they do not apply the EU rules is likely to cause numerous problems  and be difficult to enforce. The Commission needs to conduct further consultations about the  practical implications. 4.5. Article  6The article needs rewriting to make clear to which airlines it applies -  presumably, those not based in countries covered by the Third Air Package. 4.6. Article  7The Committee welcomes this Article. However it underlines the need for a clear  definition of 'domicile` and 'permanent residence`. 4.7. Article  9The Commission should also consult airline, insurance, user and other relevant  organizations. A report should be produced after, say, 3 or 4 years for the Council, Parliament and  the Economic and Social Committee on the operation of the legislation. Done at Brussels, 29  May 1996. The Presidentof the Economic and Social CommitteeCarlos FERRER() OJ No C  104, 10. 4. 1996, p.  18.  () OJ No L 240, 24. 8. 1992; ESC Opinion (OJ No C 169, 6.  7.  1992, p.  15).  () OJ No L 299, 31. 12. 1972, p. 32; OJ No C 97, 11. 4. 1983, p.  1.