Thailand takes a bold step in compensating injured airline passengers

Last year we encouraged countries emerging as tourist destinations to increase compensation to airline passengers injured on both domestic flights (intra-country) and flights between countries (intern

Thailand takes a bold step in compensating injured airline passengers

Last year we encouraged countries emerging as tourist destinations to increase compensation to airline passengers injured on both domestic flights (intra-country) and flights between countries (international) [see China and other emerging destinations need to raise limits for aviation accidents, www.eturbonews.com (3/13/2014)]. It is encouraging to note that Thailand recently enacted an International Air Carriage Act scheduled for implementation on May 16, 2015 [English translation available at lawdrafter.blogspot.co.at/2015/03/2558-c-2558.html]. In this article we shall examine this modern remedial statute and compare it to how other countries compensate aviation accident victims.

Travel Law Update
Uber In China

In Mozur & Isaac, Uber Spends Heavily to Establish Itself in China, nytimes.com (6/8/2015) it was noted that “Uber is spending at a breakneck rate to crack the China market-even paying its drivers more than the fares they collect. Fat with almost $6 billion in venture capital, Uber…is doling out bonuses up to three times the amount of its fares, in a bet that its exceptional rise in the United States can be matched in China. So Far, its strategy is working, shattering prevailing assumptions that young American tech companies cannot compete against local rivals. The spending spree has attracted droves of divers like Jacky, a systems analyst at an international telecommunication company, who recently began moonlighting for Uber with his Ford Fiesta in Shanghai. In late May, Uber said it had created more than 60,000 jobs in China over the past month, with the spread of its service spurring protests from some taxi drivers…While China represents hugh scale as a market…Uber…operates in more than 310 cities and 58 countries worldwide, faces homegrown Chinese rivals like Didi Kuaidi, which has more than 90 percent of the market and is backed by two of the largest Chinese Internet companies, Alibaba and Tencent. It also may have to grapple with a fickle central government that could shut it out of the market overnight”.

Another Airbnb Host Profiteering

In When is the rental of an apartment by an Airbnb host ‘profiteering?’, www.eturbonews.com (3/26/2015) and Airbnb in New York City: The host with the most lawsuits, www.eturbonews.com (6/18/2015), we discussed lawsuits brought by landlords in New York City seeking to evict tenants that rent space in their apartments to Airbnb guests. In a recently reported case, Bpark, LLC. v. Durena, New York Law Journal, 5/6/2015, p. 1 (Kings Civ.), a holdover summary proceeding seeking to recover possession of an apartment located in Brooklyn, New York, the Court found a violation of the no sublet without permission clause of the lease and “The Court now turns to the issue of profiteering…the credible documentary evidence…establishes that the Apartment was listed and rented out to travelers through the Airbnb website…Accordingly, the court finds that the respondents engaged in profiteering by renting out the Apartment or allowing his children to rent out the Apartment, to a series of short-term transient tenants for commercial purposes on Airbnb. Such brazen and commercial exploitation of a rent-stabilized apartment significantly undermines the purpose and integrity of the Rent Stabilization Law and Code and is therefore incurable…the petitioner is awarded a final judgment of possession”.

Airline Accident Compensation

Let’s start our analysis of Thailand’s International Air Carriage Act by noting how other popular tourist destinations compensate aviation accident victims. First, in the U.S. “(Commercial) [a]ir carriers cannot disclaim liability for their own negligence and they cannot limit negligence liability (damages) in cases involving (wrongful death or) physical injuries [Travel Law 2.05[2]].

Montreal Convention

Second, as we leave the U.S. aboard an air carrier delivering “international carriage” then the Montreal Convention (previously the Warsaw Convention) may apply. The Montreal Convention states that “international carriage means any carriage in which…the place of departure and the place of destination… are situated either within the territories of two State parties (signatories to Montreal Convention) wikipedia.com or within the territory of a single State Party if there is an agreed stopping place within the territory of another State, even if that State is not a State Party. Carriage between two points within the territory of a single State Party without an agreed stopping place within the territory of a State is not international carriage for the purposes of this Convention… Carriage to be performed by several successive carriers is deemed, for the purposes of this Convention, to be one undivided carriage if it has been regarded by the parties as a single operation”.

Preemption And Venue

The Montreal Convention preempts common or statutory law regarding the rights, responsibilities and liability of the parties unless the Convention provides for the application of local law regarding procedure, contributory negligence, wilful misconduct and the nature and quality of recoverable damages. In addition, the Montreal Convention provides for arbitration of disputes [Article 34] and higher liability limits if agreed upon[Article 25]. An action may be brought in (1) the carrier’s domicile, (2) the carrier’s place of business, (3) the place of business where the contract of carriage was entered into, (4) the place of destination and (5) in certain situations the state of principal and permanent residence of the passenger [Article 33].

Article 17 Liability And Damages

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The Montreal Convention provides in Article 17 that “The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking”. Punitive damages are not recoverable under the Montreal Convention and neither are damages for emotional injuries in the absence of physical injury. The Montreal Convention further provides “For damages arising under paragraph 1 of Article 17 not exceeding 100,000 Special Drawing Rights [SDRs] for each passenger, the carrier shall not be able to exclude or limit its liability”. For damages that exceed 100,000 SDRs the carrier will not be liable if the carrier proves it took “all necessary measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures”. The value of SDRs can be determined by reference to the International Monetary Fund website. The Montreal Convention provides an inflation factor and presently the limit is 113,000 SDRs or about $175,800.

Montreal Convention Signatories

As of February 2015, 111 countries including the EU and its member states, China, forwarderlaw.com Ukraine but not Russia and not Thailand [wikipedia.org/wiki/Montreal_Convention] have signed the Montreal Convention.

Intra-Country Aviation

Third, the danger for airline passengers arises when they book domestic flights from and to destinations completely within a given country. As noted, in the U.S. there are no limitations on damages for intra-country aviation accidents. In the EU the present limitation of 113,000 SDRs for wrongful death and physical injuries (as provided by the Montreal Convention) applies not only to international air transportation but to intra-country flights as well [see EU Reg 889/2002 which brought member States in line with the Montreal Convention “irrespective of whether the accident happens on an internal, intra-community or international flight” (see Airline Liability report at citizensinformation.ie/en/travel and_recreation/air_travel/)]. Unfortunately, there is a real lack of readily available information on the extent to which the rest of the world’s popular destination countries allow airlines to limit their liability and damages arising from intra-country aviation accidents. One of the few countries where information is available is China ec.europa.eu/transport/modes/air/safety/air-ban which is a signatory to the Montreal Convention [strict liability limit at $113,000 SDRs for accidents in international air transportation] but still appears to limit liability for wrongful death in intra-country aviation accidents to 400,000rmb [see Provisions on the Limited Compensation Liabilities of Carriers in Civil Aviation Transport (2006) at lawinfochina.com] or about $66,666 at an exchange rate of $1=6 rmb which is little different from the $20,000 maximum damages allowed by Chinese law to two Americans killed in a crash of a Chinese plane en route from Nanking to Beijing in 1985 (see Barkanic v. General Administration of Civil Aviation (“Chinese law, which limits an airline’s liability for wrongful death of a non-citizen to $20,000″)].

Thailand’s International Air Carriage Act

The easiest way for Thailand and other popular destination countries to raise international aviation accident compensation rates is by becoming a signatory to the Montreal Convention thus joining 111 other parties. What Thailand has done, however, is to adopt most of the best features of the Montreal Convention for both international air carriage and domestic or intra-country air transportation as EU member states have done [without signing any treaties] including liability limits for passenger delays and loss or damage to baggage and cargo, strict liability up to 113,000 SDR’s for passenger injuries and two year statute of limitations [English translation available at lawdrafter.blogspot.co.at/2015/03/2558-c-2558.html].

Questions Raised

While Thailand’s International Air Carriage Act [the Act] is a giant step forward in raising aviation accident compensation rates and may be much appreciated by foreign tourists and Thai citizens, the are a few questions about its actual utility [see e.g., the analysis of Watson Farley & Williams, Bangkok To Montreal…Going All The Way? Deviation Or Direct (2015) at wfw.com/wp-content/uploads/2015/03/wfn-aviation-Bangkok toMontreal-March 2015.pdf [WFW article]. For example, the Montreal Convention provides for five different venues in which an injured passenger may bring a lawsuit. Thailand’s Act does not provide such a choice but may require all aviation accident cases to be brought in the Central Intellectual Property and International Trade Court in Bangkok. Nor does Thailand’s Act incorporate the Montreal Convention’s reliance on local law for questions of procedure. Nor does the Thailand Act allow for the parties to resolve their disputes through arbitration.

Conclusion

Thailand to be congratulated for enacting an International Air Carriage Act which incorporates many of the best features of the Montreal Convention. As noted in the WFW article amendments may be forthcoming to answer the questions noted above. Stay tuned.

The author, Justice Dickerson, has been writing about Travel Law for 39 years including his annually updated law books, Travel Law, Law Journal Press (2015) and Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2015), and over 350 legal articles. For additional travel law news and developments, especially, in the member states of the EU, see IFTTA.org.

This article may not be reproduced without the permission of Thomas A. Dickerson.

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