New Aviation Liability Laws Passed by Australian Parliament


Further to our newsletter dated 4 October 2012, the Aviation Legislation Amendment (Liability and Insurance) Bill 2012 (Cth) was passed by the Australian Parliament on 27 November 2012. The Bill will amend the Civil Aviation (Carriers’ Liability) Act 1959 ("CACL Act") and the Damage by Aircraft Act 1999 in a number of respects.

Changes to the Civil Aviation (Carriers’ Liability) Act 1959

Increasing the liability limit and insurance requirements

The liability limit for death or injury to domestic passengers will increase from A$500,000 to A$725,000. The limit of liability for Australian domestic injury or death claims remains unbreakable.
In line with the liability limit increase, the level of mandatory insurance air carriers are required to have in place under Part IVA of the CACL Act for domestic flights will increase from A$500,000 to A$725,000 per passenger.

No compensation for pure mental injury on domestic flights

The reference in section 28 of the CACL Act to liability for "personal injury" will be substituted with "bodily injury". The term "personal injury" has been interpreted by Australian Courts much more broadly than the phrase "bodily injury" used in the Warsaw and Montreal Conventions, and was said to include certain mental injuries whether or not accompanied by physical injury (see for example, South Pacific Air Motive Pty Ltd v Magnus and Others (1998) 157 ALR 443).

This amendment will exclude liability for purely mental injury arising out of domestic carriage, and ensure that compensation for injuries is treated consistently for both domestic and international aviation.

Changes to the Damage by Aircraft Act 1999

No compensation for pure mental injury

Claims for compensation for mental injury will be excluded unless the person suffers other personal injury or property damage. This amendment is intended to address industry concerns that carriers may be exposed to potentially large groups of claimants who could witness an air crash and obtain unlimited damages for mental injuries on a strict liability basis.

Right of Contribution and Contributory Negligence

Previously, Australian Courts applied a broad interpretation to the strict liability regime contained in the Damage by Aircraft Act and precluded aircraft owners and operators from claiming a reduction in assessed damages for an injured person’s own contributory negligence, or claiming a contribution from another liable party (see ACQ Pty Ltd v Cook [2008] NSWCA 161).

The Damage by Aircraft Act will be amended to recognise contributory negligence, allowing compensation payments to be reduced where a victim is partly responsible for the loss or damage. It will also enable defendants to seek contribution from other parties who may have contributed to the loss or damage suffered by a person bringing a claim.

Commencement

For an Act to become operative, it requires Royal Assent by the Governor-General, and this is usually between 7 and 10 working days after Parliament has passed the Act. The substantive provisions of the legislation will come into force on a day to be fixed by proclamation, and no later than 6 months after the Bill receives Royal Assent. We will advise when this occurs.

This article was written by Simon Liddy, Partner and Kristin Hibbard, Associate.

For information on our Aviation Group click here.

Important disclaimer: The material contained in this publication is of a general nature only and is based on the law as at 30 November 2012. It is not, nor is intended to be, legal advice. If you wish to take any action based on the content of this publication we recommend that you seek professional advice.