The issue of compensation to the families of Airblue crash victims has resurfaced after the release of the investigation report into the reasons leading to the fatal Airblue crash of July 28, 2010.
As the inquiry by the Safety Investigation Board revealed negligence of pilots behind the fatal flight ED202 crash, the Airblue may have to face more severe financial and legal complications in the settlement of insurance claims.
The flight from Karachi to Islamabad had crashed into Margalla Hills, resulting in the death of all 152 passengers onboard.
Following the incident, the Defence Ministry had constituted a tribunal under Rule 273 (1) of Civil Aviation Rules, 1994 to investigate the tragic accident. The investigation team completed and submitted the inquiry report to Civil Aviation Authority (CAA) Director General on March 7, 2011. However, the report was submitted in the Peshawar High Court in December last year.
According to the findings, the aircrew failed to display superior judgment and professional skills in self-created unsafe environment. “In their pursuit to land in inclement weather, they committed serious violations of procedures and breaches of flying discipline, which put the aircraft in an unsafe condition over dangerous terrain at low altitude,” it was stated in the report.
The International Leasing Finance Corporation (ILFC) had leased the aircraft to Airblue on dry lease. It was insured against $35 million under hull insurance with EFU General Insurance Ltd and has London-based Lloyd’s Syndicate behind its back as re-insurance companies.
The Lloyd’s of London is the world’s largest aviation insurance market. It is made up of members of syndicate who underwrite insurance risks together. In aviation market, generally re-insurers are not able individually to carry the larger risks that are attendant to the operation of commercial aircrafts.
Domestic aviation laws regarding compensation in the event of aircraft accident are multifaceted and very complex.
According to Section 4 of the Second Schedule to the Carriage by Air Act, 1934 duly amended with SRO 1033(K)/67 dated May 25, 1967, a passenger of domestic flight is entitled for compensation Rs.39,500 for damages sustained in the event of the death or wound sustained onboard the aircraft or in the course of any operations of embarking or disembarking.
The Contract of Carriage of Airblue says that Rs 1 million are payable as compensation to each victim’s family while the Carriage by Air Act, 2011, which was passed by the Senate in October 2011 and now awaits assent of the president, offers a compensation of Rs 5 million to legal heirs of each passenger.
On the other hand, Rule 179 (2) (c) of Civil Aviation Rules, 1994 requires that each airline seeking permission to operate flights to and within Pakistan shall maintain a comprehensive insurance policy covering aircraft, passengers, cargo, and third party risks at that level required by the ICAO Convention.
A literal interpretation could lead to the conclusion that the Rule 179 (2) (c) has interlinked the air carrier’s liability with ICAO convention without making any difference between a domestic passenger and an international passenger for compensation purpose.
Currently, the ICAO’s Convention for the Unification of Certain Rules for International Carriage by Air – commonly known as the ‘Montreal Convention, 1999’ – is governing the international air carrier liability regime. Pakistan ratified the Montreal Convention, 1999 on 19 December, 2006.
The convention introduced a two-tier liability system. In the first-tier, passenger only has to prove under Article 17 (1) that the aircraft accident caused the death or injury and it took place onboard the aircraft or during the course of any operation and the air carrier is strictly liable under Article 21 (1) to pay 113100 Special Drawing Rights (SDRs) (approximately Rs 15.5 million) as compensation to each passenger.
In the second tier of liability, the air carrier, under Article 21 (2) is also liable for proven damages in excess of 113,100 SDRs, unless the carrier proves that the damage was not caused by the negligence or other wrongful act or omission of the carrier or that the damage was due solely to the negligence or other wrongful act or omission of a third party. In the absence of such proof by the carrier, there is no monetary limit on the amount of recoverable compensatory damages.
Here is also a possibility of conflicts of law that the Rule 179 (2) (c) which requires all domestic and international passengers should be insured against risks as per ICAO conventions; however, amount of compensation for domestic and international passenger is different under the Carriage by Air Act, 2011.
Besides domestic and international aviation laws, aviation insurance is also a complicated issue. In absence of any information about passenger’s liability insurance policy, it is still not clear as how much and under which law the amount of compensation would be determined and settled in case of negligence on the part of air carrier.
The crisis over the passengers’ liability insurance will continue for crash victims as no one is sure that either the airlines has maintained passenger liability insurance for Airblue Flight ED202 under SRO 1033(K)/67, Contract of Carriage, Carriage by Air Act, 2011 or the Montreal Convention, 1999.
The investigation report of aircraft accident is proper for the purpose of fact finding and that portion of the report is admissible in the court for civil liability. But the portion that acts on ‘probable cause’ is not admissible in the court to apportion criminal liability.
If negligence, wrongful act or default of the air carrier or its servants is proven, the compensation amount has no limit and air carrier is liable for ‘proven damages’ on top of basic compensation which victims’ families have already received from the airline.
Important factors that may determine the amount of compensation are: (1) age of the deceased; (2) educational status; (3) employment/business; (4) marital status; (5) loss of dependency; (6) loss of love and affection, among others.
Losses of pecuniary benefits, which the claimant have been deprived on account of negligence of the air carrier, would be assessed based on principles enunciated by the judgments of the superior courts regarding claim under the Fatal Accidents Act, 1955, while the non-pecuniary benefits would be evaluated on the premises of Common Law of Torts and overall compensation amount will be determined based on liability rules under aviation laws.
If the victims’ families, who have already received compensation, feel that they have not been compensated enough, they still have the right to pursue the court and can get more amounts.
The current aviation regulatory framework in Pakistan is outdated and ambiguous. The government should prepare and implement a transparent regulatory framework in Pakistan in conformity with ICAO Conventions and Standards and Recommended Practices (SARPs).
Source: http://www.pakistantoday.com.pk
