Dennis Jensen (Tangney, Liberal Party) Share this | Hansard source

I am afraid that my speech will be nowhere near as ‘punny’ as the member for Moreton’s. I am pleased to speak in support of the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Bill 2008, the intention of which is to modernise and consolidate the raft of inconsistencies and variations which currently prevail under the Warsaw convention—which was negotiated, as the member for Moreton mentioned, in the early years of aviation and came into force in 1929—and other subsequent conventions. My colleague the Hon. Warren Truss MP, the shadow minister for transport, has already underlined the principal reasons why the coalition is supporting the bill. I shall add my observations on this welcome legislation.

With this bill the government has put the finishing touches to all the former government’s preparatory work and genuine consultation that preceded it. We on our side of the House have a natural reservation when it comes to conventions and treaties, and we wish to ensure first and foremost that they benefit the Australian people and would have their support. Some international agreements are signed mainly to express support or make a symbolic gesture. On the other hand, this legislation will have a definitive concrete benefit for those Australians flying overseas. I understand that something like two million overseas trips are made each year by Australian air passengers, and this will no doubt continue to increase. Therefore, the number of people this legislation could affect is quite significant.

Judging by the information that has been provided on this bill, there appear to be many benefits for Australia and few, if any, negative effects, which should always be the main consideration when deciding whether or not to support such legislation. From my understanding, the situation as it currently stands is not acceptable. There are a patchwork of conventions, rules, protocols and practices which, in many cases, lead to lack of certainty about precisely what the responsibilities and liabilities are for international air carriers. Also, there is the prospect of those injured, killed or in other ways affected by events connected to international air travel, such as lost luggage, having to launch costly and protracted legal action against large companies. This legislation should provide certainty for carriers, passengers and regulators as to precisely what the rules are pertaining to loss and injury and ensure a more simplified, user-friendly system for resolution of such cases.

The first problem with the current situation is related to certainty and ease of access to damages on the part of victims of accidents or other unfortunate circumstances. There is a two-tier system of liability proposed for death and injury. Of course, we in Australia are familiar with this sort of system. Many states have had a similar system in workers compensation for years. The first tier is a no-fault area, where no proof of negligence or error need be proved but where there is a legislated cap on the amount which can be awarded. This threshold is most important when assessing whether the ultimate result will be increased costs to the carriers, which would of course be passed on to the travelling public. The threshold must be high enough to provide fair compensation and to limit the number of instances which need resolution in the courts and low enough to ensure that carriers do not face increased insurance premiums. The second tier would only be available when loss or damage was incurred solely due to negligence or a wrongful act on behalf of the carrier, its servants, its agents or a third party. I believe that this is an eminently sensible resolution of the thorny problem of liability, damages and legal proof.

The second problem was a farrago of regulation combining the remnants of the Warsaw system, which in itself permitted higher limits of liability with other arrangements; therefore, there was no consistency. There was dissatisfaction with the low liability limits set by the Warsaw convention and The Hague protocol and with the inability of the international community to agree on higher ones, which often led to various measures to get around those limits.

Another cause of confusion was the reliance on a provision of the Warsaw convention that permits a carrier and passenger to agree by special contract to a higher limit of liability. Many carriers agreed among themselves to apply an increased liability limit or to waive liability limits. To this end, private agreements and voluntary arrangements among air carriers were developed, notably within the International Air Transport Association, IATA. Japanese airlines also abandoned liability limits. Some countries took action in relation to their own airlines. For example, Australia imposed higher liability limits on Australian carriers, although its obligation under the Warsaw system prevented it from opposing the same limits on foreign carriers.

Another cause of complication was the fact that different Warsaw parties adopting differing amending instruments resulted in a complex array of international arrangements. For example, Australia is a party to the Warsaw convention as amended by The Hague protocol, the Guadalajara convention and Montreal protocol No. 4. Indonesia is a party to the Warsaw convention as amended by the Guadalajara convention. Having had a tooth taken out last week does not help with pronouncing some of these words, I can tell you. If an accident occurs on a flight for which Australia is the country of departure and Indonesia is the country of destination, the applicable international law is the Warsaw convention as amended by the Guadalajara convention, the liability limits being those in the Warsaw convention. However, if Australia is the country of departure and France is the country of destination, the applicable international law is the Warsaw convention as amended by The Hague protocol and the Guadalajara convention, the liabilities being those of The Hague protocol. These are the instruments to which both France and Australia are parties.

In Australia, there was further relevant legislation. In addition to the Civil Aviation (Carriers’ Liability) Act, a voluntary industry code, being the Code for the Preparation of Airline Family Assistance Plans, sets out the minimum standards for airlines operating to and from Australia in giving assistance to victims and the families of victims in the event of a major civil aircraft accident involving loss of life or serious injury. It should be noted that the provisions of the carriers liability act applying to a non-Montreal convention international flight—that is, between Australia and a country that is not a party to the Montreal convention—would remain unchanged. The provisions of the act applying to domestic flights would also remain unchanged.

That was an unworkable nightmare which had to be rationalised and put on a firm logical and legal footing. I do not agree that Australia should blindly follow other countries simply because that is what Europe or the United States is doing. However, in this case the policy is correct and it would help untangle an almost impenetrable and unworkable maze of regulations and laws.

Another complication under the existing system is that of jurisdiction. Under the pre-Montreal convention Warsaw system, claims for damages can be heard in one of four jurisdictions: a court in the state where the carrier is ordinarily resident; a court in the state where the carrier has its principal place of business; a court in the state where the carrier has an establishment by which the ticket was purchased or contract was made; and, finally, a court in the state of the passenger’s destination.

Article 33 of the Montreal convention provides for a ‘fifth jurisdiction’. It allows an action for damages for the death or injury of a passenger to be brought in the country where the passenger had his or her principal and permanent residence at the time of the accident, if it is a country to or from which the carrier operates and where it has premises. This would give most Australian citizens access to Australian courts to pursue claims in relation to flights to which the Montreal convention applies.

There are other areas which have been modernised and improved to the benefit of the flying public. Under the Warsaw convention the limits of damages were expressed in terms of the somewhat esoteric and arcane Poincare gold franc, which was linked to the gold standard. This standard has now been abandoned and establishing the monetary value of a claim has been somewhat of a raffle, with courts in different countries adopting different approaches to determining the exchange rate. We now have one uniformly agreed unit—the SDR, or special drawing right. One SDR is roughly the equivalent of A$1.72. Put simply, tier 1 claims can be up to 100,000 SDRs, or about A$172,000. Every other member country can translate SDRs into their own currency, but it is clear to everyone what the limit is. Another significant improvement is to widen the definition of family to include, for example, partners, a de facto spouse, wards, grandchildren, grandparents, step- and half-brothers and step- and half-sisters, and guardians.

Travellers will by now be familiar with electronic documentation. This is already being widely used by the aviation industry for both passenger ticketing and cargo movement, but it does not meet the requirements of the Warsaw convention. The Montreal convention provides for simplified documentation. It eliminates the need for cargo consignors to complete detailed paper based air waybills and so allows simplified electronic records to be used. As long as the passenger or consignee has adequate evidence of the contract and provided it is in a form that meets the requirements of border control agencies, there is no reason why documentation should not be electronic.

Usually the first question asked when changes are proposed is: what will they cost? There are minimal financial implications for the Australian government from the bill. There are no ongoing administrative costs. Where the Commonwealth is the operator of an aircraft, liability, in the event of an accident, for the death or injury of a passenger may be higher under the Montreal convention than it would be under existing international obligations. Adoption of the Montreal convention provisions is not expected to increase insurance premiums for Australian international carriers or foreign international carriers. Apart from the effect of the intercarrier agreements, insurers, in setting premiums for carriers that operate into the USA, already factor in the possibility of US courts deciding that the carrier or its agents have engaged in wilful misconduct and that liability limits therefore do not apply. Carriers and consumers will also benefit from the fact that the Montreal convention expresses liability limits in SDRs. This removes existing uncertainty about the values to be applied resulting from disagreement on the way in which the obsolete gold franc amounts in the Warsaw system instruments are to be converted.

The other important question is how the legislation and regulations will operate. As any regulations will be a disallowable instrument, parliament will maintain oversight. Article 24 of the convention provides for five-yearly reviews of liability limits to account for inflation. As regulation changes can be disallowed, this will ensure that parliament retains oversight of such amendments. At the same time, having such a facility will allow the government to bring amendments into force more quickly than through primary legislation, allowing continuing consumer protection in line with international practice.

In summary, this is an excellent and much-awaited improvement to the legal framework in which international airlines operate. As of February 2008, Australia will be joining 86 state parties to the convention, including Australia’s key aviation partners, such as the United States, New Zealand, Canada, Japan, the United Arab Emirates and the European Community and its member countries. I welcome this legislation and encourage members to support it.

Debate (on motion by Mr Marles) adjourned.

See this speech in context