Liability Without Limit

Should airlines operating flights to or from points outside the United States be able to limit their liability to passengers who are killed or seriously injured in a plane crash? Or should crash victims and their families have a right to recover fully what they can prove to be their monetary losses?

A few days ago forty-one Senators voted no to the first question and yes to the second one, thereby preserving the present system of liability without limit. Since more than one third of the Senate voted this way, the so-called “Montreal Protocols” to the 54 year old Warsaw Treaty Convention were defeated. The Senate does not ordinarily reject Treaties submitted to it by the White House. This was the first such rejection of a Treaty since 1960 and for good reasons.

Presently airlines insure themselves for $400 to $500 million per accident — enough to compensate each victim with at least $1 million if a fully loaded B-747 crashed with no survivors. The transferred cost to passengers for this insurance coverage amounts to less than 30 cents per passenger trip. Now comes the airline industry, backed by the Reagan Administration, to propose that their liability on international flights be limited to about $100,000 per person. Then, to supplement the compensation ceiling to about $300,000 the airlines want to impose a $2 per passenger trip fee for a crash fund for victims.

In plain language, the airlines want airline passengers to pay about seven times more money than is now the case in return for lower damage recoveries and the surrender of the right to sue the airlines for “willful misconduct.” This strategy may be called: “how to make legal what consumers might call a first class rip-off.”

Of course the Reaganites and the airlines explain their support of limited liability limits in other ways. The treaty, they say, is important for smooth international aviation relations with other nation’s airlines. The treaty, they insist, would provide for prompt, certain recovery without having to prove fault and would also reduce the contingent fees of the dreaded trial lawyers.

In the Senatorial debate, proponents of the Reagan position repeatedly tried to justify giving consumers less while making them pay more by waving the dreaded trial lawyers flag. When several consumer groups came out against the Montreal Protocols, that ploy was considerably muted. For the issue was not just the fair need to provide adequate compensations in such airline crashes. There is also the important social value of deterrence which keeps the airlines more on their safety toes.

It is the uncertain prospect of unbudgeted for costs, flowing from a legal system of unlimited liability, which helps to deter negligence and other sloppy construction, maintenance and operations of aircraft. Once the airlines can totally limit their liability and make the passengers totally pay for crashes in advance, that extra effort in their safety planning and investment may be lost.

Over the past 35 years, trial lawyers representing crash victims have obtained large amounts of internal airline-company information about deficiencies in their safety operations. These documents and depositions have sometimes been widely publicized and more frequently have been brought to the attention of the airline safety regulators in Washington. This flow of information helps to improve safety standards and to place the bright rays of publicity on inadequate practices or engineering designs in the industry.

Predictably these feedbacks provide discomfort within airline executive hierarchies. It is so much more comfortable and conducive to untroubled weekends for the Montreal Protocols to become inter­national law.

The Senate widely thought otherwise. But before we take our hats off to a rare pro-consumer decision in that institution, careful note needs to be taken of Senate majority leader, Senator Howard Baker (Rep. – Tenn.) who switched his vote at the last instant to the pro-consumer side. With this tactic, he is now able to push for a reconsideration vote on the Senate floor at some later date, presumably after the White House tries to bend a few elbows.

If you want a list of Senators who voted to retain the consumers’ right to unlimited liability of the airlines, write to the Aviation Consumer Action Project, Box 19029, Washington, DC 20036. Who knows, your Senators may be entitled to your praise. With that recognition, they will be less susceptible to calls from the White House.

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