Status Quo for Limits of Liability under Montreal Convention

The Montreal Convention of 1999 (“MC99”) establishes liability limits for commercial aircraft operators for damages in relation to the international carriage of passengers, baggage and cargo.  Article 17 provides that the carrier is liable for the death or bodily injury of a passenger involving an accident which occurs on board the aircraft or in the course of embarking or disembarking.  MC99 also provides that the operator may be liable for damage or loss to baggage or cargo and for delay.  Articles 21 and 22 of MC99 set out limits to the amount of this liability.  These limits are expressed in Special Drawing Rights (“SDRs”), an international “currency” established by the International Monetary Fund.  The value of a SDR is calculated in reference to a selection of the major currencies in the world’s trading and financial systems.  Currently, the selection includes the U.S. dollar, Euro, Japanese Yen and Pound Sterling.  One SDR has an approximate value of $1.4076 USD.

Article 24 of MC99 has a built-in mechanism which provides for the periodic review of the limits of liability and their revision, as necessary.  The first review of the liability limits was conducted in 2009, and led to an increase adjustment of the limits for damages for both claims of bodily injury and death as well as claims for delay and damage or loss of baggage and cargo.  Effectively, ICAO increased the limits of liability by 13.1%.

The Montreal Convention provides that the review of these limits is to be conducted every five years and must take into consideration inflation factors.  In 2014, ICAO conducted its second review of the liability limits and recently released its determination.  For the most recent review, the inflation factor was determined to be below the threshold stipulated to trigger an adjustment.  Accordingly, the limits of liability will remain at their present levels for the next five years.  These levels of liability are limited as follows:

• For destruction, loss, damage or delay of baggage: 1,131 SDRs
• For destruction, loss, damage or delay of cargo: 19 SDRs per kilogram
• For damage caused by delay: 4,694 SDRs
• For bodily injury or death, the carrier will be strictly liable for provable damages up to 113,100 SDRs