International airline liability treaty nears signing

A treaty that would create an international standard for compensation to victims of airline disasters has taken one step closer to signing.The U.S. Senate has approved the “Montreal Convention”, as created by the International Civil Aviation Organization (ICAO).Among the issues outlined in the treaty is creating a jurisdictional system for lawsuits filed by crash victims or their families against airlines. Plaintiffs can file either in their own country of residence, the home office country of the airline, the country where the ticket was purchased or the flight’s final destination country.The treaty was actually penned in 1999, and already has 29 countries signed on, with only one remaining signature needed to make it effective.The Montreal-based ICAO is also continuing its work on an international standard for war-risk liability for airlines in the wake of September 11, 2001 when private market insurers cancelled contracts and withdrew from the market.In its most recent report, the ICAO committee looking at war-risk liability insurance notes that despite the end of government programs to fill the market gap, insurance capacity has not returned. Limits are still low, and cancellation policies still being imposed, and while premiums have dropped to some extent, they remain quite high.”The [war risk liability] cover now available is only just adequate to satisfy lessors and the minimum insurance requirements of some states Having reviewed the information provided, the [ICAO review] group concluded that the commercial market remains fragile and a market failure could still occur,” states the committee’s report.The committee reviewed the relevance of its “Globaltime” program, a voluntary program that states can sign onto to offer war risk coverage. It recommends the program be retained on a contingency basis in case of future market failure. It also wants to see an international mechanism to limit liability for carriers on third-party war-risk liability claims.