Air carrier liability complaint upheld

In a recent decision of the European Ombudsman a complaint against the European Commission concerning Article 7 of the EC Regulation 2027/97 on Air Carrier Liability in the event of accidents was upheld.

The 1997 Regulation, which imposed a modified version of the Warsaw Convention on Community air carriers in respect of the carriage of passengers, included a requirement in Article 7 that no later than 2 years after its entry into force, the European Commission should draw up a report on the application of the Regulation, to take into account economic and international developments. This report was to include proposals for any suggested revision of the Regulation.

The complaint against the Commission argued these steps had not been carried out. The Commission suggested that as a new international agreement, the Montreal Convention, was negotiated within 2 years of the adoption of the Regulation, which was signed by the EU in May 1999, it took a "clear and conscious political decision" to apply the rules of the Montreal Convention, and therefore proposed an amending Regulation to introduce Montreal rules for Community carriers. This amending Regulation, EC Regulation 889/2002 was published in the Official Journal of the European Communities on 30 May 2002 and will bring the Convention into effect on a Europe-wide basis upon the latter's entry into force.

Nevertheless, the European Ombudsman concluded in its report on 27 June 2002, that as Regulation 2027/97 came into force on 18 October 1998, the Commission should have drawn up a report before 18 October 2000, and comments:

"The Ombudsman takes note of the Commission's opinion that international developments have changed its view on the necessity to draw up a report. Nevertheless, given the lack of any legal provision to free the Commission from its obligation to produce the report, the Ombudsman notes that the Commission failed to comply with its duty in accordance with Article 7 of Regulation 2027/97. This is an instance of maladministration".

The Montreal Convention has received 20 ratifications so far. A further ten ratifications are required, following which, after a 60 day transitional period, the convention will enter into force, revising the liability regime applying to airlines on an international basis. Amongst other effects on the aviation industry, the Convention will see a liability limit applied of SDR4,150 in relation to damage caused by delay to passengers, and of SDR1,000 in respect of the destruction, loss or damage of passenger baggage (a significant increase on the current limit).

Article 7 of the new Regulation also includes provision for review by the Commission with a report to be produced within 3 years of the Regulation taking effect. It is anticipated that this time round the Commission will comply. Time will tell!

For further information, please contact Alex Stovold by e-mail at [email protected] or by telephone on +44 (0)20 7367 3463.