The Montreal Convention 1999 (“the Convention”) is a consolidating instrument which was brought into force in the UK on 28 June 2004 by the Carriage by Air Acts (Implementation of the Montreal Convention 1999) Order 2002/263. It is the most recent update to the Warsaw Convention 1929 and applies to all international carriage of persons, baggage or cargo performed by aircraft for reward. The Convention provides an exclusive cause of action and sole remedy against air carriers in respect of loss, damage or delay suffered by passengers or to their baggage, or to cargo per Abnett v British Airways Plc [1997] A.C. 430 and any action for damages can only be brought subject to the conditions and limits of liability therein. Punitive and other non-compensatory damages are not recoverable. Claims are subject to a limitation period of two years from the date on which the aircraft arrived or ought to have arrived at its destination, or from the date on which carriage ceased. Action for damages must be brought in the territory of the domicile of the carrier, or its principal place of business or the place of business through which the contract was made, or the carrier’s destination. Where a passenger suffers death or personal injury, the claim may alternatively be brought where at the time of the accident the passenger has his principal and permanent residence, if the carrier provides carriage by air to or from there, on its own or by another carrier’s aircraft under a commercial agreement, from its, or another carrier’s, premises with which it has a commercial agreement.

Carriage of Passengers: The Convention provides for damages in case of death or injury of passengers without fault, of a revisable limit of up to 100,000 IMF Special Drawing Rights (currently 113,100 SDRs) and potentially unlimited carrier liability on proof of negligence. Article 17.1 provides that “the carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking”. Liability is subject to defences viz: contributory negligence. The Convention made no significant change to the Warsaw Convention (“WC”) art.17, and art.17 authorities therefore remain valid in respect of art.17.1 claims.

Carriage of Baggage: Different rules apply to “baggage” and “cargo” under the Convention, which does not define the terms. Generally, luggage carried with the passenger on the same aircraft is treated as baggage whilst unaccompanied items are cargo. However, the intentions of the parties evidenced by the baggage check or air waybill are determinative. There is a distinction between checked or hold baggage and unchecked carry-on baggage, in terms of documentation and carrier liability. Unchecked items passed onboard to cabin crew may remain unchecked if accessible but if placed in the hold and inaccessible until arrival, may become checked baggage Schedlmayer v Trans International Airlines 416 NYS 2d 461 (NY Cit Civ Ct, 1979) even where no additional or original baggage check is issued or altered Chukwuma v Groupe Air France Inc 767 F Supp 43 (SDNY 1991). Once the carrier takes control of carriage of baggage, it is checked baggage. However, a baggage check is not required.

Under the Convention, the carrier is liable for damage sustained in case of destruction or loss of, or damage to, checked baggage (unless due to inherent baggage defect) upon condition only that the event which caused the same, took place on board the aircraft or whilst the baggage was in the carrier’s charge. The carrier is also liable for damage to unchecked baggage and personal items, arising from fault on its or its servants or agent’s part. The revisable limit of liability for destruction, loss, damage or delay of checked or unchecked baggage under the Convention, was set at 1,000 SDRs (currently 1,131 SDRs) per passenger, unless a “special declaration of interest in delivery at destination” is made on passenger payment of a supplementary sum. In which case, the carrier is liable to pay up to the declared sum unless it can show that the sum is greater than the declared interest specified.

The SDR 1,131 limit is a per passenger limit, so that if one bag contains the personal belongings of several passengers each can recover up to the specified limit. In Espada Sanchez v Iberia Lineas Aereas de Espana SA (C-410/11) [2013] 1 Lloyd’s Rep. 411, a family of four packed all their belongings into two suitcases lost on a Barcelona to Paris flight, but could recover for loss of items belonging to each, placed in baggage checked in, in another’s name, on the same flight. In Nastych v British Airways Plc 33 Avi 18,603 BA lost but recovered – hence delayed – the passenger’s Budapest outbound luggage and permanently lost her New York inbound luggage, but she could recover up to 1,000 SDRs for both the delay and loss respectively, on each separate flight. In Walz v Clickair SA (C-63/09) [2011] 1 All E.R. (Comm) 1037 Walz’s luggage was lost on a Barcelona Oporto flight and he claimed 2700 euros, the value of the luggage and 500 euros for non-material damage, arguing that the 1,131 SDR limit applied to each type of claim. However, the ECJ interpreted the term damage in the Convention as including both material and non-material damage, hence the limit was per passenger. The SDR 1,131 limit does not apply if the damage is proven to result from an act or omission of the carrier, its servants or agents done with intent or recklessly and with knowledge that damage would probably result, provided that in the case of servants or agents, they were acting within the scope of their employment.

The carrier’s admission that checked baggage is lost, or its non-arrival after the expiry of 21 days post arrival due date, triggers the passenger’s entitlement to enforce their contract of carriage rights. The extent of liability for consequential damage will be determined under the private international law rules of the forum state, e.g. in O’Connor v Eastern Airlines (Argentine Fed CA, 23 April 1984) where recovery for distress and discomfort on a short trip was granted. The court can award court costs in whole or in part, and other Claimant-incurred litigation expenses such as interest, but not where the amount of damages awarded (excluding litigation costs and expenses) does not exceed the amount which the carrier has offered to the Claimant in writing, within six months of the occurrence or before the litigation commences, if later. Timely written notice of damaged baggage must be made to the carrier forthwith and not more than seven current (not working) days after receipt of checked baggage.

Carriage of Cargo: Cargo is not defined under the Convention, but in Johnson v American Airlines Inc 834 F 2d 721 (9th Cir, 1987) virtually anything shipped by a carrier has been held to be “goods”. Even human corpses are treated as cargo and require an air waybill. Dangerous goods require a transport document compliant with the Air Navigation (Dangerous Goods) Regulations 2002/2786 for their safe transport.

The air waybill, which evidences acceptance of the cargo and the conditions of the contract of carriage, must be delivered. However, this may be substituted by an electronic record of the proposed carriage. Where electronic records are prepared, the consignor must be given access to that electronic information and must, on request, receive delivery of a cargo receipt identifying the consignment. The consignor prepares the air waybill in 3 parts. Part 1 marked “for the carrier” is signed by the consignor, Pt 2 marked “for the consignee” is signed by both carrier and consignor and Pt 3 is delivered by the carrier to the consignor on cargo acceptance. Responsibility for correctness of cargo particulars and statements in the paper or electronic air waybill rests with the consignor. Irregularity, incorrectness or incompleteness of the same renders the consignor liable to indemnify the carrier against all damage suffered by it or third parties to whom the carrier is liable. The carrier is likewise liable to indemnify the consignor in the same circumstances for particulars and statements in the cargo receipt.

The air waybill, or cargo receipt, is prima facie evidence of the carrier’s acceptance of the cargo, the conditions of carriage and contract conclusion. Any statements about the weight, dimensions and packing of the cargo or quantity of packages in the air waybill or cargo receipt, are prima facie evidence of the facts stated. Statements relating to the quantity, volume and condition of the cargo will not suffice as evidence against the carrier unless both have been and are stated in the air waybill or cargo receipt to have been checked by the carrier in the presence of the consignor or relate to the appropriate condition of the cargo. Non-compliance with the documentation provisions will not affect the existence or validity of the contract of carriage which remains subject to the Convention rules including limitation of liability.

Unless expressly varied in the air waybill or cargo receipt, both the consignor and the consignee can demand possession of the cargo during or at the end of the carriage and can enforce the right of disposition and delivery of cargo each in his own names, whether acting in his own or another’s interest so long as he carries out his contractual obligations.

Subject to contributory negligence, the carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, cargo upon condition only that the damage causing event so sustained took place during the carriage by air, i.e. whilst the cargo is in the carrier’s charge. In Eli Lilly and Co v Air Express International USA Inc 33 Avi 17,530 (SD Fla, 2009), where spoliation of temperature-sensitive insulin products occurred on a flight from Fegersheim, France to Indianapolis, USA, a prima facie case of liability was established “upon showing that the goods were delivered to the carrier in good condition, were delivered to the consignee at destination in damaged condition, and resulted in a specified amount of damage”. However, the carrier is not liable if it proves that destruction, loss or damage to the cargo resulted from, inter alia, an inherent defect, defective packing, act of war, or act of public authority – e.g. customs.

The carriage by air covers the period during which the cargo is in the carrier’s charge, but excludes any periods of carriage by land, sea or inland waterway performed outside the airport. Where such carriage does take place in performing the contract of carriage by air, for the purpose of loading, delivery or transhipment, any damage is presumed to be the result of an event taking place during the carriage by air. If the carrier without the consignor’s consent substitutes carriage by another method of transport to be carriage by air, such carriage is deemed to be within the period of carriage by air. Timely notice of complaint by the person entitled to delivery must be made in writing and given or despatched within 14 days from the date of receipt where cargo is damaged and 21 days from the date on which cargo has been placed at his disposal, where delayed.

Liability of the carrier in the event of destruction, loss, damage or delay in the carriage of cargo is limited to 17 SDRs per kg (now 19 SDR’s) unless the consignor at the time of handing over the cargo to the carrier, made a special declaration of interest in delivery at destination and paid any supplementary sum required. Any attempt by the carrier to lower the liability limits set under the Convention by reference to contractual incorporation of an air waybill would likely be void but lack of air waybill formality does not deprive the carrier of the benefits of limitation of liability. Apparently, the carrier will not lose the benefit of the limitation of liability relating to cargo, despite proof that the damage resulted from an act or omission of the carrier, its servants or agents, done intentionally or recklessly and with knowledge that damage would probably result because the relevant provision only applies to passenger delay and baggage not cargo claims.