[Congressional Record Volume 144, Number 132 (Monday, September 28, 1998)]
[Senate]
[Pages S11059-S11062]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          MONTREAL PROTOCOL NO. 4--TREATY DOCUMENT NO. 95-2(B)

  Mr. ROBERTS. Mr. President, I ask unanimous consent that the Senate 
proceed to consider the following treaty on today's Executive Calendar, 
No. 22. I further ask unanimous consent that the treaty be considered 
as having passed through its various parliamentary stages up to and 
including the presentation of the resolution of ratification; all 
committee provisos, reservations, understandings, declarations, be 
considered agreed to; that any statements be inserted in the 
Congressional Record as if read; and I further ask consent that when 
the resolution of ratification is voted upon, the motion to reconsider 
be laid upon the table, the President be notified of the Senate's 
action, and, following the disposition of the treaty, the Senate return 
to legislative session.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROBERTS. I ask for a division vote on the resolution of the 
ratification.
  The PRESIDING OFFICER. A division is requested. Senators in favor of 
the ratification will rise and stand until counted.
  All those opposed to ratification, please rise and stand until 
counted.
  On a divisions, two-thirds of the Senators present and having voted 
in the affirmative, the resolution of ratification is agreed to.
  The resolution of ratification is as follows:

       Resolved, (two-thirds of the Senators present concurring 
     therein), That the Senate advise and consent to the 
     ratification of the Montreal Protocol No. 4 to Amend the 
     Convention for the Unification of Certain Rules Relating to 
     International Carriage by Air, signed at Warsaw on October 
     12, 1929, as amended by the Protocol done at The Hague on 
     September 8, 1955 (hereinafter Montreal Protocol No. 4) 
     (Executive B, 95th Congress, 1st Session), subject to the 
     declaration of subsection (a), and the provisos of subsection 
     (b).
       (a) Declaration.--The Senate's advice and consent is 
     subject to the following declaration:
       (1) Treaty interpretation.--The Senate affirms the 
     applicability to all treaties of the constitutionally based 
     principles of treaty interpretation set forth in Condition 
     (1) of the resolution of ratification of the INF Treaty, 
     approved by the Senate on May 27, 1988, and Condition (8) of 
     the resolution of ratification of the Document Agreed Among 
     the States Parties of the Treaty on Conventional Armed Forces 
     in Europe, approved by the Senate on May 14, 1997.
       (b) Provisos.--The resolution of ratification is subject to 
     the following provisos:
       (1) Supremacy of the constitution.--Nothing in the Treaty 
     requires or authorizes legislation or other action by the 
     United States of America that is prohibited by the 
     Constitution of the United States as interpreted by the 
     United States.
       (2) Return of protocol no. 3 to the president.--Upon 
     submission of this resolution of ratification to the 
     President of the United States, the Secretary of the Senate 
     is directed to return to the President of the United States 
     the Additional Protocol No. 3 to Amend the Convention for the 
     Unification of Certain Rules relating to International 
     Carriage by Air, signed at Warsaw on October 12, 1929, as 
     amended by the Protocols done at The Hague, on September 28, 
     1955, and at Guatemala City, March 8, 1971 (Executive B, 95th 
     Congress).
  Mr. BIDEN. Mr. President, I am pleased to support Montreal Protocol 
No. 4, which will simplify the rules for cargo and baggage liability in 
international air traffic. It is important for the Senate to act now, 
because Protocol No. 4 has already entered into force. Consequently, 
U.S. carriers and cargo companies are unable to take advantage of these 
simplified rules, at a significant economic cost. U.S. industry 
estimates that Protocol No. 4 will save them $1 billion annually.
  The treaty has been pending in the Senate for over 20 years. It 
failed to gain support not because it is controversial, but because it 
has been the victim of misfortune--having been paired, in its 
submission to the Senate, with Montreal Protocol No. 3, a treaty 
placing unreasonably low limits on personal liability in international 
air traffic. I oppose Protocol No. 3, because I believe strongly that 
limits on personal liability contained in the treaty are an 
anachronism. Such limits may have been warranted when the underlying 
Warsaw Convention was drafted in 1929, a time when the airline industry 
was in its infancy. Now, however, when international air carriers are 
large corporations with significant financial resources--and thus fully 
capable of purchasing adequate insurance--there is no justification for 
such limits.
  For the past two decades, the aviation industry and the Executive 
Branch unsuccessfully sought ratification of Protocol No. 3 and No. 4. 
Only once did the Protocols reach the full Senate floor. In 1983, the 
Senate voted 50-42 to approve them, far short of the two-thirds 
necessary for advice and consent to ratification.
  Recognizing that Protocol No. 3 cannot be approved by the Senate, the 
industry and the Executive have effectively abandoned the effort, and 
have requested the Senate to proceed with consideration of Protocol No. 
4. The resolution of ratification of Protocol No. 4 will bring a formal 
end to the misguided effort to approve No. 3: the resolution directs 
the Secretary of the Senate to return Protocol No. 3 to the President.
  More importantly, the industry, acting through its association, the 
International Air Transport Association, has taken steps to waive these 
personal liability limits. Consequently, most of the leading air 
carriers have agreed in their contracts with passengers to waive all 
personal liability limits, and agreed to strict liability up to 100,000 
Special Drawing Rights, or about $130,000.
  These are positive developments, and I commend the airlines for 
taking these steps. Although not all carriers have waived the liability 
limits, all of the major U.S. carriers have, as have many of the 
leading foreign carriers which fly to the United States. I urge the 
Department of Transportation to make every effort to ensure that all 
carriers involved in international air traffic which fly within or to 
or from

[[Page S11060]]

the United States do so as soon as possible.
  I hope that these measures, which are based on contract, not on any 
domestic law or international treaty, will eventually be codified in a 
new international instrument--an instrument that would firmly establish 
international norms and provide certainty for carriers and passengers 
alike. Negotiations toward that end are ongoing under the auspices of 
the International Civil Aviation Organization (ICAO).
  One sticking point in these negotiations has been the question of a 
``fifth jurisdiction.'' Under the current Warsaw Convention, a suit may 
be brought in any one of four places: the place of incorporation of the 
carrier, the carrier's principal place of business, the place where the 
ticket was sold, and the place of the ultimate destination of the 
passenger. Notably missing from this list is the place where the 
passenger lives, or, in legal terms, his ``domicile.'' As a practical 
matter, most Americans will be able to sue in U.S. court under the 
existing four jurisdictions; but there will be cases in which a 
passenger buys a ticket overseas on a foreign carrier--which would 
probably preclude that passenger from bringing a suit in a U.S. court.
  The Clinton Administration is pressing for inclusion of the fifth 
jurisdiction in any new international instrument. I commend the 
Administration for taking this position. Including a fifth jurisdiction 
should be considered an essential element of any new international 
agreement on passenger liability.
  At this point, I would like to call the attention of my colleagues 
and the Executive Branch to a speech delivered earlier this year by Lee 
Kreindler regarding these negotiations. Mr. Kreindler, an aviation 
attorney with over four decades of experience, has provided a helpful 
guide to the current legal situation in this area and to the ICAO 
negotiations.
  I ask unanimous consent that they be printed in the Record at the 
conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. BIDEN. Mr. President, Montreal Protocol No. 4 is a useful step in 
modernizing the rules of cargo and baggage in international air 
traffic. I urge my colleagues to support it.

                               Exhibit 1

     Clouds on the Liability Horizon and What We Can Do About Them

                         (By Lee S. Kreindler)

       I am honored to appear on this symposium, the second 
     straight year in which I have been on your program. After 
     all, as a plaintiff's laywer, I have spent much of the last 
     forty five years bringing legal actions against IATA's 
     members, the international airlines. More important than 
     that, perhaps, I have spent most of that time being highly 
     critical of IATA's role in promoting the Warsaw Convention 
     and its progeny, and in defending and preserving a limit of 
     liability that to me, and all of my clients, has been 
     abhorrent.
       Now I find myself applauding your monumental efforts, and, 
     particularly the monumental efforts of your distinguished 
     general counsel, Lorne Clark, to put an end to limits of 
     liability in personal injury and death cases. I find that, 
     after all these years, we are in synchronization, pulling 
     together to create a system that will protect the interests 
     of your member carriers' customers, the flying public, and 
     their families, and at the same time preserve the interests 
     of your airline members. To me this is an uplifting and 
     energizing experience.
       I want IATA's efforts to establish a fair and enforceable 
     system of liability in international air law, as well as my 
     own efforts, to succeed. I have nothing but praise for IATA's 
     courage in leading its member airlines to waive the liability 
     limits of the Warsaw Convention. The IATA Agreement was long 
     and hard in coming, but it was a remarkable achievement given 
     the political and economic realities of the world. You 
     deserve enormous credit for bringing it about. I say that, as 
     your long time adversary, without condition or qualification. 
     You have done a wonderful job, for which the flying public 
     owes you thanks.
       I think it would be a great mistake, however, to revel in 
     the glory of accomplishment, and ignore problems and threats 
     which could very well bring this brave new dream crashing 
     down. And so my concern now, as a friend, is that the new 
     system, because of its inherent weaknesses, may fail. Indeed, 
     I see clouds on the horizon, and I want to address them with 
     you while there is still time to deal with them, so that, 
     together, we can build a strong and lasting structure that 
     can and will withstand the storms that are sure to come.

   Problems With the IATA-ATA Agreements and the Resulting System--A 
                      Foundation Based on Contract

       The basic law in international airline liability is still 
     provided by the Warsaw Convention, which was effectively 
     modified in 1966, with respect to transportation involving 
     the United States, to increase the passenger injury and death 
     limitation to $75,000. Onto this convention there have now 
     been engrafted three agreements, the IATA Intercarrier 
     Agreement (IIA), the Agreement on Measures to Implement the 
     IATA Intercarrier Agreement (MIA), and the ATA Intercarrier 
     Agreement, also known as Provisions Implementing the IATA 
     Intercarrier Agreement (IPA), applicable, at least, to those 
     carriers which have signed the agreements.
       Each of the three agreements, IIA, MIA, and IPA is a 
     private contractual agreement sponsored by either IATA or ATA 
     and signed by individual airlines. Some of these agreements, 
     by some of the signatory airlines, have been incorporated in 
     tariffs, which have been filed with the U.S. Department of 
     Transportation. This does not, however, turn them into 
     ``law.'' They are still private contracts which, by virtue of 
     the tariffs, are incorporated in the airline's conditions 
     of contract.
       In the first of these agreements, IIA, the signatory 
     airlines agreed to ``take action'' to waive the limitation of 
     liability on recoverable compensatory damages, which, since 
     the Montreal Agreement of 1966 has effectively been $75,000 
     per passenger on a substantial part of international airline 
     travel, including all transportation involving the United 
     States.
       In the MIA the signatory carriers agree to implement the 
     IIA by incorporating various provisions in their contracts of 
     carriage and tariffs where necessary. Under the most 
     important provision the carrier agrees that it will not 
     invoke the limitation of liability in Article 22 (1) of the 
     Convention as to any claim of recoverable compensatory 
     damages under Article 17. In order words, each carrier waives 
     the Warsaw limit.
       The second provision each carrier agrees to in MIA is to 
     not avail itself of any defense under Article 20 (1) of the 
     Convention with respect to claims up to 100,000 SDRs. Article 
     20 (1), sometimes called the exculpatory clause, provides 
     that the carrier can exculpate itself from liability 
     completely if it can show it took all necessary measures to 
     avoid the damage. Thus, in agreeing to waive this defense up 
     to 100,000 SDRs each carrier has subjected itself to absolute 
     or strict liability up to that amount. In not making this 
     waiver above 100,000 SDRs the carrier has accepted the burden 
     of proving the taking of all necessary measures. Proving that 
     is a virtual impossibility in all cases except terrorist 
     cases, other situations entirely caused by a third party, and 
     possibly clear air turbulence cases.
       Thus while this provision may not have substantial 
     practical significance the principle of the carrier having 
     the burden of proof regarding its absence of fault has become 
     a precedent which may affect the formulation of a new 
     convention or protocol.

        Rights of Recourse, Including Indemnity and Contribution

       The MIA goes on to provide that the signatory airline 
     ``reserves all defenses available under the Convention to any 
     such claim.'' And it adds that ``With respect to third 
     parties, the carrier also reserves all rights of recourse . . 
     . including rights of contribution and indemnity.''
       It may be well and good for the signatory airlines to 
     reserve all rights of recourse against a manufacturer, for 
     example, in a contract between itself and other airline, but 
     there is real doubt that this can have any legal and binding 
     effect without the consent of such third party and possibly 
     without the consent of the passenger himself. The fact that 
     this reservation of rights is a creature of private contract, 
     rather than law or legal judgments, is, in my opinion, a 
     fatal flaw in the system in terms of legal enforceability.
       An impleaded third party, such as a manufacturer, or its 
     insurer, will be free to claim that the airline, or its 
     insurer, which made a payment pursuant to IIA, was a 
     ``volunteer'', and was a collateral source whose payment may 
     not be created to damages owed the passenger or his estate by 
     the manufacturer.
       It is my understanding that George Tompkins and Lorne Clark 
     have requested the manufacturers to provide a statement of 
     policy that they will not assert a ``volunteer'' defense in 
     the event that an airline settles a claim in excess of the 
     applicable limit of liability in any suit for contribution or 
     indemnity, and it is my further understanding that the 
     request is being favorably considered.
       However, in my opinion, the problem can't definitively be 
     cured by consent of the third party defendant. Under this 
     system the airline can offer to pay unlimited damages, and it 
     may try to insist that a passenger or passenger's family 
     execute a general release, releasing third parties, but the 
     passenger does not have to accept that. The passenger can sue 
     the airline under the IIA and MIA, as a third party 
     beneficiary, and can maintain a wholly independent action 
     against a negligent manufacturer or air traffic control 
     facility. In other words there is the theoretical 
     possibility here of double recoveries. The passenger can 
     recover on his case against the airline, which is based on 
     the IIA and MIA contracts and then take the position, on 
     his case against the manufacturer, or other third party, 
     that the airline was collateral source for which the 
     manufacturer may not get a credit. For the recourse 
     provisions of

[[Page S11061]]

     IIA, MIA, and IPA to be meaningful the payment of damages 
     by the airline would have to be the result of law and not 
     private contract.
       This problem of recourse runs through all three of these 
     agreements, and, in my opinion, can be solved only by a new 
     convention or protocol, establishing a legal basis for the 
     payment of unlimited damages by an airline.
       That is not the only problem presented by IIA agreements.

                Domicile, ``Subject To Applicable Law''

       IIA states as an objective ``that recoverable compensatory 
     damages may be determined and awarded by reference to the law 
     of the domicile of the passenger.''
       When one examines the MIA, however, it provides that at the 
     option of the carrier it may include a provision in its 
     conditions of carriage and tariffs that, ``subject to 
     applicable law'', recoverable compensatory damages . . . may 
     be determined by reference to the law of the domicile or 
     permanent residence of the passenger.''
       In the IPA there is no option provision. It simply states 
     that ``subject to applicable law, recoverable compensatory 
     damages * * * may be determined by reference to the law of 
     the domicile or permanent residence of the passenger.''
       Thus the intent of the drafters, as shown by the language 
     of the three agreements, would appear to have been to apply 
     the law of the passenger's domicile or permanent residence. 
     In actual fact, however, there was no such uniform agreement 
     to apply the law of domicile, and the language can best be 
     explained by the political, or negotiating constraints if any 
     agreement at all was to be achieved.
       Briefly stated, the United States carriers, with the 
     prodding of the U.S. Department of Transportation, insisted 
     on language applying the law of domicile. To European 
     carriers, however, their law did not apply law of domicile. 
     Generally there courts would apply the law of the place of 
     the accident or the law of the forum. Thus in the face of the 
     language in IIA, pointing to law of domicile, they insisted 
     on language making it clear that would only be at the option 
     of the airline.
       The U.S. carriers, on the other hand, all signed the IPA, 
     and thereby accepted law of the passenger's domicile on cases 
     against them.
       The agreements may not do that, however, because the 
     language, ``subject to applicable law'' may dictate some 
     other law!
       Let's assume, for example, a case brought under the IPA in 
     which the deceased passenger was domiciled in Pennsylvania, 
     which has relatively liberal death damages law. Let's say the 
     airplane crashed into the high seas. When the case is brought 
     in the United States will the Death on the High Seas Act be 
     applied, or the law of Pennsylvania?
       In the first instance the decision will be up to the 
     airline, or, more likely, the airline's insurer. Let's 
     suppose the airline, faithful to the text of the IIA 
     agreements, makes an offer under Pennsylvania law standards. 
     But let's assume the passenger, or the lawyer for the estate 
     of the passenger, rejects the offer as being insufficient. 
     The matter would then go to court. In court the passenger (or 
     the estate's) lawyer, asserts that the law of Pennsylvania 
     will govern damages, pointing to the IIA Agreements.
       What position does the airline take in court? And what 
     position will the court take? After all the Death on the High 
     Seas Act is a United States statute.
       As for the carrier, one might hope it would feel morally 
     bound to accept the law of the domicile of the passenger, but 
     history suggests that economics will determine its position, 
     or, more precisely, its insurer's position.
       Let's take a similar case under the IPA, where the airplane 
     has crashed over land, as in the Pan Am 103 Lockerbie 
     bombing. Let's assume the action is started in Florida, as, 
     indeed, a significant number of Lockerbie cases were. In 
     those Lockerbie cases the court, stating that it was applying 
     Florida choice of law rules, applied the law of the place of 
     the accident, Scotland.
       What will the situation be under the Intercarrier 
     Agreements including the IPA? Will the carrier, and the 
     court, enforce the law of the passenger's domicile, or will 
     they apply the law of the place of accident?
       Again, history suggests that the parties are likely to be 
     motivated by economics.
       In short, the words, ``subject to applicable law'' are 
     likely to introduce conflict and uncertainty in many cases 
     brought under the IPA. I would respectfully suggest that 
     those words be removed from the IPA Agreement, and that it 
     simply provide that the law of the passenger's domicile will 
     be applied.

                          Successive Carriage

       Another problem arises by virtue of Article 30 (1) and (2) 
     of the Warsaw Convention which deal with the liability of 
     successive carriers. Article 30 (2) states: ``(2) . . . the 
     passenger or his representative can take action only against 
     the carrier who performed the transportation during which the 
     accident or delay occurred. . . .''
       It may turn out, of course, that all carriers sign and 
     adhere to the Intercarrier Agreement, and they will, 
     therefore, all be subject to it. But, given the nature of the 
     world, it is probable that some, or even many, will not sign 
     on. If the second, or third, successive carrier is the one on 
     which the accident happens, it may choose not to waive the 
     limit, despite the claim by the plaintiff that the successive 
     carrier is bound by the original contract of carriage. Then 
     where are we?
       I understand that carriers now signing the IIA Agreements 
     are limiting their waivers of the limit to accidents 
     occurring on their own part of the carriage, so passengers 
     may still be subject to the limit in other cases.
       But the injured passenger, or his family if he has been 
     killed, will, nevertheless, argue that the carrier which 
     issued the ticket must be liable for damages without 
     limitation, and that he or his estate is an authorized third 
     party beneficiary. An action will be brought against that 
     carrier for unlimited damages. The Warsaw Convention, which 
     was supposed to have simplified liability rules will be the 
     very cause of the dispute in these cases.
       If, indeed, waivers of the limit do not apply to successive 
     carriers, then the IATA agreements will be something of a 
     cruel hoax in successive carriage situations and may well 
     inspire intense adverse passenger group reactions.

                          The 5th Jurisdiction

       Article 28 of the Warsaw Convention permits suit to be 
     brought in any one of four places; the place of incorporation 
     of the carrier, its principal place of business, the place 
     where the contract of carriage was made (i.e. where the 
     ticket was sold), and, finally, the place of ultimate 
     destination of the passenger. Notably absent is the place of 
     the passenger's domicile. In most cases the place of the 
     passenger's domicile will coincide with one of the places 
     suit can be brought anyway, so there is no problem. But 
     there are occasional cases where an American, for example, 
     will buy a ticket while on a trip, away from home. 
     American damages standards are considerably higher than 
     those of other countries, generally, and in that rare case 
     the American passenger, or his family, will be denied the 
     higher American standards.
       It is generally recognized that the place of domicile is 
     the place which has the greatest interest in the question of 
     damages, and the denial of domicile law is very troubling to 
     parties and governments alike.
       The United States Government, and particularly the 
     Department of Transportation and Department of State, have 
     taken the position that any new regime of law, in 
     international airline transportation, must provide for suits 
     in ``the 5th Jurisdiction'', i.e., the place of the 
     passenger's domicile. Non American carriers have resisted the 
     proposal, for reasons that baffle me. It seems to me that 
     from the airline's standpoint the point is not worth fighting 
     about, if the carriers can get an otherwise favorable system. 
     There are simply not enough such cases to provide a real 
     stumbling block.
       The IATA intercarrier agreements do not and cannot solve 
     the problem, and they cannot because of the Warsaw 
     Convention's proscription against changing jurisdictional 
     rules (See Article 32). The United States has gone along with 
     the intercarrier agreements because of the predominant 
     interest in getting the airlines to abandon the limits, 
     notwithstanding their failure to adopt the 5th jurisdiction, 
     but the point remains one of contention for any new 
     convention or protocol.

                           Fault or No Fault?

       Finally, important lawyers in the United States DOT seem to 
     be locked into an anti-fault mode of thinking on any new 
     system, whether it be based on the intercarrier agreements or 
     a new convention or protocol. This probably goes back to 
     attitudes developed in 1966 at the time of the Montreal 
     Agreement, when State Department lawyers obtained from the 
     airlines and IATA an agreement to accept absolute liability 
     up to a limit of $75,000 as a tradeoff for perpetuation of 
     the Warsaw Convention and its limited liability regime. The 
     DOT has viewed absolute, no-fault, liability as being in the 
     passenger interest. Most passenger groups, however, as well 
     as lawyer groups which customarily represent passengers, view 
     the fault system as a fundamental necessity which is 
     critically important from the safety perspective for the 
     protection of passengers as well as society in general. They 
     point to numerous contributions to airline safety made by 
     tort cases and their examination into both negligence and 
     accident causation.
       The contribution of the tort system to aviation safety is 
     well recognized, also, by aviation insurers and their 
     lawyers. Sean Gates, a London solicitor and senior partner of 
     Beaumont and Son, one of the leading firms representing 
     aviation underwriters, has expressed himself as strongly 
     opposed to absolute liability for international airlines, 
     both because he is opposed to abandonment of the fault 
     system, and because he doesn't see why airlines alone in our 
     society should be held to be guarantors of safety. Anthony 
     Mednuik, one of the world's leading underwriters, and 
     presently Managing Director of the British Aviation Insurance 
     Group, has similarly expressed himself as strongly opposed to 
     abandoning the fault system. He did so most recently at a 
     large meeting in Amelia Island, Florida, in October, of the 
     Aircraft Builders Council, which consists of both aviation 
     manufacturers and underwriters, and again at an aviation 
     insurance and law symposium in London in November, sponsored 
     by Lloyds of London Press. And George N. Tompkins, Jr. one of 
     the top airline defense lawyers in the United States has 
     recommended the following language to the ICAO Secretariat 
     Study Group, of which he is a member: ``No limit of liability 
     on the recoverable damages mentioned in A above if the 
     passenger/claimant proves negligence or

[[Page S11062]]

     fault on the part of the carrier. This would not impose an 
     undue burden on the passenger/claimant and would serve to 
     preserve the ``Warsaw Convention'' as a fault based system.''
       This difference of opinion on the fault system is not a 
     factor affecting the intercarrier agreements since they are 
     already in place and they have been based on strict liability 
     up to 100,000 SDRs and presumptive liability above that 
     amount if the carrier fails to show its complete absence of 
     fault, but it will be a significant factor in the effort to 
     achieve a new convention or protocol.
       Thus we have a situation where the IATA agreements, however 
     noble their purpose and laudable their execution, provide an 
     insufficient basis for a satisfactory future regime in 
     international air law, and where there is considerable doubt 
     that, on a political level, the problems and differences of 
     fault/no fault, limitations of venue, rights of recourse, and 
     successive carriage, can be overcome, so as to create a 
     reasonable new convention or protocol. The prospect exists 
     that there will be no satisfactory new convention or 
     protocol, and that the intercarrier agreements will fail to 
     provide a workable system. It is uncertain where such an 
     outcome would lead, but one virtual certainty would be 
     complete abandonment of the Warsaw Convention, and the 
     airlines would not be happy about that.
       So, where do we go from here?

                       The Need to Work Together

       Everyone involved, from IATA and airlines, to the United 
     States Government and other governments, to passengers' 
     groups and plaintiffs' lawyers, has something to lose from a 
     failure to come up with a satisfactory new liability regime. 
     The obvious answer to the problem is the formulation of a new 
     and widely acceptable convention or protocol which will have 
     the force of law to handle not only airline liability, but 
     rights of recourse, successive carriage, choice of law and 
     adequate venue.

                       The Need for Ratifiability

       At the excellent Lloyds of London Press Aviation Insurance 
     and Law Symposium in November, in London, Don Horn, Associate 
     General Counsel for International Affairs of the United 
     States Department of Transportation, pointed out the truism 
     that the first requirement for any new convention (or 
     protocol) is that it must be ratifiable.
       I respectfully suggest that that is a good place to start 
     in our consideration of the new convention or protocol. 
     Whatever we come up with must be ratifiable. It must be 
     ratifiable by the United States, and it must be approval by 
     the international airlines.
       Excellent preparatory work has been done by the ICAO Study 
     Group and the ICAO Legal Committee. The pattern of a splendid 
     convention or protocol is now clear, and available. In 
     general it has been set forth by the Study Group. It will 
     provide for a two tier liability system, with absolute 
     liability up to the threshold number of 100,000 Special 
     Drawing Rights, and negligence liability above that. It must 
     provide for the addition of the ``fifth jurisdiction.'' In 
     other words, passenger's domicile must be added to the other 
     available venues, place of incorporation of the carrier, 
     place of its principal place of business, and place where the 
     ticket was bought.
       For those international airlines and insurers who are 
     reluctant to accept the fifth jurisdiction I would point out 
     three things. First, there is an element of compromise 
     inherent in the United States Government acceptance of the 
     two tier concept on fault. The position of the U.S. has been 
     to favor absolute liability across the board. This is not in 
     the airline interest, and in my humble opinion, not in the 
     public interest, but that, as I understand it, has been its 
     position. Acceptance of the two tier system by the United 
     States will have another laudable effect. It will insure 
     support of the new convention or protocol in the United 
     States on the part of passengers', consumers, and lawyers' 
     groups who believe that the fault system is one of society's 
     basic protections. Were the United States to hold out for 
     absolute liability across the board, and were that part of 
     the new Convention or protocol I would expect intense 
     opposition to the new convention or protocol in the United 
     States.
       The second point is that in terms of cost to airlines or 
     insurers the fifth jurisdiction is deminimus. There are, 
     simply, very few cases where an American domiciliary buys a 
     ticket in another country and cannot sue in the United States 
     under one of the four presently permissible jurisdictions. I 
     have been practicing aviation law for forty five years, and I 
     have probably handled as many airline cases as any other 
     lawyer in the world, and I can only remember one case 
     involving an American passenger where I was unable to sue in 
     the United States because of Article 28.
       Finally, the overall benefit to airlines, and all others, 
     of having a viable new convention or protocol would be 
     enormous. It would be foolish to jeopardize its chances 
     because of opposition to the fifth jurisdiction.

                   Burden of Proof on the Second Tier

       As indicated above, the new convention proposed by the 
     Legal Committee of ICAO prescribes a two tier system of 
     liability. There is absolute liability for damage up to 
     100,000 SDRs and negligence liability above that. In an 
     exercise of indecision, however, the drafters set forth three 
     alternative provisions on who shoulders the burden of proving 
     negligence. The concept of placing the burden on the 
     defendant airline of showing its freedom from fault grows 
     from Article 20 of the Convention which provides that to 
     exculpate itself the airline must show that it took all 
     necessary measures to avoid the damage. Generally speaking, 
     however, it is the plaintiff who has the burden of proving 
     negligence.
       The concept of providing three alternative suggestions is 
     not sound and will lead to confusion and uncertainty. 
     Obviously, it is to the plaintiff's advantage to place the 
     burden on the defendant, but I don't consider it a make or 
     break matter. Again, it is more important to get the broad 
     outlines of the convention established than to fight about 
     each of its terms.

                        Convention or Protocol?

       Similary, the question of whether this should be a brand 
     new convention or a protocol to the Warsaw Convention is less 
     important than the substance of the new instrument. People I 
     respect, including Lorne Clark and George Tompkins, who know 
     far more than I do about the politics of enacting a new 
     convention, tell me that it will be much easier to enact a 
     protocol, so, for that reason alone I favor it.
       I would urge a note of caution, however. The Warsaw 
     Convention has a very bad history and reputation with many 
     people, including me and my clients. For many of them it has 
     ruined their lives. I would eliminate all extolatory language 
     praising the Warsaw Convention, such as the introductory 
     language in the ICAO Legal Committee draft, regardless 
     whether it is new convention or protocol.

                     Simpler and Shorter is better

       I would suggest that all references to cargo be removed. It 
     is not necessary to include it in the new instrument. In 
     fact, it may be completely resolved by the ratification of 
     Montreal Protocol 4. The simpler and shorter the new 
     instrument is, the better.

                          ____________________