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Warsaw Convention Limitation on Liability: the Need for Reform After Coccia V

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Warsaw Convention Limitation on Liability: the Need for Reform After Coccia V Fordham International Law Journal Volume 11, Issue 1 1987 Article 4 Warsaw Convention Limitation on Liability: The Need for Reform After Coccia v. Turkish Airlines Anita Khosla∗ ∗ Copyright c 1987 by the authors. Fordham International Law Journal is produced by The Berke- ley Electronic Press (bepress). http://ir.lawnet.fordham.edu/ilj Warsaw Convention Limitation on Liability: The Need for Reform After Coccia v. Turkish Airlines Anita Khosla Abstract This Note argues that a new uniform limtiation on aviation liability must be internationally recognized to address the concerns raised by the Coccia decision. Part I of this Note will discuss the history and purpose of the Warsaw Convention’s limit on liability and the Italian Constitution Court’s rejection of this provision in Coccia. Part II will discuss the international legal ramification of the Coccia decision. Part III will analyze the need to reform Article 22(1) to rationally relate the limit on liability to the development of international air transportation. This Note concludes that a new liability limit must be formulated to ensure the adequacy and certainty of damage compensation. WARSAW CONVENTION LIMITATION ON LIABILITY: THE NEED FOR REFORM AFTER COCCIA v. TURKISH AIRLINES INTRODUCTION Article 22(1) of the Warsaw Convention,' as amended by Article XI of the Hague Protocol2 ("the Convention"), sets a uniform limitation on airlines' liability for the personal injury and death of passengers. In Coccia v. Turkish Airlines, the Italian Constitution Court has declared Article 22(1) unconstitutional while upholding the remaining provisions of the Convention.3 Coccia has focused international attention on the need to up- date Article 22(1) of the Convention to reflect the changing economic structure of the airline industry. This Note argues that a new uniform limitation on aviation liability must be internationally recognized to address the con- cerns raised by the Coccia decision. A uniform limit would avoid forum shopping and the comparison of differing domes- 1. The Warsaw Convention is the informal title for Convention of the Unifica- tion of Certain Rules Relating to International Transportation by Air, openedfor signa- ture Oct. 12, 1929, 49 Stat. 3000, T.S. No. 876, 137 L.N.T.S. 1I [hereinafter Warsaw Convention]. The Convention was the result of two conferences, the first in Paris in 1925, and the second in Warsaw in 1929. Article 22(1) of the Convention reads: In the transportation of passengers the liability of the carrier for each passenger shall be limited to the sum of 125,000 francs. Where, in accord- ance with the law -of the court to which the case is submitted, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not exceed 125,000 francs. Nevertheless, by spe- cial contract, the carrier and the passenger may agree to a higher limit of liability. Warsaw Convention, 49 Stat. 3000, 3019, T.S. No. 876, at 990, 137 L.N.T.S. 11, 25. 2. Protocol Amending the 1929 Convention for the Unification of Certain Rules Relating to International Carriage by Air, at Warsaw on 12 October 1929, Sept. 28, 1955, 478 U.N.T.S. 371 (1963) [hereinafter Hague Protocol]. The Hague Protocol came into force on August 1, 1963. Article XI(I) amended Article 22(1) as follows: In the carriage of persons the liability of the carrier for each passenger is limited to the sum of 250,000 francs. Where, in accordance with the law of the court seised of the case, damages may be awarded in the form of period- ical payments, the equivalent capital value of the said payments shall not exceed two hundred and fifty thousand francs. Nevertheless, by special con- tract, the carrier and the passenger may agree to a higher limit of liability. Id. at 381. 3. Coccia v. Turkish Airlines, 108 Foro It. 1 1586, 1591 (Corte Cost. 1985), re- printed in 10 AIR L. 294, 297 (English tr. 1985). 132 1987] WARSA W CONVENTION LIABILITY LIMIT tic laws. The Convention limit must be raised to ensure both the certainty and adequacy of compensation. Part I of this Note will discuss the history and purpose of the Warsaw Con- vention's limit on liability and the Italian Constitution Court's rejection of this provision in Coccia. Part II will discuss the in- ternational legal ramifications of the Coccia decision. Part III will analyze the need to reform Article 22(1) to rationally relate the limit on liability to the development of international air transportation. This Note concludes that a new liability limit must be formulated to ensure the adequacy and certainty of damage compensation. I. COCCIA AND THE WARSAW CONVENTION LIMITATION ON LIABILITY The liability limit as set by the Convention no longer serves the function of providing a uniform standard of recov- ery. Signatories of the Convention have established independ- ent limits that destroy the efficacy of the system established by the Convention drafters. The decision in Coccia is representa- tive of an outdated system that no longer provides adequate damage compensation to air travelers. A. The History and Purpose of Article 22(1) of the Warsaw Convention In 1929, the drafters of the Warsaw Convention set a lia- bility limit for death and injury resulting from aviation acci- dents at 125,000 Poincare francs (US$16,000), to aid in the de- velopment of the then-infant air transportation industry.4 The limitation afforded carriers a more definite and equitable basis on which to obtain insurance rates and thus resulted in the re- duction of carrier operating expenses.5 This uniform body of worldwide liability rules was intended to supersede the scores of differing domestic laws and thereby set a uniform, reliable, and consistent basis for recovery for injury or damage to per- sons. 6 This limit has since been revised to US$58,000 pursu- 4. See Report of United States Secretary of State Cordell Hull, [1934] U.S. AVIA- TION REV. 240, 242. 5. Id. 6. See Reed v. Wiser, 555 F.2d 1079, 1090 (2d Cir.), cert. denied, 434 U.S. 922 (1977). 134 FORDHAM INTERNATIONAL LA WJOURNAL [Vol. 11:132 ant to the Hague Protocol.7 Today, however, aviation is a multibillion-dollar industry with sufficient insurance coverage to render unnecessary the protection intended by the drafters of the Convention.8 In- deed, no more than a few major states continue to honor an unmodified Convention liability limit.9 There is a trend among signatory nations to raise the liability limit by legislative enact- ment. Several countries have set monetary limits in excess of the ceiling contained in Article 22(1).lo For instance, carriers operating in the United States are subject to a liability limit of US$75,000 pursuant to the 1966 Montreal Agreement." Although such differentiation is allowed under the special con- tract provisions of the Warsaw Convention, it renders Article 22(1) a nullity. The Convention is subverted when certain sig- 2 natories independently establish liability limits.' 7. Hague Protocol, supra note 2, 478 U.N.T.S. 371, 381. 8. See Note, Warsaw Convention Limitations on Air CarrierLiability: A CriticalView, 17 U. MIAMI INTER-AM. L. REV. 577, 592 (1986). 9. Cohen, Montreal Protocol, 8 AIR L. 146, 167 (1983). 10. This principle of increased liability limits in excess of the Warsaw ceiling has been followed by these carriers and countries, which offer or mandate limits equal to or exceeding US$58,000: Air Afrique, Austrian Airlines, Sabena, Burma Airways, Scandinavian Airlines System, TACA, Finnair, Air France, Air India, U.T.A. Luf- thansa, Condor Flugdienst, Irish Government for all Irish Carriers, El Al, Japan Air- lines, Alia Royal Jordanian Airlines, Middle East Airlines, Luxair, Malaysian Airlines, K.L.M., Martinair, Transvia, Air New Zealand, Norwegian Government for all Norwe- gian Airlines, Air Panama, Singapore International Airlines, South African Airways, Iberia, Sweden for all domestic and international flights by Swedish Carriers, Swit- zerland as a licensing condition, Thai International Airlines, and Tunis Air. Id. at 157. 11. The Montreal Agreement of 1966 increased the per passenger liability limi- tation to US$75,000. It affects only the cases of international transportation that, according to the contract of carriage, include a place in the United States as a point of origin, a point of destination, or an agreed stopping place. This agreement is the last widely accepted amendment of the Warsaw Convention. 31 Fed. Reg. 7302 (1966). The Montreal Agreement is a private agreement signed by the airlines under the auspices of the International Air Transport Association (IATA) and the Civil Aero- nautics Board (CAB). Id. 12. The special contract provision is under the authority of Article 22(1) of the Warsaw Convention, which provides that "by special contract, the carrier and the passenger may agree to a higher limit of liability." Warsaw Convention, supra note 1, art. 22(1), 49 Stat. 3000, 3019, T.S. No. 876, at 990, 137 L.N.T.S. I1, 25. 1987] WARSA W CONVENTION LIABILITY LIMIT 135 B. The Italian Constitution Court Response to Worldwide Disaffection with the Article 22(1) Limit in Coccia v. Turkish Airlines In Coccia v. Turkish Airlines,'" the Italian Constitution Court declared Article 22(1) unconstitutional.' 4 In Coccia, the plain- tiffs' daughter was killed on a Turkish Airlines flight from Tur- key to Italy. 15 Plaintiffs initiated legal proceedings before the Tribunal of Rome, 6 claiming full compensation for dam- ages.' 7 The Tribunal subsequently referred the matter of the constitutionality of Article 22(1) to the Constitution Court, which has jurisdiction over questions relating to the legitimacy 8 of formal laws.' The Constitution Court held that the limit established by Article 22(1) violated equal protection guaranteed under the Italian Constitution and provided for inadequate levels of com- pensation.' 9 The Court reasoned that air travelers are denied the compensation available to the users of other equally dan- gerous means of transport, such as sea and rail transport.
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