Liability is a fluid regime. One of the clearest instances in which this sentiment is apparent is in an aviation context, in which each and every one of you is intricately involved on a day to day basis. It is of vital importance that every one of you understands and appreciates the risk to which you are exposed. Time and time again we are faced with instances of the most dire situation where an operator, pilot, Aircraft Maintenance Organisation (“AMO”) or another player in the field enquire innocently “Why me?”, and quickly try and distance themselves as far as they can from the situation. The fact of the matter is that ignorance does not count, and no matter how far one runs, it is never beyond the reach of the law. In today’s market and ever-expanding field of aviation, every player needs to acknowledge their role, stand up and be accounted for.

The law is full of grey areas and loopholes, but it is something which every person needs to come to grips with. We have found that the best way in which to convey legal principles is not through legalise, reciting portions of legislation and judgments or even (shock, horror) through waxing lyrical in latin. Hopefully through practical examples and “real-life” matters in which we have been involved, we can help you prevent having your business shut down and houses taken from under you, and at the very least create an awareness of your exposure. A team of responsible, trained players makes for a successful game…

GROUNDS OF LIABILITY

Hangar keepers
Let’s start at the very beginning – before engines have been started, and flight has commenced… let’s start at the hangar. Most operators give very little thought to the legal regime surrounding the hangarage of an aircraft and more often than not standard contracts are signed, and disclaimer boards are ignored. This is true despite the simple inevitable fact that 90% of the time an aircraft is not in flight, it is being hangared. There is no doubt that an aircraft is an expensive asset, making a hangar a very expensive parking lot. Your most prized possession may sustain damage in a simple towing mishap, or a misguided parking attempt, not to mention theft and the like. It is only in these instances that people become alive to the relationship between a Hangar Keeper and its customer, by which stage it is generally too late. Hangar services are by and large governed by a Hangarage Agreement – a contract in which the rights and remedies of the parties are governed. How many of you have actually read a Hangarage Agreement? Would you be surprised to find out that most Agreements exclude liability on the part of the Hangar Keeper, leaving the customer with a damaged aircraft and no legal remedy regardless of negligence? Some agreements even go further to include a clause by which a customer indemnifies a Hangar Keeper against third party claims – What does this mean? Simply put, imagine the owner of an aircraft leases it to an operator who in turn employs the services of a Hangar Keeper. The aircraft is negligently damaged whilst in hangarage, the owner suffers material damage (cost of repair) and brings action against the Hangar Keeper. The effect of the indemnity… the Hangar Keeper is fully entitled to call upon the operator to take out their cheque book! Moral of the story – read and understand your Hangarage Agreements. Remember the agreement is a contract: a document which envisages negotiation and a meeting of the minds.

Maintenance organisations
Similar contracts exist in the maintenance arena in the form of job-cards, invoices etc. Again, liability on the part of the AMO is often excluded for both damage caused to the aircraft whilst in its possession and control, as well as consequential damages as a result of any substandard work performed. Disclaimer boards displayed in the workshops and hangars of AMO’s may also form the basis of a contract, provided they are prominently displayed and clearly worded. However, more often than not these disclaimers contain only the infamous “Own Risk” clause, and thus only relate to damage occasioned whilst the aircraft is with the AMO.

AMO’s owe a duty of care to not only operators and customers, but to all potential passengers of that aircraft. Negligent work, for example failing to secure a fuel pipe or ensuring that the plastic packaging of a replacement part is removed, may well result is disastrous consequences leaving owners minus an aircraft and passengers injured. Negligence on the part of an AMO is a breach of the duty of care they owe to the world at large, upon which a successful claim may be brought. Contractual arrangements only go so far as the operator or owner, and may never absolve an AMO, or indeed the individual Aircraft Maintenance Engineer (“AME”), from being answerable to passengers or other third parties. Claimant’s attorneys are becoming very alive to the fact that many incidents involve a maintenance angle, and are increasingly citing AMO’s and AME’s as second or third defendants in a claim.

Aircraft manufacturers
Without spending too much time on the exposure of manufacturers of airframes, engines and the like, the point must be made that where an incident is caused by a defect in the design or manufacture of a product – manufacturers are at risk. As with AMO’s, the duty of a manufacturer of a product is far-reaching and extends to passengers and third parties, and is not limited only to the purchaser of the product.

Pilots
It goes without saying that in most incidents involving passengers, pilots together with the operator, are frontrunners in the firing line. Many pilots simply retort “I have nothing – do your worst!”, but not for much longer. Insurers, claimants and operators have of late begun to see through this farce and demand that pilots stand up and be held accountable for their actions. This may be through a suspension or revoking of a licence (and often the livelihood), a sanction or restriction of a licence, a monetary contribution, or any combination of these three. Furthermore, one must be alive to the fact that a judgment is good for 30 years, so if a pilot wins the lotto 25 years on, their negligent actions will come back to bite them. We are seeing on an increasing scale pilots being sued by claimants as a second defendant, or joined to legal proceedings by operators. As the link between passengers and the aviation domain, pilots must understand their exposure and take responsibility for their actions. Pilot culpability is one of the leading causes of aircraft crashes, and whilst one cannot adopt an armchair attitude, there are certain duties owed by a pilot that must be discharged in a responsible manner. There are hundreds or thousands of regulations governing the in’s and out’s of piloting an aircraft, standards to be upheld, inspections to be conducted, calculations to be made etc, all of which point to the duty owed by a pilot. But the simplest easiest way to determine whether a pilot has been negligent is to ask: what would the reasonable pilot in that situation have done? Failure to conduct themselves in the manner of the reasonable pilot in the circumstances equates to negligence.

Operators
Operators, be it an airline or a small charter company, are faced with enormous liability exposure. Invariably an injured passenger, or the family of a deceased passenger, will adopt the attitude “I was an innocent passenger flown in your aircraft by your pilot, and I was involved in a crash in which I sustained injury – now pay up”. Passengers are not interested in technicalities like true ownership, employment relationships, sudden emergency, tickets etc. Whilst all of these may have bearing on the validity of a claim against an operator, they are more often than not non-factors in a passenger’s mind when determining whether to lodge a claim.

The duty owed by an operator to a passenger is an onerous one. A passenger is a so called “innocent party”, and need only establish 1% negligence against an operator, and / or the pilot (as the operator’s employee) to found a successful claim in delict.

Passenger tickets should be issued by each and every operator involved in commercial activities, setting out certain details of that operator. Many tickets go further and include exclusions and limitations of liability. Whilst it is, in South Africa, possible for an operator to contract out of liability for domestic flights, certain requirements in terms of clear wording, layout, negotiation etc must be met before the terms will stick. From 2010 with the advent of the Consumer Protection Act, the disclaimer requirements will be much more onerous. Even where an operator successfully manages to contract out of liability through a ticket, this exclusion does not extend to the claims of dependants of passengers and other third parties.

Registered owners
As you all know, the Civil Aviation Regulations require that the Commissioner for Civil Aviation keep a register containing the details of the registered owner of each ZS-registered aircraft. Section 11 of the Aviation Act of 1962 imposes on the registered owner strict, or faultless, liability for so-called “surface damage”. This provision appears as Section 8 of the new Aviation Act coming into force in November this year. “Surface damage” is material damage on the ground or water caused by an aircraft. This section does not apply to passenger liability. Essentially the effect of the section is that a third party who suffers damage to person or property on the ground caused by an aircraft, a part thereof, or even a particle falling therefrom, need only prove a) the event; b) the identity of the registered owner; and c) the quantum or amount of the damage. The need for such a provision arose during the First World War where persons, who suffered extensive damage to houses, cars, and person cause by caused by aircraft, were left remediless by virtue of the fact that they were not aware of the circumstances surrounding the damage. Most first world jurisdictions have adopted similar type pieces of legislation into their domestic law to create a remedy in these circumstances. The section has been interpreted in a very wide manner, and the New Zealand High Court in Walker v WeedAir held that damage to crops caused by herbicide sprayed on a neighbouring farm, fell under the auspice of an identically worded section. Registered owners have no defence to such a claim, however they may transfer the liability to the lessee of the aircraft. One quick point worth mentioning is that the registered owner of an aircraft may not necessarily be the true owner thereof. An example of this is where a financier of an aircraft retains ownership until payment is made in full. In this case whilst the financier may be the true owner of the aircraft, 9 times out of 10, the borrower will be the registered owner.



Aerodrome operators
The last category of aviation player I wish to discuss briefly is that of the airfield owner or aerodrome operator. In South Africa there are both public or registered, and private airstrips. The duty of care owed by the operators differ somewhat, but as a starting point both owe a duty to users and potential users of that airfield. The Civil Aviation Regulations detail the obligations of an aerodrome operator, which regulations again point to the extent of the duty owned to users of that airfield. Whilst the South African courts have time after time upheld the notion of a high standard to be maintenained by the operators of airfields, negligence is still an element to be established by a potential claimant. That said, our courts have found in favour of claimants who have suffered damage when their aircraft were operated to strips with meerkat holes, roaming cattle, and concrete and trench barriers. In Van der Merwe v the Town Council of Nelspruit, the court held that because of the nature of flying, pilots have a greater expectation than motorists that warning signs will be displayed when there are dangers present. The court went on to note that, in the absence of warnings, a pilot coming in to a public airport is virtually entitled to assume that there are no hazards which are controllable by the airport authorities in the way of landing. Whilst pilots must keep their eyes open for any aircraft on the ground or in the circuit, they can safely assume that the landing ground itself is not dangerous. Aerodrome operators take note.

PERSONAL INJURY CLAIMS AND THE CONVENTIONS

I have discussed the grounds upon which actions may be founded against the various players in the market. I now turn to the claims themselves. Undoubtedly the most topical type of claim is that for personal injury brought by a passenger, or in the event of a fatality, the dependants of that passenger, involved in a crash.

Without delving too much into the insurance sphere, it is of vital importance that an operator, owner, pilot etc identify the “types” of passengers flown, be it foreigners, businessperson, tourists etc. Once this identification process is complete, one can learn to appreciate the liability risk to which they are exposed in the event of a mishap. Foreigners are flocking in by the dozens to explore and safari Southern and the rest of Africa. This is bound to increase exponentially during 2010 thanks to the World Cup. The business is welcomed, but you all need to appreciate what this does to your exposure. R 5 million or R 10 million liability cover on a Cessna 210 is simply no longer adequate… in fact it is not nearly sufficient. We are currently dealing with a claim by an unemployed American woman who sustained orthopaedic (back) injury whilst being conveyed in an aircraft that sustained a loss of power – take a guess at what is being claimed… the equivalent of US$ 6,5 million (R 47 million) and counting!

What operators fail to acknowledge is that foreign passengers injured are fully entitled to receive medical treatment in their country of residence, and to claim the cost thereof in Dollars, Euros, Pounds or the like, from the South African operator doing business in South African Rands. The same goes for claims for loss of earnings… just think about the value of the claim of a 40-year old Swiss banker with a wife and two minor children who, by virtue of injuries sustained in a crash, is now home- and bed-bound.

Not only are claimants entitled to medical treatment abroad, but in certain instances may actually litigate against a South African operator in their country of residence. Of late, we have had to advise a number of South African operators to avoid jurisdictions such as the United States and the UK for risk of being brought before those courts.

In South Africa alone, the awards granted by our courts in respect of personal injury claims are on the rise…a very steep rise. How much do you think a broken leg is worth? Try R 980 000.00according to the then Appellate Division in Protea Assurance v Lamb. A broken arm? R 530 000.00 says the then-Eastern Cape Local Division in Rademeyer v Rondalia. A toe? R 215 000.00 (Hartley v Union and South Western Africa Insurance). Fingertips? R 80 000.00 a piece (Robinson v Rosman). To put it in perspective, we are currently facing a claim for R2.2 million for a slip-and-trip.

There has also been a spike in dependency claims brought by family members of passengers who have died in a crash. A claim in excess of US$ 6 000 000 (i.e. roughly R 43 million) has come across our desks following the untimely death of a 53 year old English Sales Manager, who was married with two children; followed shortly by an only slightly lower claim of US$ 5 300 000 (R 38 000 000.00) being made by the family of a 50 year old Congolese Medical Doctor, also married and father to four children. Multiply claims along these lines by 19 passengers in a Beechcraft 1900 and one’s potentially exposed to claims of US$ 115 000 000.00 (or R 828 million)!! After having counted all the zeros in the claim, you will appreciate that R 5 million or R 10 million liability cover just does not cut it.

Touching briefly on the International Conventions governing cross-border flights, the Montreal and (in certain instances now-superseded) Warsaw Conventions. Whilst an operator’s liability to passengers on international flights was limited to ₣250 000.00 (equivalent of R 100 500.00) under Article 22 of the Warsaw Convention, the tables have been turned 180° under Montreal. The Convention is passenger-friendly to say the least, and allows for no defence to be raised by an operator in facing claims up to the equivalent of roughly R 1 000 000.00. After this threshold has been reached, the onus of deflecting claims is placed squarely on the operator, where in the normal course it would be on the plaintiff. Essentially, in respect of claims up to R 1 000 000.00, take out your chequebook. And for claims above that an operator is guilty until proven innocent. One more thing, any attempt to contract out of this liability though tickets etc is null and void.

Hopefully I have at least created an awareness of what is happening out there in the world of liability. With a proper understanding and appreciation of the types of risks exposed to, adequate and sufficient measures of protection can be put in place. Without taking the first step, how can you reach the second? The aviation game is on the move, ever expanding, and players who run from the ball don’t stay in the game forever…