The Malaysia Airlines Tragedy and International Law – Part Three

In this my third and final post (for now) on Malaysia Airlines Flight 17 (MH17) and international law, I will look at assigning civil liability for the crash and which party will ultimately be left footing the bill. This is not an easy matter to unravel and it could take the better part of a decade or more to sort everything out, especially if any of the blame can be assigned to Ukraine or Russia (more on that in a moment). As it stands right now, I am writing under the already well-supported assumption that pro-Russian separatist militants operating in eastern Ukraine were the ones who launched the missile strike that brought down MH17. The unknown which may, or may not, alter the nature of my analysis is if Russian military forces were involved and to what extent.

Let’s start with the basics. The international regime for civil liability involving airlines is a mess, though not a complete one. Originally governed by the 1929 Warsaw Convention and its numerous amending protocols, aviation’s liability system received a major upgrade with the 1999 Montreal Convention for the Unification of Certain Rules for International Carriage by Air (not to be confused with the 1971 Montreal Convention related to air crimes which I discussed previously). The problem, however, is that not all of the states which ratified Warsaw and its various amendments have ratified Montreal, and some the states still covered by Warsaw never adopted all of its amendments. Why is this important? Because for the liability rules contained in any of these agreements to apply, both of the states whose citizens are involved in the liability dispute—one the injured party, the other the airline—have to be signatories.

With respect to MH17, Malaysia is a state party to the 1999 Montreal Convention as are the other countries where a substantial majority of the deceased passengers were from: The Netherlands, Australia, Germany, Belgium, and the United States. A small number of Indonesian and Filipino passengers were from non-Montreal signatory states and would, presumably, have to rely upon some iteration of the old Warsaw rules. As such, it is safe to say that most of the litigation surrounding this crash will be based on the Montreal Convention.

So what does Montreal call for? Before turning to that, it’s important to note here that Montreal sets up unified rules; it does not establish a separate international court to interpret those rules and apply them to concrete cases. That is left to the domestic courts of the signatory states—a fact which means that separate cases arising out of the same incident but adjudicated in different national courts could resolve in highly disparate outcomes. Without getting into the intricacies of Montreal’s rules concerning jurisdiction, it should go without saying that plaintiffs routinely attempt to have their cases tried in awards-friendly American courts rather than in other national legal systems which tend to frown on multi-million dollar judgments. Unlike the 1929 Warsaw Convention, Montreal would allow the family of the deceased American passenger on MH17 to sue the airline in a United States court despite the fact the journey originated in the Netherlands and bound for Kuala Lampur, Malaysia.

Assuming a suit is filed against Malaysia Airlines, Article 21 of the Montreal Convention dictates that the carrier is strictly liable for damages of up to 113,100 Special Drawing Rights (SDRs) (roughly $113k) and potentially liable for well in excess of that amount. (The original Montreal amount was 100,000 SDRs, but an elevator clause in the treaty allows this number to be adjusted for inflation as often as every five years.) To hold that Malaysia Airlines is strictly liable does not mean it is absolutely or automatically liable; a plaintiff must still prove damages—an easy burden to meet where the death of a passenger is involved. Beyond the $113k, Montreal holds that an air carrier is presumptively liable for all further damages a plaintiff can prove (i.e., potentially millions of dollars) unless the airline can show that “the damage was not due to the negligence or other wrongful act or omission of the carrier” or that “such damage was solely due to the negligence or other wrongful act or omission of a third party.”

And here’s where the complications begin. With respect to Montreal’s “first escape hatch,” it is extremely difficult to conceive a scenario where a carrier could evade the charge of some negligence unless there was a third-party to blame. But if you examine the “second escape hatch” involving third-party negligence and/or wrongful acts, you will notice that the word “solely” is used. What this means is that even in a scenario where a third-party is, say, 75% negligent and the air carrier only 25%, the airline will not be able to escape paying out further provable damages in excess of 113,100 SDRs.

This is critical to keep in mind with respect to MH17. Yes, it does appear that responsibility for downing MH17 rests heavy on the shoulders of the eastern Ukrainian separatists, but that doesn’t mean—legally speaking at least—all of the responsibility does. Though the airspace in which it operated was not closed, MH17 chose to fly over a combat zone held by militants known to have weapons capable of taking down a commercial jetliner. A number of national civil aviation authorities around the world, including the Federal Aviation Administration, issued warnings to avoid the region, and even before yesterday’s disaster several international airlines had already opted to reroute flights around Ukraine. These facts—and others which are likely to emerge—could be used in a court of law to slam shut Montreal’s escape hatches and keep Malaysian Airlines on the hook for millions upon millions of dollars. That’s good news for potential plaintiffs (and their attorneys), but very bad news for Malaysian Airlines.

Now, you might object here and say, “That’s not fair! The separatists should pay!” Yes, maybe they “should pay,” but this is law, not an ethics discussion. In other scenarios whereby the not-sole negligence of a third-party contributed to an airline crash resulting in passenger death or injury, the airline could seek indemnification from the contributing party to offset its liability. It’s hard to envision how that would feasible with respect to the MH17 incident. Even if the separatists responsible are identified, none are likely to have the financial means to cover much, if any, of Malaysian Airlines’s liability. As the old saying goes, you can’t squeeze blood out of a turnip. Besides, as I noted in my opening post in this series, the parties responsible for bringing down MH17 will likely either end up dead or ensconced in Russia, far beyond the reach of any competent court of law.

Before closing this out, I do want to note that in the unlikely scenario that either the Ukrainian or Russian state were officially involved in the shooting down of MH17, it is possible, though not very likely, that they may face diplomatic pressure to either directly compensate the victims or indemnify Malaysian Airlines. I write “face diplomatic pressure” because a private lawsuit against either state would never succeed. Even a hypothetical state-to-state suit before the International Court of Justice is far-fetched at this point, especially given the court’s rapidly declining prestige in a world that is steadily losing faith in the efficacy of the international order conceived at the close of World War II, and seemingly triumphant after the fall of the Berlin Wall.