Air India, Boeing may Face ‘Unlimited' Liability
The Air India Boeing 787 plane that crashed in Ahmedabad on June 12, killed 241 people on board, including 12 crew, and 33 on the ground. Air India has already announced ₹1 crore each as compensation for those killed.
Under the Montreal Convention, the airline is presumed liable and needs to pay a prescribed minimum compensation of 151,800 special drawing rights (SDRs) — an International Monetary Fund-defined unit tied to a currency basket— for death or serious injury in a crash. With one SDR valued at about ₹120, that's as much as ₹1.82 crore per person.
This airline is liable for this base compensation, regardless of fault. Beyond this, if negligence is proven, additional compensation can be sought.
Families of the victims may also file claims in their home countries, including the UK, where courts typically consider future earnings and personal circumstances. The passengers included 181 Indians, 53 Britons, seven Portuguese nationals and one Canadian.
Air India did not comment.
Boeing may also face unlimited liability if a fault with the 787 aircraft is discovered. Payouts could vary based on victims' nationality and income, the experts said.
If there is any evidence of faults with the Boeing 787, Boeing will also face unlimited liability, in the US and English courts, said James Healy-Pratt, aviation specialist on UK-based Keystone Law's international aviation legal team.
Keystone and Chicago-based Wisner Law Firm have commenced an independent investigation into the disaster. Wisner specialises in aviation-related litigation and also advised clients in the 2020 Air India Express crash.
Torts
Negligence-related claims are subject to the jurisdiction of UK courts under tort law, said Ashish Kumar Singh, cofounder and joint managing partner of Capstone Legal. Tort law covers injury or loss caused to a person. 'After adducing evidence, cross examination etc, the court can award compensation which is way beyond the insurance limits under the Montreal Convention,' he said. 'However, this exercise is a tedious one and involves complex questions of fact and law.'
'Air India is liable to the families for unlimited damages, unless they can prove they were not negligent, and only then can they limit their liability to 151,800 SDRs,' said Healy-Pratt. 'The legal presumption is that Air India is liable without limit until there is evidence that it can prove to the contrary.'
Air India has $1.5-billion insurance cover for widebody aircraft, which industry experts believe is sufficient to absorb payouts, though legal battles could push claims higher. 'Investigations can stretch for months to years and, in such cases, claims are settled in tranches — starting with initial compensation, followed by negotiated settlements or litigation outcomes,' said a senior insurance industry executive. 'Even after paying full SDR-based compensation and some additional settlements, the liability pool is not likely to be exhausted.'
However, people in the know said the $1.5-billion liability policy should be sufficient to cover even catastrophic events, unless there are multiple large-scale claims in a single year. 'The liability on the operator, Air India, will have multiple angles — the nationality of the passengers on board will define the minimum liability that is applicable to the operator as per the Montreal Convention,' said Hitesh Girotra, vice president, aviation and specialty lines, Prudent Insurance Brokers. 'Since the aircraft crashed into a residential apartment, there is third-party property damage liability on the operator.'
In 2010, ₹7.6 crore was awarded to the family of a passenger in the Air India Express crash at Mangalore airport that killed 158 people. 'No amount of money can ever compensate families who have lost loved ones, but our international team will be seeking the fullest compensation from all potentially responsible parties,' said Healy-Pratt.
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