AVIATION LEGISLATION AMENDMENT (LIABILITY AND INSURANCE) BILL 2020

Minister for Infrastructure, Transport and Regional Development, Michael McCormack has introduced the Aviation Legislation Amendment Bill 2020 to amend the acts governing civil aviation.

The purpose of this Bill is to enhance the operation of Australia’s civil aviation carriers’ liability and insurance framework.

Dedicated aviation liability arrangements are implemented in most countries in recognition of the unique risks associated with civil aviation and the complex task of awarding damages to passengers under civil liability frameworks.

The National Insurance Brokers Association (NIBA) CEO, Dallas Booth said, “The legislation needs to pass the Parliament – not sure when that will be, and will take effect on a date to be proclaimed. We are keeping a close eye on this to monitor things, and will report commencement when it is known.”

In Part IV of the Civil Aviation (Carriers’ Liability) Act 1959 (CACL Act), Australia has implemented a strict liability system for domestic travel that imposes liability on the carrier regardless of any fault, negligence or intention; while providing a cap on the maximum amount the carrier will be liable for.

The liability system in Part IV of the CACL Act also applies to the small number of international flights that are not covered by an international agreement on airline liability, such as the 1999 Montreal Convention. In addition, the Air Accidents (Commonwealth Government Liability) Act 1963 (AA Act) extends the Part IV liability limits so they are applicable to the Commonwealth and certain Commonwealth employees in various circumstances.

Part IVA of the CACL Act establishes a system of mandatory insurance, specifying an amount of insurance per passenger that carriers are required to obtain.

These liability limits and associated insurance requirements do not update automatically and reduce in real terms over time. The Bill will update the liability limits and associated insurance requirements to reflect inflation.

The Bill also includes expanded regulation making powers to enable the quantum of mandatory insurance to be increased by regulation, and to establish a mechanism to expand the type of risks that carriers’ are required to insure to potentially include so called ‘war risks’.

The Bill also includes a technical amendment to clarify that carriers, and servants and agents of the carrier, share the same scope of liability.