how much compensation and who pays

In these circumstances, how much compensation is payable for the death of passengers on board the flight, and who pays? How can the cases in which MH17 was brought down be avoided in the future?

And what about Malaysia Airlines? Before the crash, the airline was already in trouble following the loss of flight MH370. The airline has just been nationalized.

Liability for passenger death

Liability for the death of passengers on board an international flight is determined by reference to international aviation treaties. The 1929 Warsaw Convention was the first of these treaties. The most recent is the 1999 Montreal Convention.

Each air carrier liability treaty since 1929 has been more favorable to the passenger. The Montreal Convention “modernises and consolidates” Warsaw and related legal instruments. It is the most “passenger friendly” treaty in the Warsaw-Montreal regime.

Which treaty applies?

The treaty or treaties that apply to passengers on MH17 are determined by finding the same accord in place at the point of departure and the passenger’s final destination. For MH17, that will generally be the Montreal Convention.

MH17 passengers may also be subject to different liability regimes. MH17 crashed while flying from Amsterdam to Kuala Lumpur. The Montreal Convention would apply to passengers on that ticketed one-way or return flight; both Malaysia and the Netherlands are parties to that convention.

However, while 236 of the 283 passengers on board MH17 were of either Dutch or Malaysian nationality, the remaining 47 passengers (including 27 of Australian race) were made up of races from eight other nations.

For many passengers on MH17, and regardless of residence, their journey – their “ticketed” journey – may have been more extensive than the Amsterdam-Kuala Lumpur flight, and other, less favorable liability regimes may apply. To determine liability, one looks for the same treaty in place at the beginning and end of a passenger’s total journey.

Liability for passenger death – potentially unlimited

Article 17 of the Montreal Convention provides that a carrier:

… is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.

Death or injury must be caused by an “accident.” The most widely and generally accepted definition of an accident is set out in the decision in Air France v Saks, in which the US Supreme Court stated that liability under Article 17:

… arises only if a passenger’s injury [or death] is caused by an unexpected or unusual event or happening that is external to the passenger.

Under Article 21 of the Montreal Convention, for damages arising under Article 17 not exceeding 113,100 SDRs (or about US$173,000) per passenger, the carrier cannot exclude or limit its liability. An SDR or “special drawing right” is an IMF-created international reserve asset based on a basket of four international currencies. A passenger need not prove negligence.

However, a carrier’s liability – Malaysia Airlines’ liability – is potentially unlimited unless it can prove (and the burden of proof is with the airline) that damage “was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents” or that such damage was solely due to the negligence or other wrongful act or omission of a third party.

And that’s a problem.

Negligence or wrongful act?

It may be difficult for Malaysia Airlines to prove that it was not negligent or that it did not commit a wrongful act. The issue is whether MH17 flew within restricted or controlled airspace or whether it was reasonable, given the conflict below, for it to choose the flight path it did.

In terms of the latter – whether it was reasonable for Malaysia Airlines to choose the flight path it did – airlines clearly had adopted different approaches. Qantas, British Airways, and other international carriers had stopped flights over the region; Malaysia Airlines (obviously), Air France-KLM, Lufthansa, and others continued to fly this route.

After the downing of MH17, almost no airlines flew over the war zone (above), but it was a different story before the tragedy. FlightRadar24

In essence, was the region a safe place over which to fly? Or was Malaysia Airlines negligent in choosing to fly over a war zone, and thus, is it facing unlimited liability? As one aviation lawyer has stated:

It is a million-dollar question, and … that will be the big fight.

It is also a matter that the UN aviation body, the International Civil Aviation Organisation (ICAO), has taken up. ICAO met on July 29 to review risks to civilian aircraft operating to, from and over conflict zones. In typical ICAO fashion, it established a taskforce and convened a “high-level safety conference” in February 2015 to look at ways in which potential risks to civil aviation arising from conflict zones can be mitigated.