MH370 claims could reach $250m

07:25, Apr 04 2014

Malaysia Airlines is wide open to legal action even if no wreckage from missing flight MH370 is ever recovered, aviation lawyers warn.

They say international obligations have been breached in the handling of the crisis.

Under the Montreal Convention, the airline is automatically liable to pay compensation to families of most passengers up to $200,000, but amounts above that are available should families decide to take legal action over the tragedy.

If a lawsuit is brought against Malaysia Airlines, a reverse burden of proof falls on the airline to show, even in the absence of any wreckage being recovered, that the accident was not due to its negligence or was due to the negligence of a third party.

The cap on damages per passenger under the Montreal Convention would no longer apply if negligence was alleged. 

Australian aviation lawyer Joseph Wheeler estimated total damages awarded for MH370 claims could reach US$250 million.


"We are thinking that families will have that high level of proven loss damage available to them if there is no debris, because MAS hasn’t got a chance to prove itself – the evidence isn’t there for them to argue that they weren’t at fault." 

"They can’t argue that something else was at fault, like an aircraft component or a terrorist bombing – something that is potentially not in their control." 

"I think they’re preparing to be sued, to have to fight this, because of how different a situation this is."  

Even if wreckage from MH370 was found, and pilot suicide or an act of terrorism was found to be the cause of the crash, families would still have a claim against the airline, Wheeler said.

"We would argue [Malaysia Airlines] could have, and should have, done more to prevent this happening [in those circumstances]."  

The presence of the two Iranian passengers who boarded the plane using false passports was indicative of larger security concerns, and echoed the situation after 9/11 where airport and security services in the United States were sued for allowing terrorists on board, he said.

 The option of bringing a lawsuit alleging families had suffered psychiatric damage in the form of "nervous shock" over the handling of the investigation and search was also available, Wheeler said.

The International Civil Aviation Organisation’s policy on assistance to families of aircraft accident victims, part of customary international law, demanded families be provided with sufficient information in the event of an accident like MH370.

But the Malaysian government had been "deficient" in how it dealt with families of the 227 passengers on board, and had often withheld information, or issued contradictory statements to families, Wheeler said. 

He pointed to Prime Minister Najib Razak’s announcement on March 24 that the plane had "ended" in the southern Indian Ocean as an event that could contribute to a nervous shock claim.

"The trauma that they’ve suffered these last few weeks, and the information that has trickled out from the government, all could combine in a way that causes psychiatric damage."

The text message sent by Malaysia Airlines to relatives, informing them all 239 people on board the flight had perished, was "more than a little insensitive," Wheeler said. 

Malaysia Airlines’ claim that they had done everything possible to contact family members in person or on the phone, and were forced to resort to text message in some cases was not "fully factually true for all cases, at least some of the ones we have had exposure to," Wheeler said. 

There were other opportunities to notify families that were not taken, he said.

The amount of damages that could be awarded to each family would vary depending on which jurisdiction they chose to bring legal action in, and a number of options were available under the Montreal Convention, Wheeler said. 

The families could choose to bring a lawsuit for the MH370 crash in Malaysia, as the country of the airline and its principal place of business; in China, as the destination of the flight; or in the country where the passenger had their principal and permanent residence, regardless of nationality.

The Perth-based family of Paul Weeks, one of the two New Zealanders on board the plane, could bring legal action in the Australian courts, where the level of damages was essentially unlimited, Wheeler said.

Each family’s claim, and damages awarded, would vary depending on how high their proven losses were.  "How much they earned, how much they were likely to earn in the future, and how much their family members depended on their support are all considered." 

"It is to the extent of what you can prove that you have lost, so one family may be able to prove one million dollars, another family may be able to prove five." 

 But while some families may be eligible for millions of dollars in damages for the loss of their loved one, others may be left with much less, or even nothing.

 Families of Indonesian and Russian passengers would be eligible for less compensation as their countries had not ratified the Montreal Convention, and operated instead under the older Warsaw Convention. But the families of Pouria Nourmohammadi, 18, and Delavar Seyed Mohammad Reza, 29, the Iranian passengers travelling on stolen passports, were likely to be left with nothing as the Montreal Convention does not provide compensation for injury or death of stowaways illegally on the aircraft. 

Their families also have no right to sue Malaysia Airlines for any negligence. 

The Montreal Convention also did not cover compensation for families of the 12 Malaysian crew members, which would be dealt with under their individual employment agreements with Malaysia Airlines, he said.  

Fairfax Media