Bills Digest No. 96   1997-98 Civil Aviation Legislation Amendment Bill 1997

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This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.


Passage History

Civil Aviation Legislation Amendment Bill 1997

Date Introduced: 22 October 1997
House: House of Representatives
Portfolio: Transport and Regional Development
Commencement: This Act commences upon receipt of Royal Assent. However, Schedule 3 and Item 2 of Schedule 2 are deemed to have commenced on 6 July 1995. Schedule 4 is deemed to have commenced on 6 November 1995.


This Bill is intended to simplify the nation-wide administration and enforcement of the requirement for all domestic and Australian international carriers to have continuous passenger liability insurance.The Bill also makes a number of minor formal and typographical amendments to other aviation-related legislation.


The question of airline passenger liability insurance has always been of concern to Parliamentarians.However, the relatively recent Monarch and Seaview aircraft crashes highlighted both the inadequacy of the amount of insurance cover and the difficulties faced by the families of victims in receiving compensation.

Over the past three years, a number of initiatives have been taken to address these issues.The passenger liability limit has been increased, through Regulations, and the Principal Act has been amended to require that all airline operators take out mandatory, no-fault insurance.

Prior to 1994, the maximum liability limit in respect of death or injury to aircraft passengers had been $180 000. In October 1994, under Regulations made pursuant to the Civil Aviation (Carriers' Liability) Act 1959, the limit of passenger liability was raised to $500 000 for domestic carriers.In subsequent Regulations, a $500,000 limit was also imposed on Australian international carriers and foreign carriers whose states of registry were not parties to the Warsaw Convention.Australia cannot, under the terms of its international obligations under that Convention, legally impose higher liability limits in respect of international carriers from countries which are party to the Convention. However, such carriers were asked to voluntarily raise their limit to $500,000.

Furthermore, the Transport Legislation Amendment Act (No. 2) 1995 introduced mandatory, no-fault insurance cover.No operator is allowed to carry passengers for hire or reward without appropriate insurance cover. The Act authorises the Minister for Transport to require operators to provide evidence of compliance with these insurance obligations.Curently, this authority is delegated to the Civil Aviation Safety Authority (CASA), which is responsible for administering the carrier liability arrangements.As a result of possible constitutional limits on the power of Commonwealth to extend this legislation to intrastate aircraft operations, the States agreed to implement complementary legislation on a uniform basis within their jurisdictions.

The current Bill contains provisions to streamline the administration of this regime and to strengthen enforcement.Firstly, CASA would be authorised to directly administer both the Commonwealth's carriers' liability legislation and the complementary State legislation rather than doing so under delegation from the Minister for Transport.Secondly, the Bill would impose conditions upon Air Operator's Certificates (AOCs), requiring that operators continuously hold the mandatory non-voidable passenger liability insurance required under the Carriers Liability Act.(1) CASA would be empowered to suspend or cancel AOCs if this condition were breached.

The Bill would also permit the States to confer functions and powers on Commonwealth officers under their own mandatory passenger liability legislation.In particular, this would enable offences against State legislation to be prosecuted as if they were offences against the Commonwealth legislation.

Since passengers may be carried in aircraft operated by the Commonwealth and the States, the current legislation would require these governments to also take out commercial insurance.This Bill would allow Australian governments to self-insure their risks under the Carriers' Liability Act, just as they self-insure against many other risks.However, governments must satisfy CASA that arrangements have been put into place to cover passenger liability in the event of an accident.

Main Provisions

Clause 1 of the Bill repeals and replaces section 7 of the Principal Act, with the effect of extending the binding legislation to the governments of the Australian Capital Territory, the Northern Territory and Norfolk Island.

Clause 5 would amend subsection 41(C)(1) of the Principal Act to empower CASA, in place of the Minister, to require a carrier to provide evidence of appropriate liability insurance.The amendment also removes carriers owned or operated by governments from the requirement to provide such evidence.However other proposed amendments ensure that such governments implement appropriate arrangements relating to compensation in the event of an accident.

Clause 6 amends sections 41C, 41J and 41K to empower officers of CASA to directly administer the passenger liability insurance scheme, rather than under delegation from the Minister for Transport.

Clause 7 inserts a new section 41CA into the Principal Act.This requires governments which operate air services to provide evidence to CASA, if requested, that appropriate arrangements relating to compensation in the event of an accident have been put in place.

Clause 12 inserts a new section 41N into the Principal Act which will authorise the States to confer functions and powers under their own mandatory insurance legislation on officers of the Commonwealth.This will assist CASA to administer the scheme on a nation-wide basis but would also permit the Commonwealth Director of Public Prosecutions to prosecute offences against the State laws.

Schedules 2, 3 and 4 of the Bill include minor amendments to the Civil Aviation Act 1988, the Civil Aviation Legislation Amendment Act 1995 and the Competition Policy Reform Act 1995 respectively.For the most part, these amendments simply clarify meaning, correct typographical errors or repeal anachronistic provisions.

However, item 3 of Schedule 2 amends paragraph 28BA(1)(a) of the Civil Aviation Act to ensure that failure by an AOC holder to provide passenger liability insurance can result in the AOC being cancelled or suspended by CASA.

Concluding Comments

The proposals in this Bill essentially only make mechanical changes to the carriers' liability insurance arrangements.However, they do have the effect of strengthening enforcement of the scheme and streamlining its administration by the Civil Aviation Safety Authority.


  1. AOCs are important instruments used by CASA to regulate safety in the aviation industry. CASA issues an AOC only if it is of the view that and aircraft's operations, maintenance and airworthiness are of a standard that CASA considers necessary in the interests of safe air navigation.

Contact Officer and Copyright Details

Denis James
4 November 1997
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 1997

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Published by the Department of the Parliamentary Library, 1997.

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Last updated: 12 November 1997

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