Bills Digest No.
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Law and Bills Digest Section
Purpose of the Bill
Policy position of non-government
Position of major interest groups
Statement of Compatibility with Human
Key issues and provisions
Date introduced: 13
House: House of
Transport and Regional Development
single day to be fixed by proclamation. However, if those amendments do not
commence within 6 months of the Bill receiving Royal Assent, then those
amendments will be taken to have commenced on the day after that period.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
All hyperlinks in this Bills Digest are correct as
at June 2020.
Purpose of the Bill
The purpose of the Aviation Legislation Amendment
(Liability and Insurance) Bill 2020 (the Bill) is to amend the Civil Aviation (Carriers’
Liability) Act 1959 (Carriers’ Liability Act) to:
the cap on carriers’ liability for death or bodily injury of passengers on
domestic flights, as well as the corresponding level of insurance required, to
reflect the rate of inflation (from $725,000 to $925,000)
the liability limit for the destruction or loss of registered baggage (from
$900 to $3,000) and non-registered baggage (from $90 to $300).
the ‘quantum of mandatory insurance to be increased by regulation’
a mechanism to broaden the capture of risks that carriers are required to
insure so as to potentially include ‘war risks’ (currently, similar to
international air carriage, a domestic carrier is liable for damages sustained
by reason of the death of the passenger or any bodily injury suffered by the
passenger resulting from an ‘accident’) and
technical amendments clarifying that ‘that carriers, and servants and agents of
the carrier, share the same scope of liability’.
It also amends the Air Accidents
(Commonwealth Government Liability) Act 1963 (Air Accidents Act)
so that Part IV liability limits are apply to the Commonwealth and certain
Commonwealth employees in various circumstances.
Most countries have in place dedicated aviation liability
arrangements in recognition of the unique risks associated with civil aviation,
the desirability of a standardised approach to this issue and the complex task
of awarding damages to passengers using domestic civil liability frameworks.
Australia's carriers' liability and insurance arrangements
are set out in the Carriers’ Liability Act. The Carriers’ Liability Act
gives the force of law to various carrier liability frameworks based on
provisions in treaties to which Australia has signed and ratified including:
This was implemented in Australia by the Civil Aviation Legislation
Amendment (1999 Montreal Convention and Other Measures) Act 2008 and came
into effect on the 24 January 2009.
The Montreal Convention (given force to in section 9B of the Carriers’
Liability Act) applies to commercial international carriage of
persons, baggage and cargo performed by aircraft for reward, between countries
which have implemented the Convention
- the Warsaw
Convention (1929) and its amending instruments; the Hague
Protocol (1955) (ratified 1959),
(ratified 1964) and the Montreal
Protocol No 4 (1975) (ratified 1998). This Convention signified the
commencement of an international framework for the rules of liability governing
international carriage of persons, baggage and cargo by aircraft. It is given
force to in section 21 of the Carriers’ Liability Act (without the Hague
- the Tokyo
Provisions of the Tokyo Convention are implemented by the Crimes (Aviation)
Different liability frameworks apply depending on the
origin and destination of travel.
Part IV of the Carriers’ Liability Act provides a
strict liability scheme of compensation for passenger injury or death, as a
result of an accident, so far as it is caused by an accident taking place on
board an aircraft, or in the course of embarkation or disembarkation.
It also covers liability for damage to baggage
and air cargo in respect of travel between the states and territories of
Each of the states has enacted complementary legislation
which applies Part IV of the Carriers’ Liability Act to travel within
Together, the Commonwealth and state enactments create a national uniform
scheme with regard to domestic carriers’ liability.
The Carriers’ Liability Act does not apply to
damages suffered by third parties on the ground. ‘Liability arrangements for
third party (surface) victims are outlined in the Damage by Aircraft Act 1999
(the DBA Act).’ 
Civil Aviation (Carriers' Liability) Review
The Department of Infrastructure, Transport, Regional
Development and Communications (the Department of Infrastructure) conducted a review
of key aspects of Australia's aviation insurance and liability framework under
the Carriers' Liability Act. As part of this review, the (then) Department
of Infrastructure, Regional Development and Cities published a discussion paper
in July 2018 (Civil
Aviation Carriers' Liability) to gather stakeholder views and feedback.
The main focus of the discussion paper was on:
- updating liability thresholds under the CACL Act.
- reviewing the Civil Aviation (Carriers' Liability) Regulations 1991.
- reviewing current insurance exclusions, particularly War Risk.
Following consideration of the responses to the discussion
paper and with the current iteration of regulations due to sunset in October
2019, it was proposed the regulations be remade largely in the same form, with
updates to liability limits and reflecting modern drafting language and
An Exposure Draft of the updated CACL Regulations was
released with a call for submissions by 31 July 2019.
The updated liability limits came into effect on 1 October
2019 in the Civil Aviation (Carriers' Liability) Regulations 2019. These are
reflected in the proposed amendments in this Bill.
At its meeting on 13 May 2020, the Senate Selection of
Bills Committee determined that the Bill not be referred to any committee for
inquiry and report.
Standing Committee for the Scrutiny of Bills
In its Scrutiny Digest 7 of 2020, the Scrutiny of Bills
Committee stated that it had no comment on the Bill.
position of non-government parties/independents
At the time of writing, non-government parties and
independent members of Parliament do not appear to have commented publicly on
major interest groups
At the time of writing, interest groups do not appear to
have commented publicly on the Bill.
According to the Explanatory Memorandum, the proposed
amendments will have no financial impact.
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights has
stated that the Bill does not raise human rights concerns.
Accidents (Commonwealth Government Liability) Act 1963
The Air Accidents (Commonwealth Government Liability)
Act 1963 (Air Accidents Act) is a discrete and dedicated liability
framework for air accidents associated with Commonwealth aircraft and/or
Commonwealth employees. It was created to address the inadequacies of the Warsaw
Convention which has a ‘relatively low compensation cap for death or injury
caused by an air accident.’ It did this by ‘extending a damages cap comparable
to the framework for domestic flights under Part IV of the Carriers’ Liability
Act to victims of air accidents in some circumstances’, and maintain that
parity in cap but only where that was done by way of a change in the Regulations.
Part II of the Air Accidents Act deals with carriage
of a passenger in aircraft operated by the Commonwealth or a
that is not covered by Part IV of the Carriers’ Liability Act 1959.
Subsection 8(1) states that there will be a maximum liability of the
Commonwealth or a Commonwealth authority in respect of any passenger who dies
or experiences an injury as a result of an accident. Paragraph 8(1)(a) specifies
that maximum amount while paragraph 8(1)(b) provides that where a higher amount
is set by regulation under the Aviation Liability Regulations, then that higher
amount shall apply.
Item 1 repeals paragraphs 8(1)(a) and (b) and replaces
them with substituted paragraphs to ensure the liability limit is the higher of
the amount specified in the Civil Aviation (Carriers’ Liability) Act 1959
or any Regulations made under that Act.
Part II of the Air Accidents Act deals with carriage
of a passenger in aircraft not operated by the Commonwealth or a
Subsection 14(1) states that there will be a liability limit of the Commonwealth
or a Commonwealth authority in respect of any passenger who dies or experiences
an injury as a result of an accident. Paragraph 14(1)(a) specifies the liability
limit while paragraph 14(1)(b) provides that where a higher amount is set by
regulation under the Aviation Liability Regulations, then that higher amount shall
apply. Item 2 repeals paragraphs 14(1)(a) and (b) and replaces them with
substituted paragraphs to ensure the liability limit is the higher of the
amount specified in the Carriers’ Liability Act or any Regulations made
under that Act.
Aviation (Carriers’ Liability) Act 1959
Liability limit for death or injury
Subsection 31(1) of the Carriers’ Liability Act
provides that there will be a maximum liability for a domestic carrier in
respect of any passenger who dies or experiences an injury as a result of an
Item 3 repeals paragraph 31(1)(a) of the Carriers’
Liability Act, which provides for a liability limit of $725,000 and
replaces it with a new paragraph that increases the liability amount to
$925,000 (as provided under new subsection 31(1AA) (item 7)). If
a higher amount is prescribed by Regulation, or if the contract of carriage
specified a higher amount, then the higher amount will apply, in accordance
with the proposed paragraphs (b), (c) or (d).
Subsection 31(1A) of the Carriers’ Liability Act
provides that there will be a maximum liability for an international carrier
in respect of any passenger who dies or experiences an injury as a result of an
Item 8 repeals paragraph 31(1A)(a) of the Carriers’
Liability Act, which provides for a liability limit of 260,000 Special
Drawing Rights (SDRs)
and replaces it with a new paragraph that increases the liability amount to 480,000
SDRs (currently approximately AU$975,000) (as provided under new subsection
31(1AB) (item 12). If a higher amount is prescribed by Regulation,
or if the contract of carriage specified a higher amount, then the higher
amount will apply, in accordance with the proposed paragraphs (b), (c)
Liability limit for registered baggage
The liability limit under subsection 31(2) of the Act for
claims for damage or loss of checked baggage applicable to domestic carriers
and international flights (not covered by certain international agreements) increased
from AU$1,600 to AU$3,000.
If a higher amount is prescribed by Regulation, then the higher amount shall
apply. In relation to unchecked baggage under subsection 31(3), the liability
limit has been increased from AU$160 to AU$300.
If a higher amount is prescribed by Regulation, then the higher amount shall
For the purposes of subsection 41C(3)(aa) of the Act, the
amount of personal injury indemnity insurance that an Australian air carrier
must have in respect of each passenger is proposed to be increased from 260,000
SDRs (approximately AUD$519,676.96) to 480,000 SDRs (approximately AUD$959,403.62).
However, if a higher amount is prescribed by Regulation, then the higher amount
Part IVA of the Carriers’
Liability Act makes it a requirement for carriers to hold, in respect of
carriage to which Part IA, II, III or IV applies, sufficient insurance to
ensure that compensation within the limits of liability prescribed by the Act
will be paid in respect of death or personal injury suffered by passengers on
Section 41D provides that an insurer’s liability is not
affected by any warranty or exclusion in the contract of insurance or by any
breach of the contract of insurance by the carrier, except as prescribed by the
Item 27 inserts at the end of section 41D, a new
heading which states ‘Regulations may provide for Secretary to determine
exclusions’. Under this heading are inserted new subsections which expand
the regulation-making power relating to the scope of mandatory insurance that
airlines must obtain, by providing that the Secretary may make determinations
in relation to permitted exclusions of liability,
and for the Secretary to delegate that power to SES employees in the
The Explanatory Memorandum states:
The regulations refer to a range of permitted exclusion
clauses, some of which relate to so called “war risks”. This effectively means
carriers are not required to obtain insurance against these risks.
The expansion of regulation-making powers under this
amendment ‘will enable the regulations to be revised to make war risk insurance
Existing subsection 33(1) provides that if an action in respect
of any damage is brought against a servant or agent of a carrier, the servant
or agent, if the person is able to prove they acted within the scope of their
employment or authority, is entitled to ‘avail themselves of the limits of
liability,’ if any, which the carrier would be entitled to invoke under
in an action against the carrier in respect of that damage [emphasis added].
Item 28 seeks to clarify that a carrier, and their servants
and agents, share the same scope of liability by stipulating that
servants and agents of the carrier can avail themselves of the same
‘conditions’ of liability in addition to the ‘limits’ of liability applicable
to air carriers.
. Legal costs are in addition to this liability limit.
. These baggage limits have not been updated since 1994.
. Explanatory Memorandum, Aviation
Legislation Amendment (Liability and Insurance) Bill 2020, p. 5.
for the Unification of Certain Rules for International Carriage by Air, done at Montreal on 28 May 1999. Ratified in 2008 and effective in
2009. The text of the Montreal Convention is set out in Schedule 5 to
the Carriers’ Liability Act.
The Montreal Convention is an international agreement which
updates laws relating to carriers' liability. It is designed to replace the
complicated and outdated ‘Warsaw System’ of carriers' liability.
. Further information on the Civil Aviation Legislation
Amendment (1999 Montreal Convention and Other Measures) Act 2008 is set out
in the relevant Bills Digest: J Tomaras, Civil Aviation Legislation Amendment (1999 Montreal Convention and
Other Measures) Bill 2008, Bills digest, 99,
2007–08, Parliamentary Library, Canberra, 2008.
. Given force to in section 11 of the Carriers’ Liability
. Given force to in section 25A of the Carriers’ Liability
. Convention on Offences and certain other Acts Committed on
board Aircraft, signed in Tokyo on 14 September 1963. Ratified in 1970.
The Tokyo Convention
creates and seeks to mainstream the approach to acts on board aircraft which are
offences against penal law, or which may or do jeopardise the safety of
aircraft and persons or property on board, or good order and discipline on
board. One significant issue regulated by the Tokyo Convention, is that of the
immunity (from liability in subsequent proceedings ) of the persons who are authorised
by the Convention to take certain measures, for the protection of life and
safety in the aircraft.
. M Brooks, ‘Australia to implement Montreal Convention’, Aviation Business Asia Pacific, June/July 2008, p. 39.
. An airline is strictly liable if a passenger’s checked baggage
is lost, delayed or damaged, regardless of fault, if the loss or damage
airlines took place on board the aircraft or during any period within which the
checked baggage was in the charge of the carrier.
. Part IV also covers international airline travel where the Montreal
Convention, the Warsaw Convention, the Hague Protocol, the Montreal
Protocol No. 4 or the Guadalajara Convention does not apply.
. Department of Infrastructure, Transport, Regional Development
and Communications (DITRDC), ‘Air Carriers' Liability and Insurance’,
DITRDC website, last updated 24 September 2019.
. Civil Aviation (Carriers’ Liability)
Act 1967 (NSW), Civil Aviation (Carriers’ Liability) Act 1964 (Qld), Civil Aviation (Carriers’ Liability)
Act 1962 (SA), Civil Aviation (Carriers’ Liability)
Act 1963 (Tas), Civil Aviation (Carriers’ Liability)
Act 1961 (Vic), Civil Aviation (Carriers’ Liability
Act) 1961 (WA).
. DITRDC, ‘Air Carriers' Liability and Insurance’,
. Department of Infrastructure, Regional Development and Cities
(DIRDC), Civil Aviation Carriers’ Liability: discussion paper, DIRDC, July 2018.
. DITRDC, ‘Air Carriers' Liability and Insurance’, op.
of Bills Committee, Report,
4, 2020, the Senate, 14 May 2020.
. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 7, 2020, The Senate,
Canberra, 10 June 2020, p. 34.
Memorandum, op. cit., p. 4.
Statement of Compatibility with Human Rights can be found at page 5 of the
Explanatory Memorandum to the Bill.
. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 6, 20
May 2020, p. 21.
. Emphasis added.
. It also does not apply in relation to the death of, or injury
to, a person in circumstances entitling any dependent of the person, or the
person, to pension under the Veterans’ Entitlements Act 1986.
. Ibid. The passenger is an employee within the meaning of the Commonwealth
Employees’ Rehabilitation and Compensation Act 1988 or a person to whom
that Act applies as if he or she were such an employee; a seaman to whom the Seamen’s
Compensation Act 1911 applies and is travelling in the course of their
employment. It does not apply to a person in circumstances entitling any
dependent of the person, or the person, to a pension under the Veterans’
Entitlements Act 1986.
Special Drawing Right (SDR) is a monetary unit of the International Monetary
Fund, which replaced the now obsolete Poincaré gold francs used by the Warsaw
system. Section 9 of the Carriers’ Liability Act provides that an
Australian court must convert all relevant SDR amounts into Australian dollars,
using the exchange rate published by the Reserve Bank of Australia. The value
of the Special Drawing Right is calculated by the International Monetary Fund
on the basis of a weighted basket of four currencies—US dollar, European euro,
Japanese yen and UK pound. The Fund publishes the value of the SDR each day in
terms of US dollars; the latest available rate is crossed with the 4.00 pm
A$/US$ rate. Source: Reserve Bank of Australia (RBA), Exchange
Rates, RBA website.
41A, Carriers’ Liability Act.
Memorandum, op. cit., p. 3.
31 of the Carriers’ Liability Act deals with the limits of liability.
subsection 33(1). Examples of provisions dealing with ‘conditions’ of liability
are section 28 (Liability of the carrier for death or injury); subsections
29(1) (Liability of the carrier in respect of baggage) and 35(2) (Liability in
respect of death); and section 36 (Liability in respect of injury).
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