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Compensation in aircrafts accidents

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Compensation in aircrafts accidents

In accordance with article 5 of the Treaty on European Union and the Treaty on the Functioning of the European Union (TFEU) – consolidated version-, the use of Union competences is governed by the principles of proportionality and subsidiarity.

Considering that the article 4 of the TFEU provides that transport area is a shared competence between the Member States and the European Union, the action by the Community in the field of air transport should aim, among other things, at ensuring a high level of protection for passengers. Full account should be taken of the requirements of consumer protection in general.

Denied boarding and cancellation or long delay of flights cause serious trouble and inconvenience to passengers. Considering the general aim of the European Union, there exist a community regulation for the different events could ever exist in the case of aircraft accidents.

Rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights

In Spain we apply the Regulation nº 261/2014 of the European Parliament of the Council of 11 February 2014 establishing common rules on compensation and assistance to passengers in the following events:

  • Denied boarding against passenger will
  • Cancellation
  • Delay of flights

There are two different ways to get a flight reservation by the passenger: in the first case, the passenger can buy directly the ticket and make the reservation; and in the second case, the passenger can buy throughout a tour operation. In that second case, we need to take into account the Directive 90/314/EEC on package travel, package holidays and package tours.

In the case of denied boarding, cancellation flight or delay, the air carrier shall offer to the passenger assistance in accordance with the Regulation analyzed, and it shall immediately compensate with economic benefit.

In the case of delay, it will be considered a flight delay when an operating air carrier reasonably expects a flight to be delayed beyond its scheduled time of departure:

  • For two hours or more in the case of flights of 1500 km or less; or
  • For three hours or more in the case of all intra-Community flights of more than 1500 km and of all other flights between 1500 and 3500 km; or
  • For four hours or more

We need to take into account that an air carrier shall not be obliged to pay any compensation if the cancellation or the delay in the flight is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

Economic compensance

Under article 7 of the European Regulation, the air carrier shall pay a compensation to the passengers, in the following terms:

  • For two hours or more in the case of flights of 1500 km or less: EUR 250
  • For three hours or more in the case of all intra-Community flights of more than 1500 km and of all other flights between 1500 and 3500 km: EUR 400
  • For four hours or more or other flights not in the prior circumstances: EUR 600
  • This regulation shall apply without prejudicated to a passenger’s right to other compensation (damages caused by expenses as airport parking, hotel’s booking…).

Rules on compensation in the event of lost bagagge

The Law we applied here is:

  • Montreal Convention of 1999 on essential documents on international Air Carrier Liability
  • Council Regulation (EC) No 2027/97 of 9 October 1997 on air carrier liability in the event of accidents

The Montreal Convention applies to all international carriage of persons, baggage or cargo performed by aircraft for reward.

The passengers shall be given written notice to the effect that where this Convention is applicable it governs and mayo limit the liability of carries in respect of death or injury and for destruction or loss of, or damage to, baggage, and for delay.

Liability of the carrier for death and injury of passangers

The 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.

The compensation under the Montreal Convention is regulated by the “Special Drawing Rights” (SDR).

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. So far SDR 204.2 billion (equivalent to about US$291 billion) have been allocated to members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis.

The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling. His value is updated daily.

During the last review concluded in November 2015, the Board decided that the Chinese renminbi (RMB) met the criteria for inclusion in the SDR basket. Following this decision, the Chinese RMB joined the US dollar, euro, Japanese yen, and British pound sterling in the SDR basket, effective October 1, 2016.

The compensation in case of death or injury of passengers has no limits of liability. For damages not exceeding 113.100 SDR, the carrier shall not be able to exclude or limit its liability (objective liability).

The carrier shall not be liable for damages arising under causes or death or body injured to the extent that they exceed for each passenger 1.000 SDR if they can prove the damage was caused by an action or omission by a third party (or he can prove the damage was not cause by his negligence).

Damage or delay to baggage

The carrier is liable for damage sustained in case of destruction or loss of, or of damage to, checked baggage upon condition only that the event which caused the destruction, loss or damage took place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier.

If the carrier admits the loss of the checked baggage, or if the e checked baggage has not arrived at the expiration of 21 days after the date on which it ought to have arrived, the passenger is entitled to enforce against the carrier the rights which flow from the contract of carriage.

In the case of damage caused by delay, the liability of the carrier for each passenger is limited to 4.150 SDR.

In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1.000 SDR for each passenger unless the passenger has made, at the time, when the checked baggage was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires.

The Regulation 2027/97 of the Council clarifies some insurance requirements for Community air carriers.

The Community air carrier shall without delay, and in any event not later than 15 days after the identity of the natural person entitled to compensation has been established, make such advance payments as may be required to meet immediate economic needs on a basis proportional to the hardship suffered.

An advance payment shall not be less than the equivalent in ecus of 15.000 SDR / passenger in the event of death.

Under the Regulation 785/2004 of 21rt April, on the insurance’s requests for the air carriers, the article 6 obliged the air companies to have an insurance with a minimum coverage of 250.000 SDR per passenger.

Legal precedent in Spain

In Spain we have the famous case of SPANAIR, a flight that caused the death of 154 passengers occurred in August of 2008.

One of the cases we have the Sentence 75/2018 of Audiencia Provincial de Madrid of 29 January 2018 where the Spanish court sentenced a compensation of EUR 148.990,73 for death of two passengers.

Assignment of the claim and class action

We need to attend to the legal framework of each country to see how it has been shaped the right of the claim assignment. In Spain, the Civil Law allows parties to assigned this claim right to a third party, but it need to be settled in an officially recorded instrument.

The articles 1279 and 1280 of the Spanish Civil Law (Código Civil Español) request to include the assignment of the claim in an official deed signed before a Solicitor.

Moreover, the article 20 of Montreal Convention, recognize the legal action to claim to any person could ask for the compensation for death or damage of the passenger.

In Spain passengers have the option to submit an individual claim or a class action (group of passengers) before the Spanish Courts. To determine the jurisdiction, we shall apply the Regulation (EU) nº 1215/2012 of the European Parliament and of The Council, of 12 December 2012, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

Any passenger that suffer any of the events previously cited with a flight in Spain can submit the lawsuit before the Court in the city where the airport is located.
The lawsuit will require a lawyer and prosecutor if the damages are over EUR 2.000. Those claims with amounts of damages under EUR 2.000, there is no need about prosecutor and lawyer.

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