Montreal Convention liability limits to increase by 13.9%

The International Civil Aviation Organisation (ICAO) has proposed a 13.9% increase to the Montreal Convention’s liability limits following completion of its quinquennial review. The increase is based on the accumulated rate of inflation (weighted by reference to the average Consumer Price Indices of the United States, Japan, China, European Union and the United Kingdom) since 2008, when the last adjustment was made. This means that the current limits of liability will be adjusted as follows:

Montreal Convention 1999

Original Limit (SDR)

Revised limit @ 30 December 2009 (SDR) (current limits)

Revised limit @ 28 December 2019 (SDR)

Injury / death

100,000

113,100

128,821

Delay

4,150

4,694

5,346

Baggage

1,000

1,131

1,288

Cargo

17

19

22

The revised liability limits will take effect from 28 December 2019 unless a majority of the States party to the Convention notify their disapproval to ICAO prior to 30 September 2019.

What does this mean for airlines and their insurers?

This revision means that the levels of compensation for international carriage by air are set to increase in line with inflationary factors.

It seems unlikely that State Parties will object to the increase so airlines may wish to take this time to alert their staff and collaborate with agents and freight forwarders to ensure timely implementation of the revised limits. Where an airline’s contracts with third parties (eg. ground handling agreements) refer to a specified limit of liability, a re-alignment review may be required.