According to a Bloomberg story, Asiana Airlines Inc. is attempting to avoid hundreds of millions of dollars in verdicts and settlements by using a tactic under international law to bar Chinese and South Korean passengers from suing in U.S. courts.
With the possibility of hundreds of claims against the South Korean airline, the carrier will be looking for ways to escape the expense of the July 6 disaster, which killed two 16-year-old Chinese girls and injured 181 other passengers when a 777 jet tried to land at San Francisco International Airport. Asiana will likely that most if not all of the Chinese and South Korean passengers’ ultimate destination was their home countries, since they probably held round-trip tickets, and that’s where they should file their claims. The flight from Seoul had 307 people on board, including 16 crew members. 141 passengers were from China, 77 from South Korea and 61 from the U.S.
Lawsuits over international airline accidents are governed by the Montreal Convention. “The airlines and their insurers will do everything they can to transfer the case to a jurisdiction where their ultimate liability is going to be small,” said Joel Faxon, a New Haven, Connecticut, lawyer who litigated cases tied to the 2009 Colgan Air crash in Buffalo, New York, and those of the Sept. 11, 2001, terrorist attacks. The U.S. has judicial system has caps on damages for wrongful death and injury cases in California. Chinese and South Korean court awards are significantly limited in comparison to U.S. courts. Such a litigation strategy will tremendously impact what the airline might have to pay out in damages. Challenging the jurisdiction of Flight 214 lawsuits will be “the biggest play by the defense and insurance companies.”
All of the lawyers interviewed agreed that Asiana could save hundreds of millions of dollars if such a strategy wins out in court. “It’s too early to discuss those issues,” Asiana spokeswoman Lee Hyo Min said by phone inSeoul today. “At the moment we are putting all our efforts into finding out the cause of the accident.” U.S. investigators are trying to determine why the Asiana pilots didn’t react to a critical loss of airspeed until seven seconds before the plane slammed into a sea wall short of the runway. South Korea is probing which of the two pilots was in control of the plane on approach. One was transitioning from flying the Boeing 737 and had 43 hours’ experience on the 777.
If the Flight 214 investigation shows pilot error was the cause of the disaster, passenger lawsuits will focus on Asiana and the Montreal Convention will apply, Faxon said in a telephone interview. If the probes show manufacturers such as Boeing Co., maker of the doomed aircraft, or engine-maker United Technologies Corp., were at fault, the lawsuits will be product-liability cases and passengers may automatically sue in the U.S.
As it approached the San Francisco airport, a pilot on Flight 214 is heard on the cockpit voice recorder calling for more speed seven seconds before hitting the ground, U.S. National Transportation Safety Board Chairman Deborah Hersman said at a July 7 press conference. The airplane slowed so much that a cockpit warning of an impending stall sounded three seconds later, and the pilots finally tried to abort the landing with just 1 1/2 seconds left before the crash. Crash investigators don’t know why the plane slowed to almost 40 miles an hour below its target speed or why the pilots took no evasive action until seven seconds before impact. There was “no discussion” by the pilots of any aircraft anomalies before the crash, Hersman said.
Individual aircraft are usually insured for about $1.75 billion to cover accident-related payouts. The 1999 Montreal Convention, which replaced the system of liability derived from the Warsaw Convention, covers aviation rights and compensation for international flights. The accord, signed by members of the United Nations’ International Civil Aviation Organization, sets standards ranging from payouts for lost luggage to setting jurisdiction for lawsuits over accidents.
Under the convention, airlines are required to pay damages at a “special drawing rights” rate defined by the International Monetary Fund that currently comes out to more than $100,000 for passengers with proven injuries, Baumeister said. If passengers seek more than that, a carrier can only avoid a larger payout by proving it took all necessary measures to avoid the crash.