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fresh consideration to whether the United States should be a party to the Warsaw Convention.

RATIONALE FOR OPPOSITION

The Montreal Protocols are revisions to the Warsaw Convention. The Protocols would:

(1) Delete the "willful misconduct" provision, thus removing the opportunity for litigation against the airline to determine fault;

(2) Make airlines absolutely liable for damages for personal injury or death, up to a new unbreakable limit of 100,000 Special Drawing Rights (approximately $130,000); and

(3) Provide that each participating nation has the right to establish a Supplemental Compensation Plan to operate within its territory, within certain guidelines.

The Montreal Pr tocols jeopardize the consumer rights of all American passengers on international airlines. Our strong opposition to ratification of the Montreal Protocols is based on two principles. First, we are fundamentally opposed to a system of limited liability for airlines, and thus we cannot support changes to the Warsaw Convention that preserve the existing structure. The increase in the per passenger liability limit (to approximately $130,000) proposed by the Protocols merely tinkers with an outdated system. Modern airlines have adequate resources and insurance to cover their risks-they don't need or deserve liability limits.

Second, the Protocols would eliminate the one category of conduct not subject to limitation under the Warsaw Convention-the "willful misconduct" exception, which allows a plaintiff who proves such conduct by the airline to recover unlimited damages. The Protocols would make the per passenger liability limit of $130,000 nonbreachable. This is an unconscionable intrusion by government into the rights of all passengers and families of passengers who are victims of airline misconduct. Moreover, standards like the "willful misconduct" exception provide an important safety incentive for airlines.

If the United States Senate ratifies the Montreal Protocols, we will be telling every single American who gets on an international airline:

"Don't worry about potential negligence by the airline. Don't worry about your survivors having to look into what caused this airline to crash (because we in the Senate voted to do away with fault-based litigation). Just buy this flight insurance, and everything is going to be all right."

Deletion of the "willful misconduct" provision of the Warsaw Convention would remove any opportunity for litigation based on fault. There would be no more plaintiffs' lawyers poking around in PanAm's business, no more private citizens pursuing questions about negligence.

And what would American citizens get in return for giving up their ability to sue the airline? They would get to buy flight insurance. They would have to buy flight insurance. What would the airlines get from ratification of the Montreal Protocols? Unbreachable liability limits.

This is patently unfair.

SUPPLEMENTAL COMPENSATION PLAN

With regard to the Supplemental Compensation Plan, which is the only aspect of the Protocols that has changed since the Senate's deliberation in 1983, we object to it because it is a system of mandatory insurance.

Such a system would be unprecedented. As was written recently in the New York Law Journal, "it would be tantamount to a product liability system under which manufacturers liability was limited and consumers would be required to buy first party insurance to pay for any losses above the manufacturer's limit."

This mandatory insurance proposal, coupled with the elimination of the "willful misconduct" exception to liability limits, amounts to a tradeoff that is patently unfair to passengers: limited liability in all cases for the airlines, a new mandatory insurance program for all passengers. In other words, beyond the liability limit under the Protocols, passengers would finance their own damage rewards, even in cases where the airline was deliberately negligent.

We understand that the Supplemental Compensation Plan has been changed. In 1983, the Administration's proposed Supplemental Compensation Plan for U.S. citizens would have provided only up to $200,000 of additional coverage per passenger, to be financed by a $2 per passenger charge. This year, the airlines and the Bush Administration have submitted a revised plan that provides for the recovery of provable economic and noneconomic damages. The new plan is meant to satisfy Senate objections to the Protocols.

We are not surprised that the Administration and airlines were willing to make this change: the Protocols require the cost of the plan to be paid by the passengers, not the airline. The plan provides for insurance benefits, not "recoveries of damages."

The per passenger surcharge is now expected to be $5. But this price is not fixed. Rather, the plan states that it "may be revised from time to time, upward or downward, through *** negotiations with the contractor "Therefore, depending on loss experience, the surcharge could be much higher. No one can say what it is going to cost.

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LEGAL AUTHORITY FOR THE SUPPLEMENTAL COMPENSATION PLAN

When the Hague Protocols (the first major effort to amend the Warsaw Convention) were submitted to the Senate in the 1960's, a similar system of automatic compulsory trip insurance was submitted in separate implementing legislation. In 1965, the Foreign Relations Committee voted to recommend ratification of the Hague Protocols, but on the condition that separate insurance legislation be enacted within a reasonable time. The legislation aid not move in the Congress; thus the Hague Protocols were brought down.

We question whether the plan as currently devised would have sufficient statutory authority. The proponents of the Montreal Protocols have tried to construct the plan as an agreement among airlines that is subject to the approval of the Department of Transportation. But the imposition of the Supplemental Compensation Plan would apparently require an Act of Congress, because one, it man

dates the purchase of insurance by passengers; and two, it creates jurisdiction in Federal courts.

DENOUNCE THE WARSAW CONVENTION

Rather than ratify the Montreal Protocols, we believe that the United States should denounce the Warsaw Convention. In our opinion, the U.S. Government will denounce Warsaw if the Senate rejects the Protocols once and for all.

There is no justification for limited liability of airlines in this day and age. If the U.S. were to denounce the Convention we would eliminate its restrictions on damages and venue. American travelers would be better off under a system of unlimited liability.

In the absence of the Warsaw Convention, virtually every defendant airline in the world could be served in U.S. court, and in the vast majority of cases involving U.S. citizens, U.S. law would apply. Much has been made by the proponents of the Protocols of the hypothetical American citizen traveling between two foreign points whose survivors after an accident could not sue in U.S. court. How often would that be the case? 'Rarely. How often would it not be the case? Most of the time. Should this example drive U.S. policy? Instead of denouncing the Warsaw Convention, should we thus ratify the Protocols, do away with fault-based litigation and restrict airline liability for the vast, vast majority of Americans?

The Warsaw Convention is restrictive compared to our domestic liability system. The expert witnesses called to testify before the Foreign Relations Committee were in agreement that compensation in domestic aviation accidents is greater and faster than in cases under the Warsaw Convention this is due to the treaty's liability limits and to the arduous necessity of proving "willful misconduct.

Without the Warsaw Convention, we would have essentially the same system we now have domestically for almost all Americans traveling abroad. Under a system of simple negligence and unlimited liability, rather than the arduous necessity of proving "willful misconduct" as required by the Convention, the amount of compensation paid to victims would substantially increase, as would the timeliness of restitution.

It does not follow, therefore, that ratifying the Protocols because of the supposed benefits of the Supplemental Compensation Plan is a superior course of action to denouncing the Warsaw Convention. The unprecedented supplemental insurance plan could theoretically be implemented under either scenario.

CONCLUSION

In sum, the Montreal Protocols would cement in place a 'defective system and worsen it by eliminating any opportunity for faultbased litigation. The Supplemental Compensation Plan would be an unprecedented passenger-financed insurance scheme, which could be imposed either in conjunction with the Protocols or separate and apart, which serves only as window dressing for an outdated and unfair Warsaw Convention.

We don't deny that flight insurance is a good idea. In fact, it may be a good idea to make flight insurance more readily available to

every American. That may be a great idea. We simply question why the provision of mandatory insurance must be tied to losing the ability to sue an airline? We should reject the Protocols, denounce the Warsaw Convention, and have flight insurance anyway. That way passengers would have both-insurance benefits and fault-based litigation.

To say that the Supplemental Compensation Plan makes the Montreal Protocols a good deal for American passengers is simply wrong. To solve the current problem, the Senate should go to the root of it and denounce the Warsaw Convention.

Finally, we call attention to a resolution of the Board of Directors of the group the "Victims of Pan Am 103," the largest of the groups of Lockerbie families, which was passed unanimously on June 19, 1990. It reads:

"Now therefore be it resolved that the VICTIMS OF PAN AM FLIGHT 103 vigorously oppose United States Senate ratification of the Montreal Protocols and express strong support for denunciation of the underlying Warsaw Convention."

We voted not to report the Montreal Protocols. We will pursue our objections if and when the Protocols are taken up by the full Senate for consideration.

APPENDIX I

(Excerpt from the Report of the United States Delegation to the 1975 Montreal Conference)

THE PROVISIONS OF THE REVISED WARSAW CONVENTION APPLICABLE TO THE UNITED STATES IN THE EVENT OF RATIFICATION OF MONTREAL PROTOCOLS 3 AND 4 AND TERMINATION OF THE 1929 VERSION OF THE CONVENTION

Explanatory Note

If the Senate gives its advice and consent to ratification of Montreal Protocols 3 and 4, the intended procedure would be to wait approximately 3 months before depositing instruments of ratification. At the time of deposit, the United States would also denounce the Warsaw Convention in accordance with Article 39 thereof, and make the declarations referred to in Article XI, paragraph 1(c) of Protocol 3 and in Article XXI, paragraph 1(b) of Protocol 4. The effect of the denunciation and declarations would be that only the most modern versions of the provisions of the Warsaw Convention and its Protocols would be applicable to the United States. Denunciation of the Warsaw Convention takes effect six months after notification. The purpose of waiting 3 months before ratifying Protocols 3 and 4 would be to inform other Contracting Parties of the steps the United States intends to take and to permit them a total of approximately 9 months to complete their internal procedures if they wish to be party with the United States to a single set of the modern rules.

The substantive provisions of the revised Warsaw Convention applicable to the United States upon completion of the steps described in the Explanatory Note follow below.1

Article 1

CHAPTER I. SCOPE-DEFINITIONS

1. This Convention shall apply to all international transportation of persons, baggage or goods performed by aircraft for hire. It shall apply equally to gratuitous transportation by aircraft performed by an air transportation enterprise. (W-Art. 1)

1 Material in brackets [] has been added for editorial purposes in a few places to assist in understanding the text. Lined-through language (the) would not be applicable to the United States but is found in articles containing provisions that would be applicable to the United States. Margin notes give the source of the provision (W=Warsaw Convention: H Hague Protocol; G Guatemala City Protocol; M3 Montreal Protocol 3; M4-Montreal Protocol 4).

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