To represent, lead and serve the airline industry Liability for Acts of Terrorism: The New Unlawful Interference Convention McGill University - Institute of Air & Space Law 31 October 2009 Michael Gill, Senior Legal Counsel – IATA

2 The search for a fair compromise  IATA advocated a purist approach: States, not airlines, are targets of terrorist activity  We sought a reasonable compromise which would provide:  Legal certainty  Compensation for victims  Protection for the airlines and other industry stakeholders

3 The essential feature - the liability cap with knowledge  Airline or its employees acted intentionally or recklessly and with knowledge  Act of employee: airline must prove that an appropriate system for selection and monitoring of staff has been established and implemented  Rebuttable presumption that an airline has not acted recklessly if it proves that a system to ensure compliance with Annex 17 of Chicago Convention in its home State has been established and implemented

4 Does the Convention provide balance?  Strict liability for risk of damage which is not aimed at airlines  Liability cap is weak  Airlines are uncomfortable with exclusive remedy + restrictions on recourse  Overall scheme is unfairly weighted against the airlines

5 Operational challenges of the International Fund  Any additional charge on airline tickets/air waybills presents commercial issues  The airline is responsible for remittance of funds: will it be feasible to pass on contributions to passenger/shippers ?  Airlines must weigh up the cost/benefits of the Convention scheme without knowing the exact level at which contributions will be set

6 Entry into force  35 ratifications  Only 7 signatories so far  750,000,000 departing passengers per year  Some scenarios