Airblue Crash: Compensation Question

By Amir Zia
The News On Sunday

August 15, 2010

As the state authorities, insurance agents and airlines officials struggle and haggle to determine the compensation, victims' families have nothing but days of agonizing wait ahead of them.

Many things which should have been straight and easy appear too difficult and complicated in Pakistan — even collecting insurance claims of victims of an air-crash by their families. More than two weeks after an Airbus 321 of Airblue crashed into Margalla Hills, the compensation claims of its 152 victims, including six crew members, remain a knotty problem. How much compensation will be paid per victim? When the family members of these victims get this money? These are the two important questions, which neither the government nor the Airblue authorities are ready to clarify — at least for the time being.
"It is a very complicated and sensitive issue, involving different laws," Air Blue’s General Manager Raheel Ahmed told TNS. "I am afraid right now nobody can give the exact amount of compensation or the date when its distribution will start."
Airblue got the Airbus on operating lease from the International Lease Finance Corporation, which provided an insurance cover of $35 million on its aircraft.
As the state authorities, insurance agents and airlines officials struggle and haggle to determine the compensation, victims’ families have nothing else but days of agonizing wait ahead of them. While many victims belonged to well-to-do families, others were the sole bread earners and their family members remain in the need of an immediate financial assistance.
Legal experts say that Pakistan’s laws regarding the payment of compensation to families of air crash victims were contradictory, allowing different interpretations.
Yahya Adeel, a top lawyer of international and local aviation law, said that at least three different sets of laws exist which apply to the air crash victims. "These laws not just overlap, but contradict one another."
Airblue’s management also says that compensation needs to be decided keeping in view the law of the land, the local civil aviation law as well as the international law. "It is indeed a touchy subject. But on our part, there will be every effort to maximise the insurance," Airblue’s Ahmed said. The national Carriage by Air Act, introduced in 1934 in British India in line with the 1929 Warsaw Convention and adopted by Pakistan after independence, calls for 125,000 Francs payment per victim. The Hague protocol of 1955 doubled the amount to 250,000 Francs, which does not include what airlines’ has to pay for the lost baggage. Adeel said that this protocol was inserted into the Pakistani law, which fixed it as the minimum compensation regardless of the cause of the accident.
This compensation needs to be given immediately. However, experts say that this minimum payment would not override any court verdict regarding an increase in this amount. The law also allows victims’ families to demand higher compensation if the accident is the result of human or technical error.
Pakistan is also a signatory to the 1999 Montreal Convention, which says each family of a victim to get 100,000 (SDRs) special drawing rights in damages. Some experts say that this applies only on international flights, but the local law does not discriminate on this basis. Provisions of Montreal Convention have been incorporated in the Carriage by Air Act 2010, which now needs a seal of approval from the Parliament.
However, the complication in these laws stems from a controversial amendment introduced in the past which says that for domestic flights, the Ministry of Defense can notify and reduce the compensation. Another government SRO fixes the amount of compensation at 500,000 rupees for domestic passengers.
Experts see it in violation of the fundamental rights guaranteed in the constitution, which sees all citizens as equal, while the international aviation laws also do not discriminate between international and domestic flight passengers. But while the aviation laws remain subject to debate, Airblue’s management has hinted that along with the law, insurers would also take into account the precedence, by which they mean that the compensation paid in the past to families of an air crash victims. Airblue mentions on the jacket of its ticket that domestic passengers are covered to the tune of one million rupees.
The 2006 crash of Pakistan International Airlines (PIA) Fokker in Multan is taken as a prime example in which a compensation of two million rupees was paid per victim.
Junaid Ameen, Director General of the Civil Aviation Authority, said payment of compensation remains the responsibility of airlines through its insurance agents. The amount of compensation varies from country to country and an exact number cannot be given now, he said.
The international conventions, to which Pakistan is a signatory, only provides guidelines and are not mandatory, Ameen said. "There are many intricacies involved in determining the compensation and insurers can take several more weeks before starting the actual distribution of money."
But apart from fixing the compensation amount, another challenge the Airblue faces is that of registering and verifying the next-of-kin of each victim. Ahmed of Airblue said that already more than 200 people got themselves registered as the next-of-kin of 152 passengers, while some bodies still remain unidentified. "In some cases there are disputes over who is the actual heir. We have a case where a man had two wives, then there is another in which wife and father of a victim filed separate claims. There are many such disputed cases." While the Airblue has almost completed the registration process, the real challenge of verifying the relatives still needs to be resolved and could take time, he said.
Given the slow pace at which the Airblue, its insurance companies and the government are moving on the issue of compensation, it seems a long wait for the family members of the victims, who only have questions and not many answers about the future. The laws and the system, instead of helping these families, seem to be used to delay and deny them a fair compensation in line with the international air travel conventions and laws.