Introduction

Dispute resolution proceedings involving aviation accidents are far more complicated than general
dispute resolution proceedings because complicated relationships between numerous parties must
be considered. Due to this complex nature, the successful resolution of disputes involving aviation
accidents requires meticulous long-term efforts. Using a recent Air France crash as a guide, this
article will discuss the nature of dispute resolution proceedings in aviation accidents from the
perspective of parties that may be held liable for the accident.
Background of the Air France Crash
On May 31, 2009, Air France flight AF447 was on a scheduled international flight from Galeo
International Airport in Rio de Janeiro, Brazil, to Charles de Gaulle Airport in Paris, France. The
aircraft lost contact with the air traffic control center during the flight. Since June 6, 2009, the
French and Brazilian navies have slowly recovered the bodies of victims and wreckage from the
crash. Authorities have confirmed that 12 crew members and 216 passengers from more than 10
countries, including 9 Chinese citizens, all died in this crash. Shortly after the accident, an
investigation team led by Air France's Accident Investigation Bureau initiated an investigation.
Meanwhile, Air France and its insurer started collecting information about the victims and their
families, making advance payments, and initiating settlement negotiations. By the end of the first
half of 2011, Air France had reached settlement agreements with most families of the victims. As
part of these settlement agreements, families of the victims agreed to waive all rights, actions and
remedies against Air France or any other person or entity that may be held liable for the accident.
The investigation of the Air France crash, body identification and the return of personal
belongings have not yet been completed. In addition, there are still many disputes arising out of
the Air France crash that have not yet been resolved.
As a high-profile and complex international aviation accident, the Air France Crash fully reflects
the complexity of dispute resolution in aviation accidents. For brevity and clarity, this article will
discuss the dispute resolution of aviation accidents from the perspective of parties who may be
held liable for the aviation accident such as the airlines. ("Potentially Liable Parties in Aviation
Accidents").

Legal Risks Faced by Potentially Liable Parties in Aviation Accidents

In summary, Potentially Liable Parties in Aviation Accidents will face two kinds of legal risks: (1)
administrative legal risks, which mainly refer to administrative punishments or orders from
competent authorities; and (2) risks of civil liability, which mainly refer to physical injury or
product liability claims raised by the families of victims against liable subjects, or recovery
actions by airline companies, who have assumed compensation liability in advance, against the
other liable parties of the aviation accident.

As can be seen from the dispute resolution of the Air France crash, government authorities and

airlines act cautiously during the crash investigation. Cautious action means that determinations of
liability and judgments for compensation for the aforementioned administrative and civil lawsuits
are not rushed and not urgent risks to the liable subjects. However, the sluggish pace at which
these proceedings advance is difficult for the families of the victims, who often urgently need
compensation. Therefore, some of the more urgent risks from parties seeking compensation in
aviation accidents are discussed in the following paragraphs:
Families of the victims seek higher compensation through various legal actions because liability
limitation provisions in the relevant laws rarely meet their expectations.
The compensation standard of international air carriers was first set forth in the Warsaw
Convention(1). Under the provisions of the Warsaw Convention, the liability of international
carriers was limited to around 8,300 USD. The Hague Protocol(2) doubled this limit to around
16,600 USD. The 1999 Montreal Convention(3) adopted the use of SDR (Special Drawing Rights)
to compensate victims of international carrier accidents. The SDR is created by the International
Monetary Fund and the convention provides for a limitation on liability in general cases of
100,000 SDR.
The above compensation standards are only applicable to international aviation accidents. In
domestic aviation accidents, compensation standards are mainly provided by local laws and the
limitations on compensation in less-developed countries is usually lower than the standards of the
conventions described above. Consequently, to obtain higher compensation in lawsuits, lawyers
direct families of victims to involve aircraft manufacturers and components suppliers as parties to
the lawsuit between the families and the airlines. For example, in the Air France crash, which is an
international aviation accident, the families of the victims are seeking to take legal action in the
United States by involving American aircraft manufacturers and component suppliers to the
lawsuit. By involving these parties, the plaintiffs may be able to circumvent the lower limited
liability provisions of less-developed countries. Even if the case never goes to trial, the threat of a
higher compensation award in the United States will put the plaintiffs in an advantageous position
in settlement negotiations.

Due to concerns about the statute of limitations, families of victims usually claim rights to or even
file a lawsuit against Potentially Liable Parties in Aviation Accidents as soon as possible instead of
waiting for the results of an investigation into the cause of the accident.

Investigation and identification of the causes of an aviation accident is a complex and timeconsuming process. For example, it has been more than two years since the Air France Crash, but
the final investigation results have not yet come out. However, every country has a statute of
limitations for civil actions. If a claimant files a lawsuit after the expiry of the corresponding
statute of limitations, the defendant is usually entitled to have the lawsuit dismissed. For instance,
Chinese law provides that the statute of limitations for product liability claims is two years. If a
claimant files a product liability claim after the limitation expires, the defendant will be able to
have the action dismissed by the court. As such, families of victims cannot wait for the result of an
investigation before filing suit. Instead, to preserve their right to obtain a judgment, families of
victims usually follow the advice of lawyers and initiate a claim or bring a lawsuit against liable
subjects as quickly as possible.

The participation of professional lawyers in aviation accident disputes advances the civil claim.
Lawyers representing families of victims of international aviation accidents target not only airlines
but also other potential liable subjects such as aircraft manufacturers. Furthermore, to further the
interests of their clients, experienced lawyers find a nexus between the accident and courts located
in several countries and choose the most advantageous jurisdiction in which to bring or threaten to
bring a lawsuit. By choosing the most advantageous jurisdiction, subjects with potential liability
such as aircraft manufacturers are inclined to reach a settlement to avoid higher compensation and
to preserve their reputation, even if the investigation into the accident's cause is still pending.

Notes for Potentially Liable Parties in Aviation Accidents

Due to various legal strategies available to families of victims of aviation accidents, subjects with
potential liability in these accidents should not only carry out their legal obligations, but should
also take notice of the following points during the course of dispute resolution:

Confirm the identity, nationality, income situation and other information of the victims as soon as
possible, and assess potential compensation range based on such information;
Arrange internal information collection as soon as possible, including contracts of sale of the
aircraft or components, documents relating to performance of contract, and correspondence with
any relevant parties after the accident;
Carry out internal investigation on the cause of the accident to figure out the potential liability as
soon as possible. Parties facing potential liability should keep low-key and avoid arousing
suspicion when following the official investigation in order to ensure the neutrality of the
conclusion on the cause of the accident issued by the competent authority and make sure that
important evidence will not be challenged in the relevant legal proceedings;
Verify whether the aircraft at issue is covered by product liability insurance or other insurance
policy, and whether the main component suppliers have purchased the relevant insurance. If there
are relevant insurance policies, the insurance companies should be notified as soon as possible.
When handling the claims, keep in close touch with insurance companies and other liable subjects,
and negotiate on the issue of compensation;
In general it's better to settle with the families of victims as soon as possible. Early settlement is
advantageous as the possible range of compensation may be extended by families through other
legal actions. At the same time, the liable subjects should show compassion and a humanitarian
spirit by actively fulfilling obligations of assistance to the families of victims and completing
remedial measures in a timely manner;
Keep necessary contact with third party authorities (such as the government or the embassy) to
seek better solutions if possible;
Actively manage the relationship with the media and the public, appropriately express concerns
regarding the cause of the accident, aircraft quality and safety issues to reduce negative effects of
the aviation accident on the reputation of the enterprise. Meanwhile, pay attention to external
statements in case of any misunderstanding or exaggeration.
Treat claims letters, litigation documents from other countries and mail from domestic law firms
cautiously. Where the victim's information is unknown, do not randomly sign for receipt of any
international courier packages of unknown origin or couriered documents from domestic law
firms; especially do not respond to any legal documents. The response to these files should be
decided by an experienced team after careful discussion;
Entrust a qualified and reliable local law firm from where the accident occurred. No matter in
which country the final actions take place, the investigation of facts and collection of evidence by
local lawyers is indispensable. Furthermore, a local lawyer has advantages in language and culture
when dealing with the claims of the victims' families;
Prepare for the long-term accident investigation, multinational lawsuits as well as settlement
negotiation.