Conflicting Court Decisions on Airline Baggage Loss Claims

Image courtesy of Gregory Szarkiewicz at FreeDigitalPhotos.net

In late 2012, the European Court of Justice released its ruling in the matter of Sanchez v. Iberia Airlines, in which it had been asked to decide whether an airline was liable for loss of baggage to multiple passengers who had packed items in the same bag, or whether compensation was only available to the passenger who had checked the bag.

The Court was called on to interpret Article 22(2) of the Montreal Convention, which is an international convention that governs the liability of air carriers engaged in international carriage. This Article states that in the case of destruction, loss, damage or delay of baggage, an airline’s liability will be limited to 1,131 Special Drawing Rights (approximately $1,750 CAD) “for each passenger unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration of interest in delivery”. The Court concluded that “each passenger” meant each passenger whose items were packed in a bag, and not, as the airline had argued, each passenger who had checked a bag.

In arriving at this interpretation, the Court relied on the definition of “baggage” in Article 17 of the Convention, which consists of “both checked baggage and unchecked baggage”. It appeared to conclude that including “unchecked baggage” in that definition suggests that passengers may claim damages whether or not they checked baggage.

The Court also felt that to deny compensation to passengers who did not check baggage was inconsistent with one of the objectives of the Convention, to ensure protection of the interests of consumers. 

As a result of the decision, the airline was required to pay compensation to each of four family members, including two children, whose items were contained in two suitcases that had been lost.

Interestingly, this interpretation of Article 22(2) is contrary to that arrived at by Canadian courts. For example, in the 2008 decision of Holden v. Ace Aviation, an Ontario court concluded that only the passenger who had checked the bag at issue was eligible for compensation. It found that if “each passenger” were interpreted to include persons who had not actually checked the bag, the second part of Article 22(2) (that liability is limited “unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration…”) would not make sense. Further, the Court felt that this interpretation met the Convention’s objectives of uniformity, consistency, certainty and predictability with respect to the rights and obligations of carriers and passengers. 

This interpretation was adopted by the British Columbia Small Claims Court in the 2012 decision of Khabazian-Isfahani v. WestJet Airlines Ltd., in which a passenger who had packed items in a bag checked by his girlfriend was refused compensation for delay. The Court concluded that to allow a person to step forward after the fact to claim for items said to have been carried in someone else’s luggage would make carriers vulnerable to unanticipated and unpredictable claims.

This conflict in the reasoning between courts is unfortunate, as it goes against one of the overarching goals of treaty interpretation, which is international consistency. It also introduces uncertainty for passengers regarding the availability of compensation for lost or delayed baggage.

Image courtesy of Gregory Szarkiewicz at FreeDigitalPhotos.net