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Perspective

Germanwings Crash Highlights Gaps in Bereavement Compensation

July 13, 2015| By Manfred Tews | General Liability, Property | English

“Nothing will be as it was before,” said a relative of a victim of the Germanwings crash that occurred in March. Those words sum up the situation in which victims of acts of violence and their relatives find themselves. For them, pain and grief are often followed by uncertainty about their financial future.

The amount of compensation largely depends on where the incident happened. A plane crash would be subject to the Montreal Convention of 1999 (Articles 17 and 21) which has been signed by several countries. The advantage for injured parties is that air carriers are strictly liable for up to 113,100 special drawing rights (1 SDR = EUR 1.29063) per passenger. In addition, an air carrier is held entirely liable if it fails to provide evidence that it or its employees didn’t cause the damage. Claimants are relieved from proving the liability of the airline.

The evidence so far seems to show that this will be the case with compensation in the Germanwings crash. Unfortunately, in the negotiations prior to the signing of the Montreal Convention, the parties failed to build a comprehensive compensation standard into the agreement. With the exception of the airline’s obligation to make an advance payment within 15 days, the convention doesn’t contain provisions concerning specific amounts of compensation. These provisions are left up to the national law of each signatory.

And therein lies a problem. The applicable national law on compensation can be the subject of lengthy legal disputes with very different outcomes. For one, the matter can be taken to courts in various countries which – if they declare themselves competent (e.g. as the residence of the injuring party or the claimant) – apply the principles of international private law concerning cases of damage that are pertinent to other countries. With the Germanwings disaster, this can be the law applicable to the contract of carriage, the law of the place where the event that gave rise to the harm that occurred (Germany, as the plane was German) or the law of the place where the harm arose (France). Courts in the U.S. tend to apply the law applicable within their jurisdiction (the lex fori). If the author of damage and the injured party are of the same nationality, being subject to the same laws could be another link. But if the victims are of various nationalities, this can result in varying standards of compensation.

Material damage is almost fully covered under most legal systems. However, in terms of bereavement compensation, there can be considerable differences, depending on the applicable law. The Germanwings disaster could make the issue of compensation for relatives strikingly significant. Under German law, bereavement compensation passed onto relatives is symbolic and mainly based on the duration of suffering experienced by the victim. If the suffering lasts "just" a few minutes, German courts tend to award sums far below EUR 5,000.

Bereavement compensation is an unknown concept under German law. It has been steeped in controversy for years, and its introduction is part of the coalition agreement signed between the two major parties that form the current government. The legislative process has now also been initiated but not concluded. In France, bereavement compensation in cases of death and serious injury can range from EUR 70,000 to EUR 100,000, depending on the degree of relationship. In the U.S., "pain and suffering" can easily reach seven figures. For relatives of the Germanwings crash, it is therefore better to try to avoid being subject to German law.

It is no surprise lawyers have recognized bereavement compensation as a lucrative field for helping injured parties find beneficial settlements and friendlier courts or legal systems – this is known as "forum shopping."

Ultimately, determining whether victims or their families receive reasonable compensation comes down to fate because it largely depends on the laws applicable. The system would be fairer if there were a standard agreed upon by governments and other stakeholders.

 

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