The Case for Missing Bags

It has not been a great year for passenger’s baggage getting damaged, delayed or lost.  Part of the reason for disruption to the carriage of baggage must relate to the increased security precautions at UK airports.  Delayed baggage is an expensive problem for airlines too.  The cost of forwarding delayed baggage to passengers around the world is a costly process.  In addition to the disruption caused, airlines stand to lose the goodwill of their important business class travellers where lost and delayed baggage is not managed properly to the traveller’s satisfaction. 

The present legal regime relating to baggage is under the Montreal Convention 1999, subsequently introduced into English law.  This replaces the earlier Warsaw Convention which allowed airlines to rely on a maximum liability of a maximum amount per kilo of checked baggage.  The Montreal Convention allows airlines to cap liability for lost, damaged or delayed baggage to 1000 Special Drawing Rights for each passenger (unless the passenger has made a Special Declaration at Check-In that the baggage has a higher value).  The current maximum of 1000 SDR’s amounts to £770.00.  Passengers are therefore entitled to recover expenditure incurred up to this maximum.  They are not entitled to recover general contractual damages, or indirect losses such as damages for distress or inconvenience.  The maximum figure can only be challenged where it is proved that the damage and loss arising from the delayed or lost baggage was caused by the airline either intentionally or recklessly.  Case law shows that this is extremely hard for a passenger to establish, and that the mere loss or delay to the baggage is not in itself a reckless act. 

In early September 2007, Donald Smith, an accountant based in Tacoma, USA and two others commenced a class action complaint against British Airways.  The action has started in the District Court in Seatle, and alleges that the airline was reckless in the way it generally managed passenger’s baggage and with “foreseeable knowledge the damage, delay and loss of passenger baggage would continue unabated”.  The purpose of the action is to invite the court to establish a group action enabling other passengers to join the class, namely passengers with delayed or lost baggage on this particular airline.  The action specifically seeks to remove the 1000 SDR limitation by alleging recklessness under Article 22 (5) of the Convention.  Due to the relatively low value of baggage claims, and the nature of air law, this is believed to be the first class action relating solely to baggage

Airlines will understandably be concerned by this development.  Delays to checked baggage are not uncommon and often arises through no fault of the carriers, or lies in the hands of other service providers and airport facilities, over which they have no real control.  The present opinion is that recklessness is unlikely to be proved in this particular case.  However, US courts are notoriously consumer friendly and the outcome is therefore unpredictable. 


COMPETITION COMMISSION REPORT ON AIRPORT CHARGES

The Competition Commission has reported into future passenger charges that BAA levy on airlines, but for amounts that fall short of BAA’s expectations.  The Competition Commission propose that BAA increases charges by 18%, but BAA were hoping for a much larger increase and are threatening to scale back the extent of their investment at its London airports.  This is in the context of increasing criticism of the state of particularly London Heathrow, where in addition to the new Terminal 5, Terminals 1 and 2 were planned to be rebuilt.  In addition to its recommendations on these charges, the Competition Commission found that the airports had acted against the public interest, in failing to manage security, queuing and queue times to avoid unacceptable delays to passengers, crew and flights, and has recommended that this might be resolved by strengthening service quality regulations. 

This is also in the context of general concern that the way airport ownership is currently structured may not be fair and competitive. 

At the end of the day, increased charges will of course be passed onto passengers, and unexpected delays to building and infrastructure changes can only make the experience of London’s airports more uncomfortable for business travellers.


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The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. Piper Smith Watton cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.