The Montreal Convention (formally, the Convention for the Unification of Certain Rules for International Carriage by Air) is a multilateral treaty adopted by a diplomatic meeting of ICAO member states in 1999. It amended important provisions of the Warsaw Convention's regime concerning compensation for the victims of air disasters. The Convention attempts to re-establish uniformity and predictability of rules relating to the international carriage of passengers, baggage and cargo. Whilst maintaining the core provisions which have served the international air transport community for several decades (i.e., the Warsaw regime), the treaty achieves modernization in a number of key areas. It protects passengers by introducing a two-tier liability system that eliminates the previous requirement of proving willful neglect by the air carrier to obtain more than US$75,000 in damages, which should eliminate or reduce protracted litigation.
Damages
Under the Montreal Convention, air carriers are strictly liable for proven damages up to 128,821.00 special drawing rights (SDR), a mix of currency values established by the International Monetary Fund (IMF) equal to roughly US$175,000. Where damages of more than 128,821.00 SDR are sought, the airline may avoid liability by proving that the accident which caused the injury or death was not due to their negligence or was attributable solely to the negligence of a third party. This defense is not available where damages of less than 128,821.00 SDR are sought. The Convention also amended the jurisdictional provisions of Warsaw and now allows the victim or their families to sue foreign carriers where they maintain their principal residence, and requires all air carriers to carry liability insurance.
The main goal of the Montreal Convention was to increase available damages in relation to death or injury of passengers from the limited and outdated limits under the Warsaw/Hague Convention.
No compensation purely for psychiatric injury
The Convention does not recognize compensation for psychiatric injury or damage unless linked to physical injury. Article 17 of the Convention refers to "bodily injury" in setting out the liability of the carrier for accidents. Purely psychiatric injury is not eligible for compensation which has been criticised by people injured in plane accidents, legal experts and their families.
Australia
Australia amended its law to adopt concepts in the Montreal Convention including:
the removal of references to ‘personal injury’ and replaced with ‘bodily injury’ under the CACL Act to ensure consistency with the 1999 Montreal Convention concerning international flights; the preclusion of potential claimants from claiming compensation for mental injuries where that person has not suffered additional personal or property damage
Independent Australian senator Nick Xenophon will introduce a private member's bill into the Australian Parliament in May 2015 which will seek to protect the rights of plane crash survivors to be compensated for psychological trauma.
Leading Australian current affairs TV show 4 Corners on the government owned broadcaster ABC, broadcast a program focusing on the unfairness and injustice of excluding psychiatric injury on March 23, 2015 featuring Karen Casey, a nurse injured when the medical evacuation flight she was nursing on crashed in the waters off Norfolk Island.
Lost baggage
The Montreal Convention changes and generally increases the maximum liability of airlines for lost baggage to a fixed amount 1,288 SDR per passenger (the amount in the Warsaw Convention is based on weight of the baggage). It requires airlines to fully compensate travelers the cost of replacement items purchased until the baggage is delivered, to a maximum of 1,288 SDR. At 21 days any delayed baggage is considered lost, until the airline finds and delivers it.