International Agreements and Organizations — Page 42, Lesson 76

Let’s pick this up right where the liability limits get technical. We’re inside the Warsaw Convention, as amended by the Montreal Convention of 1999, and we’re looking at how the carrier’s liability is actually calculated when cargo is damaged, lost, or delayed. Here’s the key rule for cargo. When part of the cargo is destroyed, lost, damaged, or delayed — or when an object contained inside that cargo is affected — the weight used to calculate the carrier’s liability limit is only the total weight of the package or packages directly concerned. So if you have one box that’s damaged, you use that box’s weight, not the whole shipment’s weight. But there’s an important exception. If the damage to one part of the cargo affects the value of other packages that are covered by the same airway bill — or the same receipt, or if no receipt was issued, the same record preserved by the other means referred to in paragraph 2 of Article 4 — then the total weight of those other packages also gets included in the liability limit calculation. In other words, if one damaged package ruins the commercial value of the whole consignment, the carrier’s limit is based on the total weight of all the affected packages, not just the one that was physically damaged. Now, there’s a crucial escape clause for the carrier. The limits in paragraphs 1 and 2 do not apply if it’s proved that the damage resulted from an act or omission of the carrier, its servants, or its agents — done with intent to cause damage, or done recklessly and with knowledge that damage would probably result. That’s the classic “wilful misconduct” standard. And if the act or omission was by a servant or agent, you also have to prove that the servant or agent was acting within the scope of their employment. So the unlimited liability only kicks in when the carrier itself, or someone acting on its behalf within their job duties, acted intentionally or recklessly with knowledge of probable harm. Then we have the court costs provision. The liability limits in Article 21 and in this Article do not prevent the court from awarding, in addition, the whole or part of the court costs and other litigation expenses incurred by the plaintiff — including interest — in accordance with the court’s own law. But there’s a condition. That additional award of costs does not apply if the amount of damages awarded, excluding court costs and other litigation expenses, does not exceed the sum the carrier offered in writing to the plaintiff within six months from the date of the occurrence causing the damage — or before the commencement of the action, if that is later. So if the carrier made a written settlement offer within that window, and the court’s damages award (before costs) doesn’t beat that offer, the plaintiff can’t recover their litigation costs on top. Now we move to passenger death or injury. Under the Warsaw Convention as amended by Montreal 1999, for damages arising under paragraph 1 of Article 17 — that’s the liability for death or bodily injury — the carrier cannot exclude or limit its liability up to 100,000 Special Drawing Rights per passenger. Special Drawing Rights, or SDRs, are the international monetary unit defined by the IMF, and that’s the cap below which the carrier has no defence. But above that threshold, the carrier is not liable for damages exceeding 100,000 SDRs per passenger if the carrier proves certain things. The excerpt cuts off right at that point, but the structure is clear: the first 100,000 SDRs is effectively strict liability — the carrier can’t exclude or limit it. Beyond that, the carrier can escape liability if it can prove the conditions that follow in the next part of the text. So the whole picture here is a tiered system. For cargo, the limit is weight-based, with the package-weight rule and the exception for packages whose value is affected. For passengers, there’s a hard floor of 100,000 SDRs per passenger that the carrier cannot contract out of. And in both cases, wilful misconduct or reckless conduct with knowledge of probable damage blows through the limits entirely. That’s the core of how the amended Warsaw system allocates risk between carrier and claimant.