or damage to property carried by aircraft for hire and to gratuitous carriage by “an air transportation enterprise” (art. 1). Liability is imposed upon the “air carrier" (arts. 17 and 18). The convention does not contain a definition of the term "air carrier." It has been suggested that such a definition should be included. (See George R. Sullivan, Codification of Air Carrier Liability by International Convention, 7 Journal of Air Law, 1, 14.) The convention provides for absolute liability for injury or death of passengers in the amount of actual injury with a maximum limit of about $8,300 (arts. 17 and 22). The carrier and passenger may by special contract agree to a higher limit of liability (art. 22). The carrier can free itself of liability if it proves that it and its agents have taken all necessary measures to avoid the damage or that it was impossible for them to take such measures (art. 20). The passenger may recover unlimited damages if he proves the accident occurred through the willful misconduct of the carrier (art. 25). Contributory negligence is a partial or complete defense, depending on the law of the forum (art. 21). With regard to baggage and goods, the carrier is freed from liability if it can show no negligence or if the damage or loss was caused by errors in piloting, navigation, or handling the aircraft (art. 20). Maximum liability for baggage and goods is limited to about $8 a pound unless the consignor made a declaration of a higher value “and has paid a supplementary sum if the case so requires" (art. 22). Insurance is not required. For the full text of the convention, see Stephen Latchford and Joseph Fennell, The International Conventions on Private Aerial Law (8 Journal of Air Law 299).

The United States has not adopted any convention regarding ground injury or damage. Its delegates, in 1933, signed the Rome Convention, which is discussed infra, but the Senate has never ratified it. In fact, the Rome Convention has never come into effect anywhere because it has been ratified by only three nations, and ratification by five nations is necessary to bring it into operation. See infra. Nor has the United States adopted any convention covering collisions in international flying. The Fourth International Conference on Private Aerial Law, which met in Brussels in September of this year, had upon its agenda the consideration of a proposed convention covering collisions, but we are informed that the matter was referred back to C. I. T. E. J. A. for further drafting, and that a feeling was prevalent at the conference that the convention was premature.. We are further informed that the American delegation took a leading part in opposing the proposed measure.

Foreign law.

With regard to aviation liability law outside the United States, the Warsaw Convention of 1929 has been very widely adopted for international flying. It is the law almost throughout Europe, with the exception of Portugal. Many British colonies and protectorates all over the world have passed it. In the Western Hemisphere Mexico, Brazil, and the United States have adopted it. Altogether,

it seems in a fair way to become the universal rule for international flying. We have been informed by Dr. D. Goedhuis, manager of the central office of the International Air Traffic Association at The Hague, that Italy, Holland, Norway, Sweden, Denmark, and Finland have applied the principles of the Warsaw Convention to domestic flying.

It should be noted that the Third International Conference on Private Aerial Law recommended that the high contracting parties place their internal law in harmony with the provisions adopted in the international conferences.

In Great Britain the Carriage by Air Act, 1932 (ch. 36), adopted the Warsaw Convention rules for international flying. Section 4 of the act gave power by order in council to apply the rules of the convention to internal carriage in the United Kingdom and all or any of the British territories, protectorates, or mandates. (See N. H. Moller, The Law of Civil Aviation, p. 260.)

Until this power is exercised, the question of liability for passengers and goods carried is a matter to be determined by the rules of the common law. In England a common carrier is under a duty to exercise reasonable care toward its passengers (Moller, Law of Civil Aviation, pp. 238 and 271). This standard seems less stringent than the duty to use the highest degree of practicable care which the American courts generally apply. Moreover, with regard to passengers, the carrier can completely divest itself of liability for negligence by contract (Haigh v. Royal Mail Steam Packet Co., Ltd. (1883) 52 L. J. Q. B. 395). It is not so clear

For a list of the countries which have adopted the Warsaw Convention for international flying see Stephen Latchford and Joseph H. Fennell, The International Conventions on Private Aerial Law (8 Journal of Air Law 298).

whether in the absence of statute this right exists with regard to goods carried. (See Moller, Law of Civil Aviation, pp. 268, 269, 273, and 274.) As to railroads, the matter was made clear by the Railway Act of 1854, which provides for two rate structures: One at a low rate at the owner's risk, and the other at a high rate at the carrier's risk. Mr. Arnold W. Knauth, in an article entitled "Compulsory Aviation Liability Insurance in Great Britain and the United States" (8 Journal of Air Law 461), indicates that British air carriers have been and are.today able to contract themselves out of liability both as to passengers and goods. Thus, the law of Great Britain is considerably less strict than the common law of the United States regarding this type of liability.

8

As to ground injuries and damage, there is the Rome convention of 1933, which was intended to cover international flying." This convention has been adopted by only three countries, however, Spain, Rumania, and Belgium. Consequently, it is not in operation anyhere because the convention provides that it shall not become effective until five countries have adopted it (art. 24). It provides for absolute liability for injury to persons or damage to property upon the surface caused by an aircraft in flight or anybody falling therefrom (art. 2). Surface presumably covers both land and water. (See Moller, Law of Civil Aviation, p. 215.) Contributory negligence of the person suffering injury or property damage bars or diminishes the recovery, depending upon the law of the place of injury (Id., p. 216 and art. 3). The person primarily liable is the operator of the aircraft (art. 4 (1)). He is defined as any person who has the right of disposal of and uses the aircraft on his own account (art. 4 (2)). A person using the aircraft without the consent of the operator is made liable and, if the operator has not taken proper precautions against the unlawful use of his plane, he is made jointly liable (art. 5). Where the damage occurs through the collision of two or more airplanes, the operators are jointly and severally liable to the injured persons (art. 6). The maximum liability per accident is not to exceed 250 francs per kilogram of weight of the aircraft, or in the neighborhood of $8 a pound. The maximum liability shall in no case be greater than 2,000,000 francs (about $133,000) nor less than 600,000 francs (about $40,000), one-third to be assigned to property damage and two-thirds to personal injuries or death, compensation for 1 person injured not to exceed 200,000 francs (about $13,300) (art. 8). The limitation of liability cannot be availed of if the damage was caused by the gross negligence or willful misconduct of the operator or his agents unless the damage was due to an error in piloting, operation, or navigation, or the operator had taken all proper measures to avoid the damage. Also, the operator cannot limit his liability unless he takes out insurance, deposits cash, or puts up a bond (arts. 12 and 14). The convention applies whenever damage is caused by an aircraft of one contracting party upon the territory of another contracting party.

In Great Britain the Air Navigation Act, 1920 (ch. 100), section 9, provided for absolute liability for surface damage. The only exception was where the damage was caused by or contributed to by the negligence of the person injured or whose property was damaged. The owner of the aircraft was expressly given a right over against third parties for negligence. The wording of this act was somewhat amended by the Air Navigation Act, 1936 (ch. 44), but the principle of absolute liability was retained. Ordinarily the owner is liable, but where the aircraft has been leased for a period exceeding 14 days the responsibility is placed upon the lessee (Air Navigation Act, 1920, sec. 9 (2)). The 1920 act did not limit liability or provide for compulsory insurance. The 1936 act does both these things. It is provided, however, that the insurance and limited liability provisions shall not come into effect until the Secretary of State so orders (sec. 22). Although 2 years have now elapsed since the act was passed, we are informed that the Secretary of State has not seen fit to bring these provisions into effect. Insurance, therefore, is not at present required in the United Kingdom. The limitations of liability, which have not been made effective, are contained in the second schedule to the 1936 act. Moller, in The Law of Civil Aviation, summarizes them as follows:

"In regard

"(a) to airships the limit is £25,000;

"(b) to balloons, whether fixed or free, the limit is £5,000;

"(c) to gliders the limit is £2,000 (so, however, that not more than £1,000 is to be payable in respect of loss of, or damage to, property);

For the full text of the convention see Stephen Latchford and Joseph H. Fennell, The International Conventions on Private Aerial Law (8 Journal of Air Law 298, 312). 8 Id.

"(d) to other aircraft

"(i) if the weight of the aircraft fully loaded does not exceed 5,000 pounds avoirdupois, the limit is £10,000, so, however, that not more than £5,000 is to be payable in respect of loss of, or damage to, property;

"(ii) if the weight of the aircraft fully loaded exceeds 5,000 pounds, but does not exceed 10,000 pounds avoirdupois, the limit is £10,000, so, however, that in respect of loss of, or damage to, property there is not to be payable more than £1 for each pound of the weight of the aircraft fully loaded;

"(iii) if the weight of the aircraft fully loaded exceeds 10,000 pounds but does not exceed 25,000 pounds avoirdupois, the limit is £1 for each pound of the aircraft fully loaded; and

"(iv) if the weight of the aircraft fully loaded exceeds 25,000 pounds avoirdupois, the limit is £25,000” (p. 205).

A procedure is provided whereby the person liable can apply to a court to assess the damages, using its discretion to bring in parties, stay the action, etc. The insurance provision, which has not been made effective, provides that unless a person carries the required insurance he is not entitled to the limits of liability provided for in the act (sec. 16 (1)). Insurance can be either in the form of a policy or a bond (sec. 16 (1)). The insurance need cover only damage or injury to persons or property in the United Kingdom.

Absolute liability is the basis of the laws of most of the nations of continental Europe regarding ground damage to persons and property." (See Robert Kingsley and Sam E. Gates, Liability to Persons and Property on the Ground, 4 Journal of Air Law 515, 517.)

V. COMPARISON OF PRESENT TRANSPORTATION LIABILITY LAW WITH THE PROPOSED ACT

1. Injury or death to passengers.

A common carrier in the United States is under a duty to use the highest degree of care toward its passengers. The carrier, however, is not an insurer of the passenger's safety. This rule applies to railroads, motor carriers, and ships. It has also been applied to aircraft. The carrier cannot ordinarily contract itself out of liability for negligence although railroads can exempt themselves from liability to persons traveling upon passes. The common law regarding limitation of liability to a certain amount is, in the case of railroads and aircraft, unsettled. Statutes forbid it in some States. A shipowner is forbidden by statute to limit liability to passengers to a certain amount, but his total liability for all claims can never be greater than his interest in the ship. Statutes in a number of States limit the amount of liability in wrongful death actions.

The proposed act imposes upon aircraft carrying passengers for compensation a higher liability than that of any other type of carrier in the United States. It is true that it ostensibly limits liability. However, the effectiveness of the limitation of liability will be largely dependent upon the extraterritorial effect given to the article III of the act. This will depend upon difficult questions of the conflict of laws and the full faith and credit clause. See discussion in section VII, subsection 2, infra. Since air lines are subject to suit in a number of jurisdictions, it may well be that a plaintiff will frequently be able to sue in a jurisdiction which will not give extraterritorial effect to the limit of liability in the act, Furthermore, shipowners too have a type of limited liability although they are not absolutely liable. Moreover, the Warsaw Convention, which has been so widely adopted, limits liability to an even lower figure for death claims than does the proposed act although it does not make the air carrier absolutely liable.

2. Injury or death to guests in aircraft not carrying passengers for compensation. The common-law rule as to guests in automobiles is that the operator is under a duty to use reasonable or ordinary care. A number of State statutes lower this standard to one of gross negligence. Such statutes do not apply to guests in aircraft. The proposed act would make these statutes apply to aircraft and thus lower the present standard of liability.

3. Loss or damage to baggage and goods carried.

The ordinary rule regarding goods and baggage carried by a common carrier is that the carrier is liable as an insurer, with certain exceptions, such as an act

Bulgaria, Finland, Sweden, Switzerland, Hungary, Germany, Austria, Italy, Danzig, Czechoslovakia, Belgium, France, Denmark, Norway, and Russia.

of God or the public enemy, inherent nature of the goods, etc. Shipowners are further not liable for errors in handling or navigating the vessel. Shipowners can limit the amount of their liability by contract, and, in many instances, railroads can too. The proposed act imposes absolute liability without any exceptions-a higher standard than that of any other form of transportation in this country. Although liability can be limited to a declared value, the privilege in this regard is not substantially different from that enjoyed by other types of carriers.

4. Injury or death to persons and damage to property on the ground.

Railroads are under a duty to use ordinary or reasonable care regarding persons properly on the tracks. They are under a duty to use due care toward a trespasser only if his presence is known. Automobilists are under a duty to use ordinary care with regard to persons upon the street. The proposed act makes all aircraft operators absolutely liable in a limited amount for damage to property or injury to persons upon the ground. While this is much stricter than the liability of railroads or automobiles for injuries to persons or property outside the train or automobile, the justification is said to lie in the helplessness of the landowner to prevent airplanes crashing upon his land. A number of States have taken this view and by statute impose absolute liability without limit for such injuries. The same result has been reached at common law on the theory of trespass. A few State statutes set up a negligence standard, and one or two cases have gone on a negligence theory. The Rome Convention and the Air Navigation Act, 1936, in Great Britain provide for absolute limited liability as does the proposed act. This phase of the proposed act, therefore, is less of a departure from existing law regarding aircraft than are the passenger provisions. It should be noted that the effect of the limitation on liability in the proposed act is rendered largely nugatory because the plaintiff has an option to sue for negligence and recover in an unlimited amount. As a practical matter, this means that the limitation of liability will apply only where there would be some difficulty in proving negligence.

5. Collisions.

As to collisions under the proposed act, although operators of planes are liable absolutely for injuries to persons or property on the ground and for injuries to their own passengers, the standard as between operators of planes involved in the accident is one of negligence, just as it is at common law. Where two or more operators are negligent, the liability is distributed on a comparative negligence basis. This differs from the present common-law rule that contributory negligence is a defense. It is more closely akin to the admiralty rule of sharing liability equally where more than one ship is negligent. There is no international convention regarding collisions.

6. Compulsory insurance.

The proposed act provides that all aircraft must carry compulsory insurance against liability for ground injuries. Aircraft carrying passengers for compensation must insure against liability for injury to them. In the railroad field there seems to be no compulsory insurance. Massachusetts has compulsory motor-vehicle liability insurance for personal injuries or death to anyone except guests, and a number of other States require insurance for motor carriers. Some of the statutes do not cover passenger and cargo insurance. There is some question whether a State can constitutionally require such insurance as to interstate commerce. A number of States have so-called financial responsibility laws which provide that the license of a driver who has been found guilty of reckless or drunken driving, etc., or who has failed to satisfy a judgment, shall be suspended and not reinstated until he can produce a bond or insurance policy to show financial responsibility and has satisfied the judgment. Louisiana requires aircraft owners carrying passengers for hire to carry insurance against liability to anyone who may be injured in person or property. Virginia had regulations requiring commercial aviators operating in interstate commerce to insure against injuries to passengers and against liability for property damage to anyone, but has repealed them. The proposed act in requiring all aircraft to carry insurance for ground damage goes beyond any laws regarding aviation now in effect in this country. It is broader in its operation than any compulsory insurance statutes regarding motor vehicles except that of Massachusetts. Although the Rome Convention and the Air Navigation Act, 1936, in England provide for compulsory insurance, the Rome convention has never received

sufficient support to come into operation at all, and the insurance provisions of the Air Navigation Act, 1936, have not been put into effect although the act was passed 2 years ago.

VI. PRESENT PROTECTION AVAILABLE

We are informed by the aviation insurance underwriters1 that they believe that all the air lines are protected against liability for injuries or death to passengers with insurance coverages considered adequate. The insurance policies contain a clause that the insurance companies shall be liable regardless of the bankruptcy or insolvency of the insured. We are further informed that the underwriters know of no instance in the history of air transport operations where a claim against a scheduled air line for injury or death to a passenger has been unsatisfied because of a lack of financial responsibility on the part of the air line.

In addition, we are informed that during the period between January 1, 1934, and January 1, 1938, the average settlement for a passenger fatality was slightly under $10,000. This figure includes cases where there was no payment made because there was no heir or personal representative of the deceased, or where the estate did not see fit to file a claim. In the great majority of cases during this period, a settlement was reached without the filing of suit. In all cases of air-line passenger fatalities during this period where suit was filed, a settlement was reached before rendition of judgment. Furthermore, the average period of time in which fatality cases were settled was less than a year.

In addition to the liability insurance carried by the air lines, a passenger is always free to purchase traveler's insurance, which is available to persons traveling by airplane at the rate of 25 cents for a $5,000 trip policy. A 25cent premium policy covers a flight up to 4 hours in length; a 50-cent premium policy covers a flight up to 8 hours in length, and so on. This is absolute insurance payable to the traveler in case of death or dismemberment regardless of the carrier's negligence. It is available to travelers by air at a rate which compares favorably with the rate for rail travel. Over 13,000 of such policies were sold by the scheduled air lines in July 1938, and over 14,000 in August 1938.

Moreover, life insurance covering death in an aircraft accident while the insured is a passenger in a licensed airplane operated by a licensed pilot, including private planes as well as scheduled air transport planes, is available at the rate of $1.80 per $1,000 per annum. The same policy with additional coverage for dismemberment and disability-lump sums for dismemberment and $5 per week for each $1,000 of principal sum, as long as the disability continues, but not to exceed 52 consecutive weeks for one disability-is available at the rate of $3.90 per $1,000 per annum.

Insurance is available for air mair and air express, just as it is for mail and express carried by other forms of transportation.

We are also informed by the underwriters that all the scheduled air lines carry insurance against liability for ground injuries to persons and property. Moreover, as regards property damage, insurance is available to property owners in the form of a policy supplemental to a fire-insurance policy, which covers tornado, cyclone, windstorm, hail, explosion, smoke damage, damage from vehicles, and damage from aircraft.

Finally, there are the statutory requirements imposed by the Civil Aeronautics Act upon the air lines with reference to safety and efficiency of operation. In the first place, every common carrier by air is required to have a certificate of convenience and necessity, which in itself is an insurance that the line is a responsible organization. See Civil Aeronautics Act of 1938, section 401. Furthermore, there are many strict requirements regarding aircraft inspection, personnel examination, etc., which are extremely comprehensive and thoroughgoing. (See Civil Aeronautics Act, Title VI.) The safety regulation of aircraft is infinitely stricter than anything imposed upon motor vehicles, and it is far more comprehensive than anything imposed upon the railroads by the Boiler Inspection Act (45 U. S. C. A., secs. 22-34) and the Safety Appliance Acts (45 U. S. C. A., secs. 1-16).

10 There are three groups of aviation insurance underwriters. They are: Associated Aviation Underwriters, Aero Insurance Underwriters, United States Aviation Underwriters. Substantially all scheduled air-line insurance in the United States is handled by one of these groups.

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