C. The Rome Convention of 1952
Council’s views on limits of liability contained in Article II and provisions regard-ing the security for the operator’s liability appearing in Chapter III. Although the Legal Committee considered its Mexico City draft as being ripe for submission either to the ICAO Assembly or a diplomatic conference for .nalization and opening of signature, the Committee was not entirely convinced that some issues of an economic and policy nature incorporated in the draft showed the considered .nal without their being examined by the Council.171
The Council recognized in limine that the Mexico City draft was similar to the Rome Convention of 1933 in that both instruments attempted to regulate and establish uniformity with respect to the liability of aircraft operators to persons on the surface who sustain injury, death or property damage as a result of aircraft accidents involving foreign aircraft. The main thrust of the Council’s reasoning behind the recognition of the draft convention’s relevance was the need to balance the legitimate interests of aircraft operators engaged in international air transport against those of the general public on the ground who may suffer from accidents involving foreign aircraft.
II. Insurance
The Council recognized that the operator needed protection against the risk of catastrophic loss, which the draft convention afforded him by limiting his liability to a maximum amount in any one instance, regardless of the damage caused except in the case of intentional damage caused by the operator or in an instance where the operator had wrongfully taken possession of an aircraft without the consent of the owner. Furthermore, the instrument afforded additional protection to the operator by placing a special limitation on the amount of his liability for personal injury or death, to any one person. With regard to protection offered to a third party on the surface, the Council noted that in the event of loss or damage, he will be able to recover the full amount of damages with the minimum of litigation. The Conven-tion ensured the abovementioned protection by allowing the person so injured to bring an action in courts of the place where the damage occurred and by denying the operator’s defence of “no negligence” which many jurisdictions afforded and, most importantly, by identifying maximum and minimum limits of liability which would assure adequate compensation to the injured.
The Council carefully examined detailed statistics provided to it by States and others with regard to the cost of insurance together with past records of settlement of third party claims in accidents involving aircraft.
In framing comments on the liability limits in the draft convention, two trends of opinion emerged in Council, the one holding that the limits should be substantially increased, the other that they should be retained at approximately the level in the
171Volume 7, Minutes and Documents of the ICAO Legal Committee, p. 379.
draft. There was, however, general agreement that the two chief factors to be taken into account in considering the level at which such limits should be set were:
(a)
The limits should not be set so high as to cause the cost of third party insurance to become an excessive burden on international civil aviation.
(b)
The limits should be set high enough to cover compensation to third parties in all but extremely rare catastrophic accidents.
There was broad agreement also that the in.uence of the .rst of these two factors was not strong up to levels of liability limits considerably higher than those under discussion. The disagreement lay chie.y in the evaluation and application of the second factor.
It was noted that the available statistical data indicated clearly that, under existing conditions, the cost of third party insurance under the provisions of the Mexico City draft would generally be a small proportion of total insurance costs for an aircraft operator and an almost negligible part of his total operating costs. Of the rates reported for third party insurance for commercial aircraft in several different parts of the world, none represented more than 0.06 cents (U.S.) per ton-mile available, even for twice the amount of those in the Mexico City draft. Rates for private operators were relatively higher owing to the comparatively small .gure of their total operational costs and the low utilization of their aircraft; rates reported to Council for third party insurance costs for private operators varied between 2% and 5% of estimated operating costs for liability limits such as those in the Mexico City draft.
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