CARRIAGE BY AIR AND ROAD BILL [H.L.] (Hansard, 13 February 1979)

§ Lord JACQUES

My Lords, I beg to move that this Bill be now read a second time. This Bill is concerned with international conventions which limit the liability of the carrier. For most modes of transport there is an international convention, and every one of these 1235 conventions provides that the carrier may limit his liability. It is recognised that liability involves insurance, and that insurance is a cost which has to be covered by the carriage charges. The object is a limit which covers the general run of claims, leaving those with exceptionally large claims to take out their own insurance. It also has the added advantage that in the case of goods the carrier need not inquire minutely into the value of the goods which he carries. International conventions of this kind facilitate the standardisation of contracts and make life a little easier for the customer.

In the case of travel by air, the international conventions go back to the Warsaw Convention of 1929. This convention reversed the burden of proof. The carrier became liable, unless he could show that it was not his fault. He could limit his liability, in the case of passengers, to 125,000 gold francs. At that date, this was £1,000 per passenger. In the case of goods, he could limit his liability to 250 gold francs per kilo, which at that date was equal to £2,000 per ton.

The Warsaw Convention of 1929 was brought into effect in this country by the Carriage by Air Act 1932. By 1955, as a result of inflation, the limit of £1,000 per passenger had risen to £3,000. In 1955, however, there was The Hague Protocol which raised the limit per passenger from 125,000 gold francs to 250,000 gold francs, which was equal at that date to £6,000. This was put into effect by the Carriage by Air Act 1961. Unfortunately, the 1955 Hague Protocol was not accepted by the United States of America. That country has a standard of living which is somewhat higher than that to be found in most other countries, and its courts are much more liberal with compensation.

By the Montreal Agreement of 1966, the airlines agreed that on flights to and from the United States they would waive their defence that the carrier had taken all necessary measures to avoid damage and would pay compensation up to a limit of 58,000 dollars per passenger, excluding costs. An attempt was made to heal the breach in 1971 by a protocol which was agreed at Guatemala City, but this was not accepted by the United States. Consequently, the protocol was not ratified by other countries.

1236 In the meantime, the United Kingdom and other European countries took steps to make airlines under their jurisdiction offer, by special contracts, the same compensation to passengers generally as was offered to those flying to and from the United States. Under this contract, the limit is £29,000, or 58,000 dollars, so there is a little confusion. We, and certain other European countries, have fixed the limit at £29,000 in the case of the airlines under our jurisdiction. In other cases, there will be other limits. Where a carriage is subject to The Hague Convention the limit will be £10,780. That is to say, the £6,000 in 1955 at the time of The Hague Convention has now become £10,780 as a result of inflation.

This Bill seeks to give effect to the latest convention, the Montreal Protocols of 1975. These protocols make the carrier strictly liable and raise the limit to 100,000 units of International Monetary Fund drawing rights. That is equal at the present time to £66,000. Similarly, the limits for cargo and luggage were put in terms of International Monetary Fund drawing rights. And, incidentally, the limit so far as cargo is concerned is £11,000 per ton. There are amending protocols to two international conventions dealing with carriage by road and the effect of these is incorporated into this Bill. These simply convert the compensation from gold francs to International Monetary Fund drawing rights so that in effect there is a certain amount of uniformity.

Your Lordships will have noticed that there is a time lag between the dates of protocols and the date of the Act which put those protocols into effect in this country. For example, in the case of The Hague Protocol it was dated 1955 but it was not put into effect until 1961—six years later—and even the Montreal Protocol with which we are directly concerned this evening was adopted in 1975 and we are now in 1979. There is a time lag which is unnecessary. It is partly due to the difficulty of finding parliamentary time for the necessary legislation. Consequently it is provided in the Bill which is before the House that future amendments to the conventions shall be made by order, subject to an Affirmative Resolution of both Houses. This is perhaps the most appropriate case of all for using an order. 1237 The principal objection to an order which is subject to the Affirmative Resolution procedure is that it cannot be amended. Each House is asked to say, "Yes" or "No".

That is already the case in regard to international protocols. A national Parliament cannot amend an international protocol: the national Parliament is called upon to say, "Yes" or "No", so therefore this is the ideal case for the use of the Affirmative Resolution. If the national Parliament is limited to saying, "Yes" or "No" and cannot amend, then clearly three Readings, a Committee stage and a Report stage are not necessary. The Affirmative Resolution is the appropriate method, when the House has the opportunity of saying, "Yes" or "No" after due debate. So I contend that this is the ideal way of doing it and I can quote precedents. Section 8 of the Civil Aviation Act 1949 allows amendment of the Chicago Convention by order and by Affirmative Resolution. There are similar procedures in the Carriage by Railway Act 1972 and the Carriage of Passengers by Road Act 1974. Therefore, I think there is a strong case for using the Affirmative Resolution procedure.

I could go through the sections and Schedules, but I should merely be repeating what I have already said, although in a different order. I think at this time of the night I have said sufficient to introduce this Bill. I commend it to the House, and beg to move that it be read a second time.

§ Lord TREFGARNE

My Lords, as always the House is grateful to the noble Lord, Lord Jacques, for introducing this Bill and for giving us that admirably short and concise explanation of the provisions of the Bill. I should like to express also a personal word of thanks to him for arranging, through his Department, for me to receive in advance a very helpful brief on the clauses of the Bill which I hope will enable me to speak briefly tonight and not ask too many questions, at least until the Committee stage.

As the noble Lord has explained, the Bill is principally designed to bring into our law the various conventions recently 1238 entered into and principally, of course, the Montreal Convention of 1975, and to make certain provisions arising from that. We certainly would not wish to oppose that intention. But, at the end of his speech, the noble Lord did refer to the power contained in the Bill to vary the provisions of this Act and other Acts related to it by order in future, and that is a matter which causes me to pause and think for a moment. I shall wish to consider this question especially carefully in the light of what the noble Lord has said tonight, because he was good enough to go into that matter quite carefully. For the moment I must say that I do not agree with him that it is appropriate necessarily to give the Government these powers. I would say that Acts of Parliament ought to be varied by further Acts of Parliament and not by orders slipped through in the wee small hours, perhaps when the House is as jam-packed as it is tonight! I am not yet decided on what is the right course of action in this matter, but I think I shall at least be putting down some probing Amendments at the Committee stage to get the Government's thinking in even more detail on this subject, because I know that a good many of my noble friends behind me share my concern in this matter. Having said that, the principal purpose of this Bill is certainly acceptable to us and I hope that your Lordships will now give it a Second Reading.