Carriage by Air Acts (Application of Provisions) (Overseas Territories) (Amendment) Order 1984 (Hansard, 10 April 1984)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Young)
My Lords, I beg to move that the draft Carriage by Air Acts (Application of Provisions) (Overseas Territories) (Amendment) Order 1984 be approved. The carriage of passengers and cargo by air in British overseas territories is governed, as in this country, by the Carriage by Air Act 1961, by the Carriage by Air (Supplementary Provisions) Act 1962 and by various orders made under those Acts. In broad terms, they lay down the rules on tickets, airway bills and baggage, and they provide for the strict liability of the carrier (so that negligence does not have to be proved) subject to the limitation of the amount of the carrier's liability. We are concerned today with some proposed technical modifications to the rules for our overseas territories, matching modifications already made in respect of this country.
The order for which I seek the approval of your Lordships' House substitutes special drawing rights for gold francs as the unit in which the limits of the air carrier's liability are expressed for the purposes of non-international carriage under the law of the dependent territories to which the order will apply. At the same time, the order will raise the limits of the air carrier's liability in relation to non-international carriage under the law of dependent territories. The limits will be increased from 875,000 gold francs to 100,000 special drawing rights. In terms of sterling equivalents, this represents an increase from about £41,000 to about £71,000.
The order will apply to Bermuda, the British Antarctic Territory, the British Indian Ocean Territory, the British Virgin Islands, the Cayman Islands, the Sovereign Base Areas of Akrotiri and Dhekelia, the Falkland Islands and Falkland Island Dependencies, Gibraltar, Hong Kong, Montserrat, St. Helena and Ascension and the Turks and Caicos Islands. The Governments of all these territories have been consulted on the terms of the draft order, and agree.
The change from gold francs to special drawing rights and the increase in the limits of liability will bring the law of the dependent territories into line with the law of the United Kingdom under the Carriage by Air Acts (Application of Provisions) Order 1967, as amended in 1979 and 1981. The International Monetary Fund discarded the gold franc as a unit of account for its transactions following the entry into 1051 force of the second amendment to its articles of agreement in 1978. As a result of this, the limits of the air carrier's liability in non-international carriage under the law of the United Kingdom were converted into special drawing rights in 1979. At that time the limits were not increased.
In April 1981 the Civil Aviation Authority introduced an amended standard condition in air transport licences which required United Kingdom airlines to contract for a limit of not less than 100,000 special drawing rights per passenger for the purpose of international carriage. Although the limits of liability in international carriage are set by international convention (the Warsaw convention and related instruments) it is permissible for airlines to contract for higher limits, and this they often do. The increase in the contractual limits for the purposes of international carriage made it desirable to bring the limits in relation to non-international carriage into line. This was done as a matter of United Kingdom law later in 1981.
The present order will, as I have said, bring the position in dependent territories into line with the position in the United Kingdom. The order is substan-tially similar to the Carriage by Air Acts (Application of Provisions) (Amendment) Orders of 1979 and 1981, though the provisions concerning the conversion of special drawing rights into local currency have been adapted to take account of the fact that not all the currencies in question (for example the East Caribbean dollar) are regularly quoted by the IMF. It is clearly desirable to bring the law in dependent territories into line with the law in the United Kingdom, particularly in relation to carriage between the United Kingdom and dependent territories. No objection on the part of airlines in dependent territories is anticipated, and the increase in limits will be welcomed by the air traveller. My Lords, I beg to move.

§ Lord Barnett
My Lords, I am sure your Lordships will appreciate that the IMF were very sensible to move away from gold francs to SDRs, given that everybody in your Lordships' House and the country at large will understand the difference between gold francs and SDRs. But I wonder whether the noble Baroness can tell us what assumptions the Government made in deciding to increase the real amount to 100,000 SDRs. I wonder whether, at the same time, she can also tell us how this compensation level for non-international traffic compares with other western European countries in respect of this particu-lar form of travel compensation for death and injury. Also, what representations, if any, has she had from those who might possibly be affected by this increase in the level of compensation?

Lord Hawke
My Lords, can my noble friend say what is the current exchange rate between sterling and SDRs?

§ Baroness Young
My Lords, the noble Lord, Lord Barnett, has asked me two questions on this order. If 1052 I may first take the second question that he asked, about what representations have been made, the fact of the matter is that the order gives an approximate equity of treatment between the air carrier and the traveller, in the sense that the carrier's liability is limited under the order and the plaintiff (or in this case the traveller) does not have to prove negligence and therefore qualifies for the amount. In that sense, therefore, there is advantage to both sides. So far as I know, any representations have been covered in the proposals which have been made.
Turning to the noble Lord's first question about the basis for the sums of money, may I say to him that it takes into account both the rate of inflation and the change in currency rates. It does not exactly parallel the orginal amount of compensation when these matters were first introduced. However, the fact of the matter is that it is open to anybody who is either a traveller or involved in this non-international travel to take out personal insurance in order to cover this amount.
I do not have the information for which my noble friend Lord Hawke asked me. If I may, I shall write to him.