Winter 2000

Recent Legislative Changes

Within the last year both Canada and the United States have adopted Montreal Protocol No. 4 which amends the Warsaw Convention. The Warsaw Convention sets out the rules relating to the international carriage by air. Under the Warsaw Convention an air carrier is entitled to limit its liability to about $25 U.S. per kilogram of the goods damaged or lost unless the shipper declares a value on the airway bill. This limitation of liability is lost is the claimant can show that the loss occurred as a result of the willful misconduct of the air carrier (or its employees). Although difficult to prove it was possible to demonstrate willful misconduct when it could be shown that the air carrier's employees committed theft. Montreal Protocol No. 4 eliminates willful misconduct. An air carrier is entitled to limit liability on cargo claims in all events if the value of the cargo is not declared on the waybill. What this means is that the carrier's employees can commit theft and the carrier can still limit its liability! It will be of interest to see how this change in the law will affect how airlines deal with security and claims.

With the closing of the last Parliament and the Federal Election all draft legislation before the House of Commons is automatically dead. Any piece of legislation that did not get passed before Parliament stopped sitting will have to be introduced in the new Parliament. As a result, the Marine Liability Act which introduced a Canadian jurisdiction clause into the Carriage of Goods by Water Act, incorporated the Athens Convention on passenger liability and created a Federal "Negligence Act" died on the order table. The legislation will have to be re-introduced which will delay its passage.

In the U.S. the new Carriage of Goods by Sea Act which has carried a lot of controversy with it is slated to be introduced sometime after Congress reconvenes in January. The introduction may not happen until April. Senator Hutchinson from Texas has stated publicly she will introduce the bill and then will hold hearings to receive input from interested parties. It is likely to be another six months or more before we see this piece of legislation become law in the U.S.

This newsletter is published to keep our clients and friends informed of new and important legal developments. The articles are not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.