Travel
insurers can limit the amount recoverable for any loss; so too can
airlines. Airlines in 119 countries have
their liability for lost luggage limited by a formula based on the
International Monetary Fund’s special drawing rights, currently fixed at just
over $2000 for any Air NZ lost luggage claim.
Air New Zealand took a test case to the
High Court after an un-named traveller was awarded $15,000 damages in the
Disputes Tribunal for replacement clothes purchased after a bag went missing on
the Los Angeles-London leg of an Air NZ flight.
She said an Air NZ representative in London told her she could replace the
lost clothing and would be reimbursed on a “like-for-like” basis. The lost luggage did turn up, nine days late.
Air New Zealand challenged the Tribunal
ruling. It said contracts of carriage by
air limit damages payable. The 1999
Montreal Convention limits airlines’ liability for lost luggage to 1131 Special
Drawing Rights. An SDR is not a unit of
currency. It is a unit of account used
by the International Monetary Fund based on the value of a prescribed mix of
national currencies. The Convention
forms part of Air NZ ticketing contracts.
Justice Nation ruled the Tribunal was wrong
to ignore the Montreal limit for baggage losses by awarding damages in excess
of 1131 SDRs, being $2100. The un-named
traveller also had private travel insurance.
This insurer paid $1900.
Air
NZ v. Disputes Tribunal – High Court (9.03.16)
16.041