Air Carriers' Liability and Insurance
Australia's carriers' liability and insurance arrangements are outlined in the Civil Aviation (Carriers' Liability) Act 1959 (the CACL Act).
The Act gives the force of law to a number of passenger liability frameworks, including those arising under the ‘Warsaw System’, the Montreal Convention, and a separate system of liability for domestic travel.
The liability framework for domestic passenger travel is created under Part IV of the Act, and is complemented by state government legislation to create a national uniform scheme.
Arrangements for compulsory passenger insurance are outlined in Part IVA of the Act.
Liability arrangements for third party (surface) victims are outlined in the Damage by Aircraft Act 1999 (the DBA Act).
Changes effective 31 March 2013
The Aviation Legislation Amendment (Liability and Insurance) Act 2012 (the Act) has introduced changes to air carriers' liability and insurance arrangements that were proposed in the 2009 National Aviation Policy White Paper.
The changes to air carriers' liability and insurance requirements effective 31 March 2013 include the following:
- the increase of the domestic passenger liability cap and mandatory insurance requirements from $500,000 to $725,000 per passenger under the CACL Act;
- the removal of references to ‘personal injury’ and replaced with ‘bodily injury’ under the CACL Act to ensure consistency with the 1999 Montreal Convention concerning international flights;
- the inclusion of a provision for contributory negligence to be considered in compensation claims made under the DBA Act;
- the preclusion of potential claimants from claiming compensation for mental injuries where that person has not suffered additional personal or property damage under the DBA Act;
- the inclusion of a provision to allow defendants to seek a right of contribution from other parties who may have contributed to the damage suffered by the person bringing the claim under the DBA Act; and
- the removal of references to the Montreal Protocol Number 4 and replaced with the 1999 Montreal Convention under the CACL Act.
For further information:
- CASA Helpline 131 757 (ask for the insurance helpline)
- CASA webpage on carriers' liability insurance
- Department of Infrastructure and Transport contact:
Trade and Aviation Markets Policy Section
Aviation Industry Policy Branch
The Department of Infrastructure and Transport
GPO Box 594 Canberra ACT 2601
Telephone: 02 6274 7064
2009 Review of Carriers' Liability and Insurance
A review of Australia's carriers' liability and insurance arrangements was conducted as part of the development of the National Aviation Policy White Paper (the ‘White Paper’) that was released in December 2009.
As part of the review, a discussion paper was developed containing 30 ‘preliminary findings’ on the existing framework, including options on how the framework could be improved.
- Discussion Paper [PDF: 1224 KB] .
The main outcomes proposed by the discussion paper were:
- the introduction of a mandatory insurance scheme to require aircraft to be insured against third party (surface) liabilities;
- an increase in the liability of aircraft operators for the death or injury of passengers on domestic flights under the CACL Act, and a corresponding increase to the minimum insurance requirements; and
- a range of technical amendments.
In the White Paper, the Government announced that it would implement a mandatory third party insurance scheme, and increase the domestic liability cap. It did not elaborate on whether the government would proceed with the technical amendments anticipated in the discussion paper.
Implementation and review of the reforms is ongoing. See above information on the introduction of the Aviation Legislation Amendment (Liability and Insurance) Act 2012.
The 1999 Montreal Convention came into effect for Australia on 24 January 2009.
The Montreal Convention is an international agreement which updates laws relating to carriers' liability. It is designed to replace the complicated and outdated ‘Warsaw System’ of carriers' liability.
The Montreal Convention was implemented in Australia by the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008. This legislation followed extensive consultation with interested industries.
- A copy of the Bill and the Explanatory Memorandum can be found on the Parliament of Australia website.
- Minister Albanese media release
The Department released a discussion paper in September 2005 regarding the implementation of the 1999 Montreal Convention on carriers' liability. The discussion paper also proposed minor administrative changes for the system of international airline licenses, the mandatory requirements for carriers' liability insurance and the designation of international airports. Some of these changes are facilitated by the Aviation Legislation Amendment (International Airline Licences and Carriers' Liability Insurance) Act 2008.
A copy of the discussion paper is available here, along with an earlier discussion paper canvassing issues in relation to the Montreal Convention, and a copy of the Montreal Convention itself:
- Montreal Convention and related administrative amendments—2005 Discussion Paper [DOC: 136 KB]
- Reform of Carriers Liability—The Montreal Convention—2001 Discussion Paper [PDF: 176 KB] 
- The Montreal Convention [PDF: 46 KB] 
The Warsaw Convention was signed in 1929 and deals with the rules of liability governing international carriage of persons, baggage and cargo by aircraft. The Convention has been amended on a piecemeal basis over succeeding years by a number of protocols and conventions.
The Warsaw Conventions and the various amending instruments to which Australia is a party are given the force of law in Australia by the Civil Aviation (Carriers' Liability) Act 1959.