Australia's carriers' liability and insurance arrangements are outlined in the Civil Aviation (Carriers' Liability) Act 1959 (the CACL Act).
The CACL Act gives the force of law to a number of passenger liability frameworks, including those arising under international conventions including the 'Warsaw System' and the Montreal Convention.
Part IV of the CACL Act also provides a separate system of passenger liability for domestic passenger travel. The CACL Act is complemented by state government legislation to create a national uniform scheme.
Arrangements for compulsory passenger insurance for holders of certain air operator certificates operating to, from or within Australia are outlined in Part IVA of the CACL Act.
Liability arrangements for third party (surface) victims are outlined in the Damage by Aircraft Act 1999.
Montreal Convention
The Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal Convention) is a multilateral treaty that establishes, amongst other matters, liability thresholds for air carriers in relation to the international carriage of passengers, baggage and cargo. The Montreal Convention provides for a two-tier system of liability, with claims up to an initial level on a strict liability basis. Damages above the Montreal Convention strict liability thresholds are possible, unless the carrier is able to prove the incident was not caused by its own negligence or wrongful act or omission.
Australia implements the Montreal Convention through the Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008. The Montreal Convention 1999 came into effect in Australia on 24 January 2009.
The current limits (thresholds) of liability are as follows:
| Montreal Convention 1999 | Current Limit*
SDR | Revised limit
SDR |
|---|---|---|
| Injury / death | 113,100 | 128,821 |
| Delay | 4,694 | 5,346 |
| Baggage | 1,131 | 1,288 |
| Cargo | 19 | 22 |
Montreal Convention (1999)
| Liability Category | Current Limit—Special Drawing Rights (SDR)* |
|---|---|
| Injury/ death of a passenger | 151,880 |
| Delay | 6,303 |
| Baggage | 1,519 |
| Cargo | 26 |
* as of 28 December 2024
Note – Special Drawing Rights (SDR) refers to a basket of currencies reviewed periodically by the International Monetary Fund to ensure it reflects the relative importance of the world's trading and financial systems. As at August 2025, one SDR was valued at USD 1.36 (https://www.imf.org).
The Montreal Convention includes a mechanism for conducting a periodic review and revision of these thresholds to ensure that their economic value is not eroded over time due to inflation or other economic factors. The Civil Aviation Legislation Amendment (1999 Montreal Convention and Other Measures) Act 2008 contains provisions which recognise that the Montreal Convention's liability thresholds will be reviewed and revised from time to time. These provisions allow for the revision of liability thresholds to enter into force under Australian law automatically.
Warsaw Convention
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 Warsaw Convention has been amended on a piecemeal basis over succeeding years by a number of protocols and conventions.