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Air Carrier and State Liability to Pay Compensation to Families of Lion Air JT-610 Victims and the Families’ Rights to File Claim for Damages

On Monday, 29th October 2018 Boeing 737 Max 8 aircraft with flight number JT-610 operated by Lion Air was found crashed in the waters of Tanjung Karawang, West Java. The aircraft took off from Soekarno Hatta International Airport at 06.20 West Indonesian Time (Waktu Indonesia Barat (“WIB”) headed to Pangkal Pinang, Bangka. However, at 06.33 WIB the aircraft was reported to have lost contact. The aircraft had requested to return to base prior to its disappearance from radar.

On Thursday, 1st November 2018, a joint team of divers for the evacuation of Lion Air JT-610 found the Flight Data Recorder (“FDR”), a part of the aircraft’s black box components. The other component of the black box, the Cockpit Voice Recorder (“CVR”) containing recordings of conversations between the crew and ground control has not been found because it was separated from the FDR in the crash.  National Transportation Safety Committee (Komite Nasional Keselamatan Transportasi (“KNKT”)) has revealed that based on the recovered FDR, the aircraft had experienced technical problems in its flight from Denpasar to Jakarta due to failure of its air speed indicator including the Angle of Attack (“AoA”) censor, which was responsible to calculate aircraft angle against the air flow. Unfortunately the recovery of FDR has only revealed 70 – 80% of information required to determine the cause of accident. The CVR is required to reach a definitive conclusion.

On 7th November 2018, Federal Aviation Administration (“FAA”) issued an Emergency Airworthiness Directive for Boeing 737 Max aircraft. The FAA deemed the Boeing 737 Max to have a safety issue which may be prevalent in other Boeing 737 Max aircrafts. The directive was issued to guide worldwide aviation authorities after investigations by FAA and Boeing found that the censors were not working on the Lion Air JT-610. FAA stated that the AoA censors on Lion Air JT-610 aircraft showed false data causing the pilots to have difficulties controlling the aircraft. The censors have potentially misread the aircraft aerodynamics position which resulted in it doing a nosedive and subsequently crashed. US aviation regulators have ordered a review of the Boeing aircraft safety procedures and is looking into which information had or had not been imparted by Boeing to air carriers regarding the new flight control system.

The above became the basis for family of Rio Nanda Pratama, a doctor who was a victim of the crash to file lawsuit against The Boeing Company represented by US attorneys from the firm Colson Hicks Eidson and Bartlet Chen LLC. The lawsuit was filed against Boeing because as the producer of Boeing 737 Max 8 aircraft, they have neglected to inform the clients and pilots of the particular aircraft regarding the significant alteration in flight control system.

  1. Air Carrier Liability

In commercial flights, the air carrier is an organization providing air transportation services to passengers or goods through a business in the form of a legal entity with the responsibility to guarantee passenger safety.

In the business of air transportation, safety, convenience and on time performance are key. all air carriers are required to pay close attention to the above three principals and guarantee safety and convenience to passengers in reaching their final destination on time.

In case of accidents, the cause of accident is key to determine which party is responsible. Authorities will launch investigation to determine if the cause of accident is due to human error, weather, or technical error, such as factory defect during assembly. The cause of accident will determine whether the families of victims can file claim for further damages in addition to receiving compulsory compensations from the air carrier and the state. 

Aviation law recognizes the following three principles in carrier liability:

  1. Presumption of Liability


Air carrier is considered to be liable by passengers or cargo. The party who suffered loss is not required to proof their rights to receive indemnity.


  1. Limitation of Liability


Air carrier is liable up to a certain amount.


  1. Strict Liability


Air carrier is held absolutely liable with no  redeeming possibility unless fault also lies on the passenger.

In determining carrier liability, we need to refer to applicable laws and regulations rising from national and international laws.

Indonesian law recognizes the presumption of liability, in which Lion Air is automatically held accountable and liable unless Lion Air can proof their innocence (reverse burden of proof). Pursuant to Article 141 of Law Number 1 of 2009 regarding Aviation (“Aviation Law”), Lion Air is liable for the following:

  1. Carrier shall be liable for indemnity for death of passengers, permanent defect, or injuries caused by incidents on board the aircraft and/or while getting on or off the aircraft.


  1. If the loss as mentioned in item (1) was incurred due to intentional action or fault of the carrier or any of its employees, the carrier shall be liable for damages incurred and shall not be able to use the provisions under this law to limit its liability.


  1. Any next of kin/beneficiary of the victim or the victim suffered due to air transportation incident as meant in item (2) shall submit a lawsuit to court in order to get additional compensation other than the predetermined compensation for losses.

Minister of Transportation Regulation Number 77 of 2011 regarding Air Carrier Liability (“MoT Reg 77/2011”) further emphasizes that air carriers are liable for the following losses:

  • death of passenger, permanent defect or injury;
  • loss or damage of cabin baggage;
  • loss, destruction or damage of registered baggage;
  • loss, destruction or damage of cargo;
  • delayed air transportation; and
  • loss suffered by third party.


  1. Indemnity

The sum of indemnity Lion Air is liable to pay for passenger death due to aircraft carrier shall refer to Article 3 of MoT Reg 77/2011 which states that death of passenger on board an aircraft due to accident or incidents related to air transportation is entitled to Rp 1.250.000.000 (one billion two hundred fifty million Rupiah) in indemnity per passenger, in addition next of kin/beneficiary of victims are entitled to a Rp 50.000.000 (fifty million Rupiah) benefit from the Government Insurance Institution as regulated in Minister of Finance Regulation Number 15/PMK.010/2017 regarding The Sum of Benefit and Compulsory Passenger Accident Liability Cover for Public Transportation on Land, River/Lake, Ferries/Crossings, Sea, and Air (“MoF Reg 15/PMK.010/2017”).

  1. Rights of Next of Kin/Beneficiary to File Claim for Damage

The above total of Rp 1.300.000.000 (one billion three hundred million Rupiah) is the sum the air carrier and state is required to pay to  next of kin/beneficiary of victims (“Compulsory Compensation”). Next of kin/beneficiaries of victims are absolutely entitled to receive such amount. However, in practice the payment of such Compulsory Compensation is followed by conditions set by air carrier so that next of kin/beneficiaries of victims will sign agreements relinquishing their rights to file claims against all parties related to the aircraft accident. Most families of victims who are unaware of the law and in bereavement will sign such agreements without knowing that their right, as set in Article 141 paragraph 3 of Aviation Law is being taken away from them.

Receiving Compulsory Compensation does not erase next of kin/beneficiaries rights to claim for further damages, especially if investigation shows the presence of intentional action or fault/negligence from parties related to the accident, whether it’s the air carrier or aircraft producer and all persons employed under them. If indications of intent/fault/neglect is found, pursuant to Article 1365 or 1366 of the Indonesian Civil Code (“Civil Code”) and Article 23 of MoT Reg 77/2011 which states that the sum of indemnity provided for in this regulation does not cover the possibility for next of kin/beneficiaries to file claim against air carrier to court within the area of the Republic of Indonesia or arbitration or other alternate dispute resolution in accordance to applicable laws and regulations, next of kin/beneficiaries of victims are entitled to file claim for further damages against all parties related to the accident.

However no claims shall be made, if next of kin/beneficiaries of the victims have signed the agreement to not sue with Lion Air. Therefore it is important to give out information regarding the rights to receive Compulsory Compensation and file claim for further damages to families of victims.


Conclusion

Next of kin/beneficiaries to victims of the Lion Air JT-610 accident is entitled to receive Compulsory Compensation without having any conditions attached to it, such as the relinquishment of their rights to file claims against other parties related to the accident. Providing education to families of victims regarding this matter is important to prevent air carrier’s attempt to misguide them. Next of kin/beneficiaries are entitled to file for further damages especially if investigation reveals more fact and evidences indicating intent/fault/neglect of related parties have caused the accident, in this case being Lion Air and Boeing.


Mustafa Kalim

m.kalim@legisperitus.co.id


Fanri Tamara

f.tamara@legisperitus.co.id


Felicia Tania

f.tania@legisperitus.co.id


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