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Carrying Some Baggage? The Law of Airlines and Lost Luggage

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About The Author

Harneet Singh (Guest Contributor)

Harneet is an engineering graduate from the Delhi College of Engineering who also possesses an MBA from IMT Ghaziabad. He is currently pursuing a degree in International Law. He has founded his own business, and also works as a consultant for Ways2Wealth, SAMT and Claim Flights - a website dedicated to helping air passengers make successful claims.

Flying might not be all plain sailing, but the fun of it is worth the price.

Amelia Earhart

Of late, the number of cases of passenger mistreatment by airlines have been growing. There are numerous complaints ranging from flights being delayed and cancelled to grievances about overbooking, an issue that has become increasingly publicised following a viral video surfaced of a passenger being violently dragged off a United Airlines flight.

One such topic of complaint which is often the subject of a huge number of complaints – and one that reached new levels of prominence for lawyers in particular thanks to a notorious affair involving the longest-serving judge of the Chancery Division of the High Court – is the case of missing, damaged or lost luggage. The law here is surprisingly complex, and appears to be weighted heavily in favour of airlines. Whether this is fair, as this article examines, is highly questionable: it seems to deny airline passengers – who, after all, have already paid the full price of a ticket –the service they deserve.

The Law – An Overview

The provisions of international law which govern lost, damaged or missing luggage (termed ‘baggage’ under the various legal provisions) claims can be found in the Montreal Convention of 1999, which was incorporated into English law by the Carriage by Acts Order 2002. A major multilateral treaty that sought to modernise the provisions governing the international air transport community, the Montreal Convention – ratified by 199 states and the EU – covers not only missing, damaged or lost baggage cases but also claims related to flight safety, delays and terrorism claims.

The Montreal Convention represented a significant changing point in this area of the law; with airlines increasingly required to account for the interests of consumers, it marked a stark change from the position under its inadequate predecessor – the Warsaw Convention of 1929 – under which significant monetary punishments were rarely available because of the need to prove that the airline were guilty of wilful neglect.

The Montreal Convention

Article 1 of the Montreal Convention defines the scope of its application, holding that it applies to ‘all international carriage of persons, baggage or cargo performed by aircraft’, whether or not it is ‘gratuitous’ or ‘for reward’. The only significant exception to this is for the postal service, as outlined by Article 2 of the Montreal Convention.

One of the major complexities surrounding the Montreal Convention is the way in which is calculates the limits of airlines’ liabilities; its use of so-called Special Drawing Rights (SDRs) is often beyond the understanding of the average passenger trying to bring a claim. An SDR is a type of foreign exchange reserve asset created by the International Monetary Fund which has its value based on an artificial basket of currencies consisting of the US Dollar, the Euro, the British Pound, the Chinese Renmib and the Japanese Yen. As of 10 August 2017, the value of an SDR is about £0.92.

The maximum liability that an airline can incur in relation to a missing, lost or damaged baggage claim was initially set at 1,000 SDP per passenger by Article 22(2) of the Montreal Convention. However, following a number of reviews of this limitation that occurred in line with the requirements of Article 24 of the Montreal Convention, this has been adjusted to a figure of 1,131 SDRs: approximately £1,040 per passenger.

This figure is subject to one further exception noted by Article 22(2) of the Montreal Convention. Where a passenger, when checking in their baggage, has made ‘a special declaration of interest’ in having the baggage returned to them upon the flight arriving at its destination (this often involves the passenger paying a small supplementary amount), the airline is liable for that declared sum.

The Baggage Provisions

Compared to the Warsaw Convention, the Montreal Convention is less restrictive with its definition of what constitutes baggage. Under Article 17(4) of the Montreal Convention, baggage is generally taken to include both ‘checked’ baggage (that which was checked-in and placed in the hold) and ‘unchecked’ baggage (that which was carried onto the flight by the passenger).

Crucially however, for claims for damaged, lost or delated luggage, the Montreal Convention applies the ‘checked’ and ‘unchecked’ distinction; while fault on the part of the airline need not be shown by the passenger in order to initiate a claim for ‘checked’ baggage, Article 17(4) of the Montreal Convention requires fault to be shown before a claim for ‘unchecked’ baggage can be made.

The extent to which this is an important development for passengers depends heavily on the interpretations of the Warsaw Convention that came from the courts of different jurisdictions. Indeed, while the decision by a US court in Schedlmayer v Trans International Airlines [1979] appeared to place little weight on the distinction for liability-calculating purposes, it was a crucial factor in an unreported (and bizarre) case before the German Federal Court of Justice (the Bundesgerichtshof) in 1979. Here, as Jennifer McKay documents, a claimant who sued the airline for his lost watch and glasses after the flight crew took them and placed them in bags in the toilet in preparation for an emergency landing was only allowed to sue up to the lower liability limits for ‘unchecked’ baggage rather than for the larger amount under the limits for ‘checked’ baggage.

How Are Passengers Protected?

The most important characteristic of the Montreal Convention is that it operates as a reimbursement scheme, rather than a compensatory scheme. This is an important distinction: it limits the amount for which the airline is liable to only that which the passenger has had to pay to prevent themselves incurring harm. In other words, the passenger is reimbursed for the expenses they incur when replacing the items in the baggage that they needed but were unable to access or use because of their loss, damage or delay, but not compensated by a payment for the time, discomfort and inconvenience that resulted because of the loss, damage, or delay.

Therefore, to engage the airlines’ liability to pay this reimbursement, a passenger must purchase a replacement for the item in their baggage and show that it was necessary for them to do so. This can lead to disputes as to whether the replacement item – which is likely to be of a different value to the original – satisfies the necessity requirement.

Another limitation on the protection relates to the extent to which the damage, delay or loss was caused by the airline itself. Indeed, under Article 17(4) of the Montreal Convention, an airline is liable if for checked baggage that is lost, delayed, damaged or destroyed, no matter whether it is at fault, so long as this did not occur due to an inherent defect in, or the poor quality of, the baggage. 

Crucially for passengers travelling long distances who are alternating between different airlines, Article 36(3) of the Montreal Convention holds that all the airlines to whom the passenger entrusts their baggage are joint and severally liable. Thus, a passenger may pursue a claim against just one airline as if they were liable for all the damage, delay or loss caused and it is up to all the airlines involved to sort out their respective proportions of liability and payment themselves.

The Tripartite Distinction

Crucially for the purposes of calculating an airline’s liability for missed, lost or damaged luggage claims, the Montreal Convention appears to draw a tripartite distinction between delayed baggage, damaged baggage and lost baggage.

Delayed Baggage

Article 17(3) of the Montreal Convention holds that, unless the airline has previously admitted that the baggage has been lost, ‘checked’ baggage will be considered lost if it has not been located twenty-one days after the date it was supposed to have arrived. It follows that the definition of delayed baggage is that which has not arrived at its intended destination before that twenty-one day deadline expires.

During that period, and – by virtue of Article 31 of the Montreal Convention – for the twenty-one days which follow, reimbursement claims can be made by passengers. There is not a set rule, as to how these are to be calculated; as a result, the approach tends to differ between airlines. Some airlines offer immediate one-off payments at a set amount to cover emergency purchases while others pay a set amount per day up to a maximum number of days. Ultimately though, the general principle is to cover essential, unavoidable expenditure resulting from the delay to delivery of the baggage.

However, Article 19 of the Montreal Convention offers airlines an avenue to escape such payments: they are not liable for any payments if it proves that it:

[T]ook all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

Damaged and Lost Baggage

By virtue of Article 17(3) of the Montreal Convention, lost baggage can be defined as ‘checked’ baggage not been found by the airline twenty-one days after the date it was supposed to have arrived. From this point onwards, the airline is liable not only for the expenses incurred by the passenger during the twenty-one day period (akin to a delay claim), but also for the value of the items contained within the lost baggage.

In this way, the airline takes on the role of an insurance company – for both lost and damaged baggage claims, it will ask passengers for a list of items in luggage (and potentially receipts for proof of purchase) before calculating an estimated value of reimbursement. Regrettably for passengers, there is little within the Montreal Convention that regulates this calculation and it is rare that the offered amount will match the amount claimed by the passenger; often, the payment will be reduced on account of deprecation of the value of the items.

For damaged baggage, Article 31 of the Montreal Convention requires passengers to make a complaint within seven days of receiving it.

Shortcomings of the Montreal Convention

The Montreal Convention was introduced with the intention, among other things, of achieving global uniformity as regards the rules governing the relationship between airlines and passengers. The extent to which it has been ratified shows this has also been partially successful, a conclusion enhanced when it is noted that the vast majority of states that could be considered major aviation hubs have done so.

Nonetheless, questions remain as to its effectiveness, particularly in regards to its implementation. For example, airlines have the seemingly unchecked freedom to deny meritorious claims from passengers for questionable reasons, such as lack of receipts for items in their lost or damaged baggage which they may have purchased many years before.

Other issues surrounding unnecessary paperwork that hinder the ease with which claims can be brought have been well-documented: airlines have been able to introduce layers of formalities that can deter some passengers from following through with a valid claim. Certainly, if the rights of passengers are to be effectively enforced, any reform should aim to reduce the time and effort required to bring a claim; but, whether this problem can be easily combated by lawmakers is doubtful.

Furthermore, in cases of delayed baggage claims, there is a risk that the defence in Article 19 of the Montreal Convention may not be enforced in a way that is sufficiently strict. Indeed, what constitutes ‘all measures that could reasonably be required’ or what constitutes an event which rendered it ‘impossible’ for an airline to avoid the delay is not defined by the legislation and is potentially open to exploitation, particularly if interpreted in a broad or lenient manner.

Indeed, US law shows how interpretations of Article 19 of the Montreal Convention that might be overly-generous to airlines could deny passengers with valid claims the reimbursement they are owed. In Verdesca v American Airlines ND Texas [2004], it was held that an airline need not do everything in its power to avoid delay, only what is reasonable. Following this, courts have found that airlines behaved reasonably in delay situations caused by mechanical failures – as in Helge Management v Delta Airlines [2012] – and weather disruptions – as in Cohen v. Delta Air Lines SDNY [2010].


The Montreal Convention was a welcome introduction for air passengers who, before its introduction, were dependent upon travel insurance. However, gaps in the protection still remain thanks to broad interpretations of vague terminology within the legislation’s provisions, the ability of airlines to manipulate the calculation procedures and the sheer amount of effort needed on the part of passengers (who invariably lack the legal knowledge or resources to pursue it with maximum vigour) to successfully pursue a claim. More must be done, in terms of providing support – financial, educational and legal – to passengers seeking to make claims. After all, the effective enforcement of passengers’ rights benefits not only the individual passengers themselves, but the air carriage community as a whole on the grounds that this compels airlines to behave to a higher standard.

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Tagged: Consumer Rights, International Law, Regulators

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