Decision No. 99-C-A-2011

March 31, 2011

March 31, 2011

COMPLAINT by Vladimir Kouznetchik against American Airlines, Inc.

File No. M4120-3/10-02634

INTRODUCTION

[1] On December 10, 2007, Mr. Kouznetchik's American Airlines, Inc. (American Airlines) flight from Toronto, Ontario, Canada to Chicago, Illinois, United States of America was delayed. The delivery of his baggage was delayed after the same carrier's flight from Chicago to Toronto on December 29, 2007. Mr. Kouznetchik subsequently filed a claim with American Airlines requesting compensation in the amount of US$200 for the flight delay and US$950 for the baggage delay. In reply, the carrier disclaimed all liability, advising that "all expenses must be authorized by American Airlines in advance of any purchases to be eligible for reimbursement" and that "expenses are not authorized during a baggage delay when the passenger is at his home residence."

PRELIMINARY MATTERS

[2] Mr. Kouznetchik's carriage by American Airlines involved round-trip travel between Toronto and Dublin, Ireland with a connection in Chicago. The tariff which applies to this matter is American Airlines' International Passenger Rules and Fares Tariff No. AA-1 (Tariff). In its answer to the complaint, American Airlines incorrectly refers to its tariff for carriage between Canada and the United States of America, Canadian General Rules Tariff No. CGR-1 (Tariff CGR-1), as the applicable tariff. The Agency will consider the complaint in the context of provisions which appear in the Tariff, and will also address certain corresponding provisions in Tariff CGR-1.

[3] In his reply to American Airlines' answer, Mr. Kouznetchik submits that the following provisions appearing in Tariff CGR-1 are unreasonable because they are inconsistent with the Convention for the Unification of Certain Rules for International Carriage by Air – Montreal, 28 May 1999 (Convention): Rules 230(A)(2), (7), (10), (12), (13), (16), (17), (18) and (19), and Rules 231(1), (3), (4), (5) and (6). The provisions in Rules 230(A)(16), (17) and (18) no longer appear in Tariff CGR-1, and there are no equivalent provisions in the Tariff. The provisions appearing in Rules 230(A)(2), (10) and (19), and Rules 231(1), (3), (5) and (6) were not cited by Mr. Kouznetchik in his initial complaint. The Agency will therefore not address in this Decision these provisions or the equivalent provisions in the Tariff. The Agency will consider the following provisions: Rules 55(C)(12) and (13), and Rules 55(D)(4) and (7) of the current Tariff, and their corresponding provisions in the current Tariff CGR-1, Rules 230(A)(14) and (15), and Rules 231(4) and (8).

ISSUES

  1. Do certain tariff provisions lack clarity, contrary to paragraph 122(c) of the Air Transportation Regulations, SOR/88-58, as amended (ATR)?
  2. Did American Airlines contravene subsection 110(4) of the ATR by failing to compensate Mr. Kouznetchik in accordance with the Tariff and the Convention for the aforementioned delays?
  3. Did American Airlines contravene subsection 110(4) of the ATR by requiring authorization prior to the purchase of items prompted by a flight delay?
  4. Did American Airlines contravene subsection 110(4) of the ATR by absolving itself from liability for baggage delay when passengers are at their residence?
  5. Are certain provisions of the Tariff relating to limits of liability inconsistent with the Convention, and therefore unjust and unreasonable, contrary to subsection 111(1) of the ATR?
  6. Did American Airlines fail to make its tariffs available for public inspection, contrary to section 116 of the ATR?
  7. Did American Airlines post its tariffs on its Web site, as required by section 116.1 of the ATR?
  8. Should other remedies requested by Mr. Kouznetchik relating to American Airlines' treatment of other baggage claims, the training of carrier personnel, and the information conveyed by American Airlines respecting its baggage liability be granted?
  9. Should American Airlines and Mr. Kouznetchik's respective requests to be awarded costs be granted, pursuant to section 25.1 of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA)?

[4] As indicated in the reasons that follow, the Agency finds that:

  • Mr. Kouznetchik has not specifically identified the terms and conditions respecting liability which are not clearly stated in the tariffs, thereby preventing the Agency from addressing this particular matter.
  • Although American Airlines did not compensate Mr. Kouznetchik in accordance with the Tariff and the Convention for the delay of his flight and of the delivery of his baggage, it has not contravened subsection 110(4) of the ATR, in light of the circumstances of this case.
  • American Airlines has contravened subsection 110(4) of the ATR by requiring authorization prior to the purchase of items prompted by a delay in the delivery of baggage.
  • American Airlines has contravened subsection 110(4) of the ATR by absolving itself from liability for delay in delivery of baggage when passengers are at their residence.
  • Certain of the provisions at issue appearing in the Tariff and Tariff CGR-1 are unjust and unreasonable as they are inconsistent with the Convention.
  • American Airlines did not fail to make its tariffs available for public inspection.
  • The Agency is unable to make a determination respecting the absence of a tariff on American Airlines' Web site at the time of the incidents; however, American Airlines is currently in compliance.
  • The other remedies requested by Mr. Kouznetchik should be denied, with the exception of his requested remedy regarding the training of carrier personnel.
  • Special or exceptional circumstances do not exist respecting the present matter to warrant awarding of costs to either American Airlines or Mr. Kouznetchik.

RELEVANT CONVENTION, TARIFF AND STATUTORY EXTRACTS

[5] The extracts relevant to this Decision are set out in the Appendix.

SUBMISSIONS

Mr. Kouznetchik's submissions

[6] Mr. Kouznetchik alleges that American Airlines has failed to clearly set out in its tariff the carrier's policy governing limits of liability and procedures to be followed for filing of claims and the associated time limitations.

[7] Mr. Kouznetchik alleges that American Airlines has failed to properly apply the terms and conditions of carriage appearing in the tariff respecting the carrier's liability for damages occasioned by the delay in the carriage by air of passengers and baggage.

[8] In support of his claim for compensation respecting the delay of his flight from Toronto to Chicago, a point from which he was connecting to a flight to Dublin, Mr. Kouznetchik advises that the delay prevented him from meeting a business associate in Chicago. He indicates that, because of the delay, he was required to make several long distance telephone calls from his subsequent destination in Thailand, at a cost of 180 GBP (which he equates to US$356.83). Mr. Kouznetchik advises that the original claim for this amount was filed with American Airlines.

[9] With respect to the delay in the delivery of his baggage, Mr. Kouznetchik advises that he immediately filed a Property Irregularity Report with American Airlines at the Toronto-Lester B. Pearson International Airport (Toronto airport). He submits that his baggage contained a laptop computer, the use of which he required immediately on arrival at his residence, and that given this requirement, he purchased a replacement laptop computer for CAD$943.68 (which he equates to US$950). Mr. Kouznetchik indicates that American Airlines did not request proof of his purchase, and that this failure has prejudiced his ability to provide supporting documentation.

[10] Mr. Kouznetchik asserts that the following actions by American Airlines represent contraventions of the Convention:

  • requiring authorization prior to the purchase of items prompted by the delay to qualify for reimbursement;
  • absolving itself from liability for baggage delay when passengers are at their residence;
  • reducing the time limit for the filing of claims for loss or delay of baggage; and
  • disclaiming liability for certain items contained in baggage.

[11] According to Mr. Kouznetchik, American Airlines maintains that it has absolutely no liability for any damages arising from delay, except for "authorized" purchases. Mr. Kouznetchik filed a letter addressed to him from American Airlines dated January 29, 2008 in which the carrier advises that "all expenses must be authorized by American Airlines in advance of any purchases to be eligible for reimbursement."

[12] Mr. Kouznetchik provided an extract from American Airlines' Web site, which includes the following statement: "Consequential expenses authorized in advance of purchase by an American Airlines/American Eagle representative can be reimbursed with dated, itemized, original receipts within 30 days at any of our airport or city ticket office locations."

[13] With regard to American Airlines' absolving itself from liability when passengers are at their residence, Mr. Kouznetchik refers to the aforementioned carrier letter in which American Airlines states that "consequential expenses are not authorized during a baggage delay when the passenger is at his home residence."

[14] Mr. Kouznetchik asserts that American Airlines refused to provide him with a copy of its tariffs, despite his request to three different American Airlines' employees. He adds that the carrier has not displayed its terms and conditions of international carriage on its Web site, contrary to the ATR.

[15] Mr. Kouznetchik submits that the American Airlines agents with whom he interacted indicated that they were not familiar with the relevant provisions of the Convention.

[16] Mr. Kouznetchik requests the following remedies:

  • a ruling that, with respect to this particular matter, American Airlines failed to properly apply its tariffs, and a direction to the carrier to properly apply its tariffs;
  • a ruling establishing American Airlines' liability, in principle, for the types of damages claimed;
  • orders directing American Airlines to:
  • pay the damages which he originally claimed;
  • revise its tariffs, Web site and policies and procedures to ensure that they accurately reflect the provisions of the Convention respecting baggage and passenger liability;
  • reconsider its responses to any other passengers whose claims may have been denied because American Airlines' policies were inconsistent with the carrier's tariffs and/or the Convention;
  • clearly set out in its tariffs the terms and conditions relating to liability and filing of claims;
  • publish its tariffs on its Web site, and take all reasonable measures to ensure that requests for tariffs are fulfilled in good faith and in accordance with the regulatory requirements;
  • train staff involved in baggage services and customer relations regarding liability issues; and
  • correct false, misleading and/or incomplete information appearing on its Web site concerning baggage liability.
  • a ruling that he be awarded costs relating to the present proceeding.

American Airlines' answer

[17] American Airlines argues that Mr. Kouznetchik's complaint should be dismissed, with costs, for the following reasons:

  • the damages sustained are of a special/consequential nature and Mr. Kouznetchik has failed to demonstrate that he suffered compensable damages;
  • American Airlines complied with the terms of its tariffs; and
  • American Airlines complied with the Convention and all applicable regulations.

[18] American Airlines submits that Mr. Kouznetchik has never provided it with evidence of his business meeting or any damages he may have suffered as a result of the flight delay on December 10, 2007.

[19] With respect to the baggage delay, American Airlines advises that it delivered Mr. Kouznetchik's baggage less than 24 hours after he arrived in Toronto, and that he did not indicate to the carrier that the baggage contained a laptop computer or that he suffered damages because of the delay. American Airlines submits that Mr. Kouznetchik never filed evidence to substantiate his claim, nor did he explain why he chose to purchase a new laptop computer rather than use an alternate computer.

[20] American Airlines maintains that because it delivered Mr. Kouznetchik's baggage within 24 hours of his arrival in Toronto, it has not contravened Article 17 of the Convention, which provides, in part, that "if the checked baggage has not arrived at the expiration of twenty-one days after the date on which it ought to have arrived, the passenger is entitled to enforce against the carrier the rights which flow from the contract of carriage." American Airlines also argues that Mr. Kouznetchik failed to file any actual evidence to support his claim for compensation "in the form provided by the carrier [...] no later than thirty (30) days after the initial report was presented and recorded by carrier personnel" pursuant to subsection 5 of Tariff Rule 230 and subsection 5 of Tariff Rule 231.

[21] American Airlines submits that the remainder of Mr. Kouznetchik's claims relate to the content of the tariffs, and that if the Agency were to determine that the tariffs are deficient, the Agency should contact American Airlines to resolve any issues.

Mr. Kouznetchik's reply

[22] Mr. Kouznetchik indicates that he is unable to provide specific evidence of the expenses he incurred making telephone calls because he used a prepaid mobile service. He advises that he filed with American Airlines a copy of the mobile service's tariff when he submitted his complaint to the carrier in September 2007. Mr. Kouznetchik adds that he purchased the laptop computer because an alternate computer could not be used for security reasons, and that he mitigated the damages suffered because such damages would have been higher had he waited for the delivery of his baggage.

[23] Mr. Kouznetchik maintains that American Airlines' submission respecting the carrier's compliance with the Convention and the ATR is misguided. With reference to the carrier's assertion that it has complied with Article 17 of the Convention, Mr. Kouznetchik submits that this Article is not relevant to the present matter given that Article 17 simply allows a passenger to invoke the Convention should a carrier fail to deliver baggage within 21 days of the date on which the baggage ought to have arrived. Mr. Kouznetchik argues that American Airlines' attempts to impose various limits and conditions with regard to its liability are contrary to Article 26 of the Convention, which provides, in part, that "[a]ny provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention shall be null and void."

ANALYSIS AND FINDINGS

1) Do certain tariff provisions lack clarity, contrary to paragraph 122(c) of the ATR?

[24] Mr. Kouznetchik alleges that the tariff fails to clearly state American Airlines' policy governing limits of liability respecting passengers and goods, and that the carrier has therefore contravened subparagraph 122(c)(x) of the ATR. He further alleges that the tariff is unclear respecting the procedures to be followed regarding claims, and the associated time limitations, and that American Airlines has therefore contravened subparagraph 122(c)(xii) of the ATR.

[25] The Agency finds that Mr. Kouznetchik has failed to specifically identify the terms and conditions relating to limits of liability, procedures respecting filing of claims, and the time limitations for such claims which he believes are not clearly stated in American Airlines' tariff. Given this failure, the Agency is unable to address this particular matter.

2) Did American Airlines contravene subsection 110(4) of the ATR by failing to compensate Mr. Kouznetchik in accordance with the Tariff and the Convention?

[26] The relevant Tariff that was in effect on the dates of Mr. Kouznetchik's travel incorporates the Convention by reference. Articles 19 and 22 of the Convention apply to this matter.

Claim for damages arising from a missed meeting

[27] Mr. Kouznetchik maintains that because of the delay in his flight from Toronto, he was unable to meet with a business associate in Chicago on December 10, 2007, requiring him to make several long distance telephone calls from his subsequent destination in Thailand. The itinerary provided by Mr. Kouznetchik shows that he travelled from Toronto to Chicago to Dublin on December 10, 2007.

[28] The delay at issue relates to Mr. Kouznetchik's flight to Chicago, which was not the ticketed destination but rather the location of his onward connecting flight to Dublin. It is not alleged that the reduced connection time affected his subsequent travel to Dublin in any way. Mr. Kouznetchik claims that he planned a meeting in Chicago during the 1 hour 55 minute connection and that it took two hours to resolve his business on the telephone. Given the normal expectations of time to disembark and change aircraft at a large hub airport and the potential for short delays inherent in air travel, the Agency does not find this claim to be reasonable in the circumstances. A delay under Article 19 of the Convention generally relates to arrival at the ticketed destination, whether it is the outbound destination or final destination. Mr. Kouznetchik did not complain about a delay in Dublin. While there may be exceptional circumstances in which a passenger has a reasonable expectation of being able to use the time between flights for meetings, the facts in this case do not support this claim.

[29] Therefore, the Agency finds that American Airlines did not contravene subsection 110(4) of the ATR, and dismisses Mr. Kouznetchik's claim.

Claim for damages relating to delay of baggage

[30] Mr. Kouznetchik submits that he immediately filed a Property Irregularity Report with American Airlines at the Toronto airport on December 29, 2007 regarding the delay in the delivery of his baggage, that he sent a letter to the carrier dated January 2, 2008 in which he set out the amount claimed in compensation, and that American Airlines rejected his claim by letter dated January 29, 2008.

[31] The Agency finds that American Airlines contravened subsection 110(4) of the ATR by failing to provide Mr. Kouznetchik with the opportunity, within the 45-day period provided for under Rule 55(D)(4) following his initial report relating to the delay in delivery of his baggage, to submit his written claim for compensation in the form provided by American Airlines.

[32] American Airlines advises that Mr. Kouznetchik did not indicate that the baggage contained a laptop computer and never filed evidence to substantiate his claim. The Agency notes that Mr. Kouznetchik's letter dated January 2, 2008 to American Airlines does not provide any details of the loss incurred, other than citing a Property Irregularity Report file number and making a blanket claim for "damages occasioned by delay in the carriage by air of baggage in the total amount of $950 USD."

[33] Mr. Kouznetchik brought to the Agency's attention that American Airlines made no request for evidence regarding the laptop, choosing instead to disclaim all liability for any damages due to the delay. He alleges that, by doing so, American Airlines had prejudiced his ability to provide supporting documentation. Considering the dollar value claimed, and the possibility of bringing a dispute before the Agency, normal prudence would suggest that Mr. Kouznetchik keep any and all records relating to the purchase, notwithstanding American Airlines' rejection of the claim.

[34] Rule 55(C)(5) of the Tariff provides, in part, that all claims related to baggage liability are subject to proof of amount of loss. In Decision No. 308-C-A-2010, MacGillivray v. Cubana, respecting a delay in delivery of baggage, the Agency stated that to prove a fact, a party must present the best evidence available in light of the nature and circumstances of the case. Furthermore, the Agency noted that Article 22(2) of the Convention does not require proof of loss in the form of receipts of purchase. Obviously, a claim is buttressed by production of such evidence; however, it is not mandatory under the Convention because it is impractical, in many circumstances, for a passenger to provide original receipts for all losses.

[35] According to the Convention and the Tariff, Mr. Kouznetchik must prove that American Airlines is liable for the damage he incurred. Mr. Kouznetchik asserts that because of an immediate need and for security reasons, he had to purchase a new laptop computer. The Agency finds no compelling evidence on file to substantiate the need for Mr. Kouznetchik to purchase a computer valued at US$950. Moreover, Mr. Kouznetchik has failed to provide any proof of the expense he is claiming. As stated above, a party must present the best evidence available; Mr. Kouznetchik has presented no evidence beyond a general assertion.

[36] It is Mr. Kouznetchik's responsibility to bring forward the information he relies on to make his case. Based on the evidence available to the Agency, it appears that Mr. Kouznetchik did not use reasonable diligence in documenting the details of his claim and that he was not timely in providing details of his claim to American Airlines. Accordingly, Mr. Kouznetchik has not proven that the carrier prejudiced in any way his ability to provide supporting information.

[37] Therefore, the Agency finds that, in this matter, American Airlines did not contravene subsection 110(4) of the ATR, and dismisses this claim.

3) Did American Airlines contravene subsection 110(4) of the ATR by requiring authorization prior to the purchase of items prompted by a flight delay?

[38] The evidence filed by Mr. Kouznetchik relating to this matter, which is uncontested by American Airlines, indicates that the carrier requires a claimant to obtain American Airlines' authorization before the claimant purchases items because of a delay in the delivery of baggage. In a letter dated January 29, 2008, American Airlines claimed pre-approval for expenditures as its policy. In fact, the Tariff that was in effect on the dates of the incidents does not require pre-approval. Therefore, the Agency finds that as American Airlines applied this term and condition, which does not appear in the Tariff, it contravened subsection 110(4) of the ATR.

4) Did American Airlines contravene subsection 110(4) of the ATR by absolving itself from liability for baggage delay when passengers are at their residence?

[39] The evidence filed by Mr. Kouznetchik, which is uncontested by American Airlines, indicates that the carrier absolves itself from liability for baggage delay when passengers are at their residence.

[40] The Tariff that was in effect on the dates of the incidents does not contain any provisions which exempt American Airlines from liability in this fashion. Therefore, the Agency finds that as American Airlines applied this term and condition, which does not appear in the Tariff, it contravened subsection 110(4) of the ATR.

5) Are certain provisions of the Tariff relating to limits of liability inconsistent with the Convention, and therefore unjust and unreasonable, contrary to subsection 111(1) of the ATR?

[41] The terms and conditions governing liability currently applied by American Airlines appear in Rule 55 of the current Tariff. The Agency notes that the same terms and conditions appear in Rule 230 of the current Tariff CGR-1.

[42] Mr. Kouznetchik asserts that American Airlines' attempts to impose various limits and conditions respecting the carrier's limit of liability are contrary to Article 26 of the Convention.

A. Exempting American Airlines from liability for certain property which is not acceptable for transportation

[43] Rule 55(C)(12) of the current Tariff, which applies to American Airlines for interline transportation where any other carrier is the originating carrier, exempts American Airlines from liability for the loss, damage, or delay in delivery of certain property which is not acceptable for transportation, with or without the knowledge of the carrier. The same provision appears in Rule 230(A)(14) of the current Tariff CGR-1.

[44] In considering the reasonableness of Rule 55(C)(12), there are three components to be considered, namely loss of, delay in the delivery of, and damage to, checked baggage.

[45] Article 17(2) of the Convention provides, in part, that a carrier is liable for damage for the loss of checked baggage if the loss took place during any period within which the checked baggage was in the charge of the carrier.

[46] In Decision No. 227-C-A-2008, McCabe v. Air Canada, the Agency considered Article 17(2) of the Convention and stated that "if a carrier accepts checked baggage for transportation and the checked baggage is under the care and control of the carrier, the carrier assumes liability for the baggage in the event of loss and damage, notwithstanding the carrier has not agreed to carry items." The Agency reached a similar determination in Decision No. 309-C-A-2010, Kipper v. WestJet, and Decision No. 208-C-A-2009, Lukács v. Air Canada.

[47] If American Airlines accepts checked baggage for transportation and the checked baggage is under its care and control, it cannot absolve itself from liability for the loss of certain property which is not acceptable for transportation, with or without its knowledge. The Agency finds that Rule 55(C)(12) as it relates to liability for loss of baggage is inconsistent with Article 17(2) of the Convention and is therefore unreasonable.

[48] Article 19 of the Convention provides, in part, that a carrier is liable for damage occasioned by delay in the carriage of baggage, except if the carrier proves that it took all reasonable measures to avoid the damage or that it was impossible to do so.

[49] Rule 55(C)(12) provides, in part, that American Airlines shall not be liable for the delay in the delivery of certain types of articles in checked baggage.

[50] In Decision No. 208-C-A-2009, Lukács v. Air Canada, the Agency considered the issue of delay in the context of Article 19 of the Convention, and stated that:

Mr. Lukács submits that whether baggage has an inherent defect, quality or vice is irrelevant to the matter of liability for delay in delivery, and that to avoid liability under Article 19 of the Convention, a carrier must demonstrate that it took all measures that could reasonably be required to avoid the delay.

The Agency accepts Mr. Lukács' submission and notes that Rule 55(C)(12) fails to correctly represent that Air Canada's limitation with respect to liability only arises when it proves that the carrier and its servants and agents took all measures that could reasonably be required to avoid damage occasioned by any delay or that it was impossible for the carrier or its servants to take such measures.

[51] The Agency is of the opinion that the principle reflected in Article 19 of the Convention that the liability of the carrier for damage occasioned by delay is not dependent on the contents of the baggage, is reasonable. The Agency finds, therefore, that Rule 55(C)(12), as it relates to liability for delay in delivery of certain types of articles in checked baggage, is unreasonable as it has the effect of relieving the carrier from liability for damages caused by delay regardless of the particular circumstances.

[52] With respect to the issue of damage to certain types of articles in checked baggage, Rule 55(C)(12) provides, in part, that American Airlines shall not be liable for such damage.

[53] In Decision No. 442-C-A-2009, Lukács v. Air Canada, the Agency ordered Air Canada to incorporate in its tariff wording that clearly sets out the limits of its liability and the causal connections required for it to exclude itself from liability.

[54] Decision No. 208-C-A-2009, Lukács v. Air Canada, supports the requirement of a causal link as the Agency determined in that case that "to exempt a carrier from liability for damage to baggage under Article 17(2) of the Convention, there must be a causal relationship between the damage and an inherent defect, quality or vice of the baggage."

[55] Rule 55(C)(12) is not formulated in a manner that establishes this relationship and is not consistent with Article 17(2) of the Convention. The Agency therefore finds that Rule 55(C)(12) as it relates to liability for damage to certain types of articles in checked baggage, is unreasonable.

[56] Essentially, when considering air carrier liability provisions excluding or limiting liability, the Agency has determined that if a carrier has "care and control", then it assumes liability for baggage in the event of loss and damage. The limitation of liability by the carrier requires a causal link between the damage or loss of baggage and its inherent defect, quality or vice.

[57] However, Rule 55(C)(12) excludes American Airlines from all liability for loss, delay and damage for certain identified articles regardless of the circumstances without considering whether the damage was the result of the nature of the items or whether the delay took place in spite of the carrier having taken all reasonable measures required to avoid it.

B. Exempting American Airlines from liability relating to perishables and fragile articles

[58] Rule 55(C)(13) of the current Tariff applies when American Airlines is the originating carrier. It exempts the carrier from liability when the ordinary standard of care has been exercised, for delay in delivery of perishables, and damage to or damage caused by fragile articles which are not suitably packed in checked baggage, with or without the knowledge of American Airlines. The same provision appears in Rule 230(A)(15) of the current Tariff CGR-1.

[59] Article 19 of the Convention provides, in part, that a carrier is liable for damage occasioned by delay in the carriage of baggage, except if the carrier proves that it took all reasonable measures to avoid the damage or that it was impossible to do so. Rule 55(C)(13) provides for a standard of care which is more restrictive than the reasonable measures referred to in Article 19 of the Convention. Therefore, the Agency finds that Rule 55(C)(13) as it relates to the exception in the Convention, is unreasonable.

C. Reducing the time limit for filing of claims for loss or delay of baggage

[60] The Agency finds that the following provisions in the current Tariff are contrary to Article 31(2) of the Convention as these provisions tend to relieve the carrier of liability or fix a lower limit than that which is laid out in the Convention: Rules 55(D) (4) and (7). The Agency notes that the provisions in Tariff CGR-1 which were in effect on the dates of the incidents are largely similar to the current Tariff, the principal difference being that the current Tariff includes a provision respecting items missing from baggage.

Rule 55(D)(4) – Delay

[61] Article 31(2) of the Convention clearly states that in the case of delay, a complaint must be made to the carrier within 21 days from the date the baggage was put at the passenger's disposal. The Tariff requires that a passenger make an initial report to the carrier before departing the airport or within 4 hours after landing. This requirement is far shorter than the 21-day time limit set out in the Convention. Accordingly, the Agency finds that this provision, as it relates to delay, is unreasonable, and is therefore contrary to subsection 111(1) of the ATR.

Rule 55(D)(4) – Loss

[62] The 4-hour time limit to complain of lost baggage is very strict compared to the limits applicable to complaints for delay and damage under the Convention. The Agency is of the opinion that this tends to limit the carrier's liability, especially as the Tariff revokes the passenger's right to take legal action in the event of failure to respect this limit. Therefore, the Agency finds that the imposition of such a strict time limit is contrary to the Convention and is unreasonable under subsection 111(1) of the ATR.

Rule 55(D)(7)

[63] Article 31(4) of the Convention provides that if a passenger does not file a complaint within the times mentioned in the Article, no action will lie against the carrier, except in the case of fraud on the carrier's part. Rule 55(D)(7) relieves the carrier of any liability if the passenger fails to file a claim within the prescribed time limit, which in effect, limits the carrier's exposure to liability altogether, even in the case of fraud. This provision is therefore contrary to Article 31(4) and is unreasonable pursuant to subsection 111(1) of the ATR.

Article 17 of the Convention

[64] American Airlines maintains that because it delivered Mr. Kouznetchik's baggage within 24 hours of his arrival in Toronto, it has not contravened Article 17 of the Convention. As correctly pointed out by Mr. Kouznetchik, Article 17 is not relevant to the matter at hand as this Article simply establishes a date on which passengers can invoke their rights under the Convention with respect to loss of baggage. The Article does not set out a period during which a carrier is exempted from liability for delay in delivery of baggage. American Airlines' answer relies erroneously on Article 17 (damage and loss), while the complaint turns on Article 19 (delay).

6) Did American Airlines fail to make its tariffs available for public inspection, contrary to section 116 of the ATR?

[65] Mr. Kouznetchik asserts that he asked American Airlines to provide him with a copy of its tariffs, and that the carrier refused to do so. American Airlines did not address this matter in its answer.

[66] Subsection 116(1) of the ATR provides that every air carrier shall keep available for public inspection at each of its business offices a copy of every tariff in which the carrier participates that applies to its international service. Furthermore, section 116.1 of the ATR states that the terms and conditions or carriage must be displayed on the carrier's Web site.

[67] As American Airlines did not challenge Mr. Kouznetchik's assertion, the Agency finds that American Airlines did not provide a copy of its tariffs to Mr. Kouznetchik. However, the ATR does not impose a duty on carriers to send or provide copies of tariffs on request, but only that carriers keep copies at the carriers' places of business and make the tariffs available for inspection. The Agency finds that there is no evidence on file which indicates that American Airlines contravened subsection 116(1) of the ATR by failing to keep its tariffs available for public inspection.

7) Did American Airlines post its tariffs on its Web site, as required by section 116.1 of the ATR?

[68] Absent evidence presented by Mr. Kouznetchik, the Agency is unable to make a finding as to whether the tariffs were posted on the carrier's Web site on the dates of the incidents. The Agency notes that American Airlines currently posts its Tariff on its Web site.

8) Should other remedies requested by Mr. Kouznetchik relating to American Airlines' treatment of other baggage claims, the training of carrier personnel, and the information conveyed by American Airlines respecting its baggage liability be granted?

  • That American Airlines should reconsider its responses to any other passengers whose claims may have been denied because American Airlines' policies were inconsistent with the carrier's tariff and/or the Convention.

[69] There is no evidence before the Agency which would suggest that American Airlines failed to compensate other passengers in accordance with the carrier's tariff and the Convention. The Agency dismisses this allegation for lack of evidence.

  • That American Airlines should train staff involved in baggage services and customer relations regarding liability issues.

[70] Mr. Kouznetchik maintains that the American Airlines' agents with whom he dealt advised that they were not familiar with the Convention. American Airlines has not addressed this particular matter. As Mr. Kouznetchik's evidence on this matter has not been challenged by American Airlines, the Agency will address this request. American Airlines shall take the appropriate measures to inform relevant staff of the Convention and, in particular, the provisions concerning liability issues. American Airlines must inform the Agency within 60 days from the date of this Decision of the measures it will take to inform its staff of the Convention.

  • That American Airlines should correct false, misleading and/or incomplete information concerning baggage liability.

[71] As indicated above, the Tariff and Web site appear to provide accurate and complete information respecting the carrier's liability under the Convention, and further action is therefore not required respecting this matter.

9) Should American Airlines and Mr. Kouznetchik's respective requests to be awarded costs be granted?

[72] Pursuant to section 25.1 of the CTA, the Agency has discretion regarding the award or denial of costs, and each application is decided on its own merits. As a general rule, costs are not awarded and the Agency's practice has been to award these only in special or exceptional circumstances.

[73] In making its determination, the Agency considers a combination of factors such as the nature of the application, the length and complexity of the proceeding, whether the Agency held an oral hearing, whether parties have acted efficiently and in good faith or if a party has incurred extraordinary costs to prepare and defend its application.

[74] The Agency finds that special or exceptional circumstances do not exist in respect of the present proceeding to warrant awarding costs to either Mr. Kouznetchik or American Airlines.

American Airlines' submission that the Agency should contact the carrier to resolve any issues relating to American Airlines' tariff

[75] The tariff provisions about which Mr. Kouznetchik has complained have been revised in part since the filing of his complaint. These provisions, of which those relevant to the complaint are appended, reflect tariff language agreed to by Air Transport Association of America, Inc., and which language was approved by the Agency in Decision No. 161-A-2010 dated May 3, 2010.

[76] American Airlines argues that if the Agency were to find that the carrier's tariffs are deficient and/or contain provisions which need to be revised, the Agency should contact American Airlines to resolve any issues. The carrier further submits that the Agency has not of its own volition raised any of the issues broached by Mr. Kouznetchik.

[77] The Agency reminds American Airlines that any member of the public is at liberty to file a complaint with the Agency respecting any tariff-related matter. Mr. Kouznetchik has submitted a complaint alleging that American Airlines has contravened several provisions of the ATR. The Agency has jurisdiction to investigate this complaint and initiated pleadings respecting this matter through the Agency's formal adjudicative process. Under this process, American Airlines was provided with the opportunity to respond to Mr. Kouznetchik's allegations. In contrast, the process which led to the Agency's May 3, 2010 ruling related to an industry-wide revision of tariffs, which was an exception to the general approach in tariff matters.

CONCLUSION

[78] In light of the foregoing, the Agency:

(i) partly grants the complaint regarding the following matters:

  • with respect to limitations of liability being inconsistent with the Convention, the Agency notes that American has modified the Tariff and Tariff CGR-1 which are currently in effect; however, several provisions remain from previous versions of these tariffs that are inconsistent with the Convention, those being Rules 55(C)(12) and (13) and Rules 55(D)(4) and (7) of the Tariff, and Rules 230(A)(14) and (15), and Rules 231(4) and (8) of Tariff CGR-1. As such, these provisions are null and void pursuant to Article 26 of the Convention, and are therefore unjust and unreasonable, contrary to subsection 111(1) of the ATR;

Accordingly, the Agency disallows these tariff provisions pursuant to section 113 of the ATR. American Airlines is ordered to modify these provisions and related policies and information on its Web site to ensure that they are consistent with the Convention.

  • with respect to requiring a claimant to obtain the authorization of American Airlines before purchasing items because of a delay in the delivery of baggage, the Agency finds that American Airlines has contravened subsection 110(4) of the ATR. American Airlines is ordered to cease this practice;
  • with respect to absolving itself from liability for baggage delay when passengers are at their residence, the Agency finds that American Airlines has contravened subsection 110(4) of the ATR. American Airlines is ordered to cease this practice; and
  • with respect to informing American Airlines' staff of the provisions of the Convention concerning liability issues, American Airlines shall provide the Agency with a training proposal that will indicate how the carrier intends to communicate the relevant provisions of the Convention to appropriate employees. This training proposal shall be filed with the Agency within 60 days of the date of this Decision.

(ii) dismisses the following elements of the complaint:

  • that, contrary to subparagraphs 122(c)(x) and (xii) of the ATR, respectively, American Airlines' tariff does not clearly state the carrier's policy governing (i) limits of liability respecting passengers and goods, and (ii) the procedures to be followed regarding claims, and the associated time limitations;
  • that American Airlines has contravened subsection 110(4) of the ATR by not compensating Mr. Kouznetchik in accordance with the Tariff and the Convention for the delay of his flight and of the delivery of his baggage;
  • that American Airlines contravened subsection 116(1) of the ATR by failing to keep available the carrier's tariff for public inspection;
  • that American Airlines has failed to compensate other passengers in accordance with the tariff and the Convention.

(iii) as there are no special or exceptional circumstances, costs will not be awarded to either Mr. Kouznetchik or American Airlines.

Members

  • Raymon J. Kaduck
  • J. Mark MacKeigan

RELEVANT STATUTORY AND TARIFF EXTRACTS

Canada Transportation Act, S.C., 1996, c. 10, as amended

Section 25.1

  1. Subject to subsections (2) to (4), the Agency has all the powers that the Federal Court has to award costs in any proceeding before it.
  2. Costs may be fixed in any case at a sum certain or may be taxed.
  3. The Agency may direct by whom and to whom costs are to be paid and by whom they are to be taxed and allowed.
  4. The Agency may make rules specifying a scale under which costs are to be taxed.

Air Transportation Regulations, SOR/88-58, as amended

Subsection 110(4)

Where a tariff is filed containing the date of publication and the effective date and is consistent with these Regulations and any orders of the Agency, the tolls and terms and conditions of carriage in the tariff shall, unless they are rejected, disallowed or suspended by the Agency or unless they are replaced by a new tariff, take effect on the date stated in the tariff, and the air carrier shall on and after that date charge the tolls and apply the terms and conditions of carriage specified in the tariff.

Subsection 111(1)

All tolls and terms and conditions of carriage, including free and reduced rate transportation, that are established by an air carrier shall be just and reasonable and shall, under substantially similar circumstances and conditions and with respect to all traffic of the same description, be applied equally to all that traffic.

Paragraph 113(a)

The Agency may suspend any tariff or portion of a tariff that appears not to conform with subsection 110(3) to (5) or section 111 or 112, or disallow any tariff or portion of a tariff that does not conform with any of those provisions.

Subsection 116(1)

Every air carrier shall keep available for public inspection at each of its business offices a copy of every tariff in which the air carrier participates that applies to its international service.

Section 116.1

An air carrier that sells or offers for sale an international service on its Internet site must also display on the site the terms and conditions of carriage applicable to that service and must post a notice to that effect in a prominent place on the site.

Subparagraph 122(c)(x)

Every tariff shall contain

[...]

(c) the terms and conditions of carriage, clearly stating the air carrier's policy in respect of at least the following matters, namely,

[...]

(x) limits of liability respecting passengers and goods.

[...]

The Montreal Convention

Article 17 – Death and injury of passengers - damage to baggage

  1. The carrier is liable for damage sustained in case of death or bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
  2. The carrier is liable for damage sustained in case of destruction or loss of, or of damage to, checked baggage upon condition only that the event which caused the destruction, loss or damage took place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier. However, the carrier is not liable if and to the extent that the damage resulted from the inherent defect, quality or vice of the baggage. In the case of unchecked baggage, including personal items, the carrier is liable if the damage resulted from its fault or that of its servants or agents.
  3. If the carrier admits the loss of the checked baggage, or if the checked baggage has not arrived at the expiration of twenty-one days after the date on which it ought to have arrived, the passenger is entitled to enforce against the carrier the rights which flow from the contract of carriage.
  4. Unless otherwise specified, in this Convention the term "baggage" means both checked baggage and unchecked baggage.

Article 19 – Delay

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

Article 22 – Limits of liability in relation to delay, baggage and cargo

1. In the case of damage caused by delay as specified in Article 19 in the carriage of persons, the liability of the carrier for each passenger is limited to 4,150 Special Drawing Rights.

2. In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1,000 Special Drawing Rights for each passenger unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the passenger's actual interest in delivery at destination.

[...]

5. The foregoing provisions of paragraphs 1 and 2 of this Article shall not apply if it is proved that the damage resulted from an act or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided that, in the case of such act or omission of a servant or agent, it is also proved that such servant or agent was acting within the scope of its employment.

6. The limits prescribed in Article 21 and in this Article shall not prevent the court from awarding, in accordance with its own law, in addition, the whole or part of the court costs and of the other expenses of the litigation incurred by the plaintiff, including interest. The foregoing provision shall not apply if the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later.

Article 26 – Invalidity of contractual provisions

Any provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention shall be null and void, but the nullity of any such provision does not involve the nullity of the whole contract, which shall remain subject to the provisions of this Convention.

Article 27 – Freedom to contract

Nothing contained in this Convention shall prevent the carrier from refusing to enter into any contract of carriage, from waiving any defences available under the Convention, or from laying down conditions which do not conflict with the provisions of this Convention.

Article 31 – Timely notice of complaints

  1. Receipt by the person entitled to delivery of checked baggage or cargo without complaint is prima facie evidence that the same has been delivered in good condition and in accordance with the document of carriage or with the record preserved by the other means referred to in paragraph 2 of Article 3 and paragraph 2 of Article 4.
  2. In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of checked baggage and fourteen days from the date of receipt in the case of cargo. In the case of delay, the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his or her disposal.
  3. Every complaint must be made in writing and given or dispatched within the times aforesaid.
  4. If no complaint is made within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on its part.

International Passenger Rules and Fares Tariff No. AA-1

In effect on the dates of the incidents

Rule 55

(C) LIMITATION OF LIABILITY

[...]

(5) As to the applicable Convention, in the event that a higher value is declared in advance and additional charges are paid pursuant to carrier's regulations, the liability of the carrier shall be limited to such higher declared value. In no case shall the carrier's liability exceed the actual loss suffered by the passenger. All claims are subject to proof of amount of loss. AA shall not be liable for loss of revenue, time consequential or special damages, or other intangible expenses resulting from the loss, delay or damage to checked or unchecked baggage or other property.

[...]

14. (Applicable to AA only for interline transportation where any other carrier is the originating carrier) Carrier shall not be liable for loss, damage or delay in the delivery of any property which is not acceptable for transportation in accordance with Rules 97 (ACCEPTANCE OF BAGGAGE), 100 (CONDITIONS AND CHARGES FOR ACCEPTANCE OF SPECIAL ITEMS), and 105 (ACCEPTANCE OF PETS AND ANIMALS) or any other loss or damage of whatever nature resulting from any such loss or damage or from the transportation of such property. This exclusion is applicable whether the non-acceptable property is included in the passenger's checked baggage with or without the knowledge of the carrier.

15. (Applicable only when AA is the originating carrier) When carrier has exercised the ordinary standard of care, it shall not be liable for delay in delivery of any perishables, nor for damage to, or damage caused by, fragile articles which are unsuitably packed and which are included in a passenger's checked baggage with or without carrier's knowledge.

(D) TIME LIMITATIONS ON CLAIMS AND ACTIONS

  1. No action shall lie in the case of damage to baggage unless the person entitled to delivery files an initial report with carrier prior to leaving the arrival airport, or at the latest, within seven (7) days from the date of receipt of baggage.
  2. Upon carrier's agreement to accept a damage claim, the damage acknowledgement form provided by the carrier, and the damaged property, must be presented to the carrier for repair within thirty (30) days from the date the damage acknowledgement form is furnished by the carrier to the passenger.
  3. In the case of delay, or loss, an initial report must be presented to the carrier prior to leaving the arrival airport for which the baggage was checked or should have been checked. At the latest, such initial report must be made within four (4) hours of the arrival of the flight on which the passenger traveled.
  4. Additionally, if compensation is sought for delay or loss, a written claim, in the form provided by the carrier, must be received by carrier no later than forty five (45) days after the initial report was presented and recorded by carrier personnel.
  5. Legal action premised on or related to damage, delay or loss must be commenced within two (2) years of the date of the incident. If the initial report and, when applicable, written claim form, are not provided within the time limitations set forth above and legal action is not commenced within two (2) years of the date of the incident, then carrier disclaims any and all liability arising from or relating to such incident.
  6. Failure to report a claim for a delayed or damaged bag within the prescribed time limit releases the carrier from any liability.

Currently in effect

Rule 55

(C) LIMITATION OF LIABILITY

[...]

(3) The Carrier shall be liable for damage occasioned by delay in the carriage of passengers by air, as provided in the following paragraphs:

  1. The Carrier shall not be liable if it proves that it and its Servants and Agents took all measures that could reasonably be required to avoid the damage, or that it was impossible for it or them to take such measures.
  2. Airport, Air Traffic Control, Security, and other facilities or personnel, whether public or private, not under the control and direction of the carrier are not servants or agents of the carrier, and the carrier is not liable to the extent the delay is caused by these kinds of facilities or personnel.
  3. Damages occasioned by delay are subject to the terms, limitations and defenses set forth in the Warsaw Convention and Montreal Convention, whichever may apply. They include foreseeable compensatory damages sustained by a passenger and do not include mental injury damages.
  4. The Carrier reserves all defences and limitations available under the Warsaw Convention or the Montreal Convention, whichever may apply to claims for damage occasioned by delay, including, but not limited to, the exoneration defense of article 21 of the Warsaw Convention and article 20 of the Montreal Convention. Under the Montreal Convention, the liability of the carrier for damage caused by delay is limited to 4,694 SDR per passenger. The limits of liability shall not apply in cases described in article 25 of the Warsaw Convention or article 22(5) of the Montreal Convention, whichever may apply.

(4) The Carrier is liable for damages sustained in the case of destruction or loss of, damage to, or delay of checked and unchecked baggage, as provided in the following paragraphs:

  1. Except as provided below, the liability of the carrier is limited to 1,131 Special Drawing Rights for each passenger in the case of destruction, loss, damage, or delay of baggage, whether checked or unchecked, under the Warsaw Convention or the Montreal Convention, whichever may apply. Unless the passenger proves otherwise:
    1. All baggage checked by a passenger shall be considered to be the property of the passenger;
    2. A particular piece of baggage, checked or unchecked, shall not be considered to be the property of more than one passenger; and
    3. Unchecked baggage, including personal items, shall be considered to be the property of the passenger in possession of the baggage at the time of embarkation.
  2. If a passenger makes, at the time checked baggage is handed to the carrier, a Special Declaration of interest and has paid a supplementary sum, if applicable, the carrier will be liable for destruction, loss, damage, or delay of such checked baggage in an amount not exceeding the declared amount, unless the carrier proves that the declared amount is greater than the passenger's actual interest in delivery at destination. The declared amount, and the carrier's liability, shall not exceed the total amount of declaration permissible under the carrier's regulations, inclusive of the limitation of paragraphs (D)(1) hereof. In the case of transportation under the Warsaw Convention, no supplementary sum shall apply unless the declared amount exceeds 19 Special Drawing Rights per kilogram of the total recorded weight of the checked baggage at the time the baggage is handed to the carrier. Nevertheless, the carrier may impose charges for pieces of baggage in excess of any free allowance the carrier may provide.
  3. In the case of unchecked baggage, the carrier is liable only to the extent the damage resulted from its fault, or that of its servants or agents.
  4. The carrier is not liable for destruction, loss, damage, or delay of baggage not in the charge of the carrier, including baggage undergoing security inspections or measures not under the control and direction of the carrier.
  5. The carrier reserves all defences and limitations available under the Warsaw Convention and the Montreal Convention, whichever may apply to such claims including, but not limited to, the defense of article 20 of the Warsaw Convention and article 19 of the Montreal Convention, and the exoneration defense of article 21 of the Warsaw Convention and article 20 of the Montreal Convention, except that the carrier shall not invoke article 22(2) and (3) of the Warsaw Convention in a manner inconsistent with paragraph (1) hereof. The limits of liability shall not apply in cases described in article 25 of the Warsaw Convention or article 22(5) of the Montreal Convention, whichever may apply.

[...]

12. (Applicable to AA only for interline transportation where any other carrier is the originating carrier) Carrier shall not be liable for loss, damage or delay in delivery of any property which is not acceptable for transportation in accordance with Rules 97 (ACCEPTANCE OF BAGGAGE), 100 (CONDITIONS AND CHARGES FOR ACCEPTANCE OF SPECIAL ITEMS), and 105 (ACCEPTANCE OF PETS AND ANIMALS) or for any other loss or damage of whatever nature resulting from any such loss or damage or from the transportation of such property. This exclusion is applicable whether the non-acceptable property is included in the passenger's checked baggage with or without the knowledge of the carrier.

13. (Applicable only when AA is the originating carrier) When carrier has exercised the ordinary standard of care, it shall not be liable for delay in delivery of any perishables, nor for damage to, or damage caused by, fragile articles which are unsuitably packed and which are included in a passenger's checked baggage with or without carrier's knowledge.

(D) TIME LIMITATIONS ON CLAIMS AND ACTIONS

  1. Items missing from checked baggage must be reported to American before leaving the airport or within 24 hours of the receipt of the bag.
  2. No action shall lie in the case of damage to baggage unless the person entitled to delivery files an initial report with carrier prior to leaving the arrival airport, or at the latest, within seven (7) days from the date of receipt of baggage.
  3. Upon carrier's agreement to accept a damage claim, the damage acknowledgement form provided by the carrier, and the damaged property, must be presented to the carrier for repair within thirty (30) days from the date the damage acknowledgement form is furnished by the carrier to the passenger.
  4. In the case of delay, or loss, an initial report must be presented to the carrier prior to leaving the arrival airport for which the baggage was checked or should have been checked. At the latest, such initial report must be made within four (4) hours of the arrival of the flight on which the passenger traveled.
  5. Additionally, if compensation is sought for delay or loss, a written claim, in the form provided by the carrier, must be received by carrier no later than thirty (30) days after the initial report was presented and recorded by carrier personnel.
  6. Legal action premised on or related to damage, delay or loss must be commenced within two (2) years of the date of the incident. If the initial report and, when applicable, written claim form, are not provided within the time limitations set forth above and legal action is not commenced within two (2) years of the date of the incident, then carrier disclaims any and all liability arising from or relating to such incident.
  7. Failure to report a claim for a delayed or damaged bag within the prescribed time limit releases the carrier from any liability.

Member(s)

Raymon J. Kaduck
J. Mark MacKeigan
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