In an article published by The Australian last week, IALPG’s Principal Joseph Wheeler writes about the multitude of legal problems Boeing may face in the aftermath of Ethiopian Airlines ET302 and Lion Air JT610.

A link to the original article published by The Australian is here.

A copy of the full text is below for information only.

Legal nightmare for Boeing over 737 MAX 8 crashes
12:00AM MARCH 22, 2019
There has been much early technical analysis and even earlier purported conclusions about the true causes of the recent tragedies of Ethiopian Airlines ET 302 and Lion Air JT 610.

Whether or not the accidents can be conclusively connected by the failure of a system or systems partially designed to make the 737 MAX as “familiar” to pilots as the 737-800 series ­remains to be seen.

But before ­official conclusions are published, it is already abundantly clear that Boeing’s design and actions are under the insurer, regulatory and legal spotlight after the Federal Aviation Administration Emergency Directive of March 13, 2019, and similar insinuations made by air safety regulators the world over, that more is needed from the aircraft manufacturer technically and practically to prevent similar accidents occurring.
The first concern for Boeing will be air carrier wrongful death compensation claims, arising from particularly the ET 302 accident, which are likely to be significant. The law involving the international flight dictates that a two-tier liability scheme under the Montreal Convention will be applicable to most if not all travellers onboard, many of whom were diplomats and professionals with dependants and families. This scheme is different to that mostly applicable to the JT 610 flight, which was a domestic operation.

This liability mechanism means that breadwinners whose families can prove future financial losses they will suffer, can be compensated to about $220,000 by Ethiopian Airlines without argument. More is available depending on individual circumstances.

Ethiopian Airlines may be ­criticised for potentially not alerting crews more explicitly to the possible risks in the 737 MAX’s systems.

But the real kicker here is that the airline and its insurers, which are liable to passengers for compensation under international law, will undoubtedly seek to ­recoup those losses from Boeing.

Yet Boeing is already under the spotlight from passengers’ families, just as it already faces product liability claims in the US from families affected by flight JT 610.

Boeing has historically been able to fend off such cases involving foreign claimants (and surprisingly sometimes even when involving US deceased in foreign air crashes).

Claimants favour US courts for a variety of reasons but are increasingly rebuffed when seeking justice following foreign air crashes. The US District Court for the District of Columbia recently held that 42 claimants seeking compensation against Boeing for the loss of flight MH370 were most “connected” to Malaysia and should be heard there rather than in the US.

If claims do remain in the US (which is possible for ET 302 given that the FAA and Boeing actions post JT 610 and ET 302 make such future claims against Boeing more “connected” to the US and its interests than many previous foreign air crashes) then the compensation payable may be exponentially higher than that which would be available in a similar situation in a non-US court.

Additionally, post ET 302, Boeing faces a new form of criticism linked to its actions as a delegate of the FAA in that it essentially seems to have conducted the bulk of its own regulatory oversight in certifying that the 737 MAX and its systems were compliant with FAA regulations. There are allegations that demand to meet certain commercial deadlines resulted in pressure on more and more aspects of the 737 MAX safety documentation to be reviewed by Boeing rather than FAA technical experts, who ultimately signed off on the mountain of paperwork.

If such allegations are made then the FAA will also be targeted by victims’ families, airlines and their insurers, notwithstanding the complex sovereign immunity legal issues that will arise. And who will the FAA then ­target? Yes, Boeing.

Moreover, foreign regulators like EASA in Europe and CASA in Australia who rely on the FAA’s type certification to locally sanction approval of new aircraft types to fly in their airspace, will likely think twice as regards future simple reliance on FAA certification. A shift in respect for the FAA’s approach could lead to more work needing to be done by air safety regulators worldwide to satisfy themselves of new aircraft safety.

It is this diversity of criticisms and claims that Boeing must now face, that will hopefully serve as a trigger to clean up some alleged systemic deficiencies in type certification processes and resourcing for the FAA, but also in the behaviour of all aircraft manufacturers to ensure they consider, in practice and not just on paper, that safety must trump commercial imperatives in civil aviation.

Joseph Wheeler is the founder and legal practice director of International Aerospace Law & Policy Group, a Brisbane law firm.