Transat settles Atlantic Glider lawsuit for $7.65 million

[rotornut]

GLOBEANDMAIL.COM

Air Transat agrees to settle lawsuit
By PAUL KORING

Wednesday, March 2, 2005
Updated at 7:28 AM EST

Air Transat has agreed to a settlement of $7.65-million to passengers aboard its Flight 236, which made an emergency landing in the Azores on Aug 24, 2001. The pilots had mistakenly pumped tonnes of fuel overboard and both engines quit, lawyers for passengers said yesterday.

The offer, subject to court approval, settles a class-action lawsuit against the Montreal-based charter airline by about 175 of the 291 passengers on board the flight from Toronto to Lisbon, an official said.

[MarkD]

That AT screwed up is not in dispute but why pay out? A massive fine should have been the consequence but the pax should not get any more compo than pax inconvenienced by an IFSD.

[Matty J]

Agreed Mark.

Why should the passengers be compensated for this event. Ok its not your normal IFSD but even so the aircraft landed and the passengers disembarked safely.

Whats the problem??

Regards.

Matt.:ok:

[c150driver]

It is not true that all passengers disembarked safely....some had broken bones and other medical issues.

Air Transat was clearly in the wrong (maintenance procedures, etc...) and are getting off easy with the meager payout.

[MarkD]

c150driver

the pax with injuries should get compo proportional to the injury suffered. Minor injury, minor money. Serious injury, lots of money. Walked off under own steam, same compo as an IFSD.

[Rananim]

Not a simple IFSD by any stretch of the imagination.Which planet do you come from?They're lucky to get away with only 8 million bucks.The maintenance error was criminal.

[MarkD]

Rananim

Failure of maintenance should be a Transport Canada matter and a huge fine levied. Don't get me wrong, AT should be hammered. But the pax should only be compensated to the level of their actual inconvenience or suffering.

[eight iron special]

It's called "Mental Anguish"

[Few Cloudy]

Too right - those guys weren't passengers - they were victims!

Now that`s where you should have been Flying Lawyer - a nice class action suit and off to retirement...

[innuendo]

Actually I believe that AT WAS fined by Transport and did they not lose their ETOPS for a while?

[Safety Guy]

Right on both counts, Innuendo. Personally, I don't think they're getting off light at all. That accident has cost AT plenty in other ways, due in no small part to the stringent demands that TC placed on them. From what I've seen and heard, they are a much safer organization today. They've turned a negative into a positive in many ways. The systems they've put in place have afforded them an opportunity to control costs in some pretty innovative ways, while improving safety at the same time.

[Frangible]

The average pax is not as tough as you MarkD.
The engines stopped, lights went out, and 20 minutes of glide followed, all pax knew the engines were out, and the cabin was filled with people screaming and praying. I have seen several accounts of pax describing not so much mental anguish as sheer terror. All they could see below was sea until they were right over the field. Then came huge banks to lose height and a very rough landing.
Either way, some $40k plus per pax seems like a real let-off from Transat's point of view. And they did have to pay a fine to Transport Canada. Some CAN$ 250,000, if i recall right.

[Globaliser]

Rananim: Not a simple IFSD by any stretch of the imagination.Which planet do you come from?They're lucky to get away with only 8 million bucks.The maintenance error was criminal.Even if it was criminal, that doesn't mean they must therefore pay out big bucks in compensation.

Compensation should be just that, proportional to the injury suffered. Pure "mental anguish" and fear are not injuries and don't attract compensation. Criminal behaviour should be punished via the criminal law, not via the payment of compensation.

Certain countries have got their compensation laws all out of kilter for failing to follow these principles.

[innuendo]

"Even if it was criminal, that doesn't mean they must therefore pay out big bucks in compensation."

Another point of view might be that if you know that taking a shortcut on SOPs or maintainance procedures could, or will, cost you "Big Bucks" in compensation, then perhaps you might be inclined to consider doing the job properly in the first place.
While I am not a fan of frivoulous lawsuits, if the threat of being sued out of your socks keeps you on the straight and narrow then perhaps some liability for compensation has some merit.

[Globaliser]

innuendo: Another point of view might be that if you know that taking a shortcut on SOPs or maintainance procedures could, or will, cost you "Big Bucks" in compensation, then perhaps you might be inclined to consider doing the job properly in the first place.
While I am not a fan of frivoulous lawsuits, if the threat of being sued out of your socks keeps you on the straight and narrow then perhaps some liability for compensation has some merit.The problem with that is that it's the legal policy which has been adopted by a big country situated between Canada and Mexico. That policy has been one of the direct causes of the rampant "compensation culture" there, including the frivolous lawsuits.

If you make sure that compensation is only compensation, and that punishment for cutting corners or not doing the job you ought to be doing is exacted by other means, then you will have a chance of reducing that effect while still preserving the deterrent effect.

[innuendo]

I think that much of the view of the USA being a hotbed of frivoulous lawsuits is, to an extent, based on the more lurid and outrageous suits that make the front pages of the sensationalist press. Certainly there seems to no shortage of amazing awards although just how many of those survive appeal would be interesting.
For a long time I regarded the propensity to sue as just opportunistic attempts at cash grabs more than than anything else and I am sure a lot still are, just as there are opportunistic lawyers looking for 15 minutes of fame and a chance at cash.

However in this day and age where so many deals are only honoured when you know you can't weasel out of it if you don't like it, or when people will shortcut SOP's or regulations to save a penny, the threat of being successfully sued if you don't behave by the rules can go a long way towards making you think twice. Sort of like another form of policeman looking over your shoulder.

[Globaliser]

innuendo: Sort of like another form of policeman looking over your shoulder.I understand the point you're making about regulation, but it is simply wrong in principle that private legal proceedings should have the same effect as a policeman looking over the company's shoulder.

"Policemen" (ie, in this context, regulators) have proper policy, fairness and consistency constraints on what they do. In contrast, private citizens bringing private legal proceedings have no constraints on the capriciousness or arbitrariness of their decisions. The proceedings which they bring are totally unsuitable for any regulatory effect. That's why compensation recoverable in private legal proceedings should only be compensation and no more.

[innuendo]

"I understand the point you're making about regulation, but it is simply wrong in principle that private legal proceedings should have the same effect as a policeman looking over the company's shoulder."

Well I suppose we will have to disagree on on what we see as Principle. A private individual taking action against another, be it citizen, corporation or government, still has to have grounds, and a case that will stand up in court before they can succeed. If your suit is truly frivoulous it will go nowhere and will cost you a lot of money.


In contrast, private citizens bringing private legal proceedings have no constraints on the capriciousness or arbitrariness of their decisions.

As I said above, capricious or arbitrary, the law of the land, through a court, still has to be convinced of its merit.

"The proceedings which they bring are totally unsuitable for any regulatory effect."

I'm not so sure that the intent is to regulate, but if the individual feels that harm has been caused by negligence or failure to observe regulations, then I see nothing wrong with their being able to sue.

If the possibility of a successful lawsuit can convince the otherwise unscrupulous, to stick to the straight and narrow I feel it is not all bad.

[Globaliser]

innuendo: A private individual taking action against another, be it citizen, corporation or government, still has to have grounds, and a case that will stand up in court before they can succeed. If your suit is truly frivoulous it will go nowhere and will cost you a lot of money. ... As I said above, capricious or arbitrary, the law of the land, through a court, still has to be convinced of its merit.I think that this doesn't deal with the point. Let me take an example.

Suppose that Airline A in fact has two safety problems.

One is that it isn't maintaining its overhead bin latches properly, so that too many of them are failing and dumping baggage onto passengers, causing them injuries - but (as we know is usually the case) only minor injuries. The press get wind of this and start a story running about "lethal flying baggage" and the airline's wanton neglect of bin latch maintenance. Injured passengers sue and (because of the legal system in which they sue) get paid damages well over and above what is necessary to compensate them for their injuries because (on your theory) making the airline pay "big bucks" might motivate it to do the job properly to start off with. On your view, this is the "policeman over your shoulder" effect of allowing punitive damages which have no bearing on the level of damages needed for compensation.

The airline's second problem is that its tyre maintenance system has fallen apart, and it's lost track of which tyres were last retreaded, and when. The consequence is that there might be tyres being used on aircraft which are beyond their last legal retreads and might get sent for further retreads beyond their certificated lives. As we know, the margin of safety built into certificated lives and airframe design means that there is very little risk of anything actually going wrong as a result of this. But there is a tiny chance that there might be a tyre burst at a critical phase of flight that starts a chain of consequences that leads to a serious accident with fatalities.

Like all airlines, this airline may have to make a decision about prioritisation of these two problems. (All companies and organisations have to make decisions about the allocation of resources, so there are prioritisation decisions being made all the time by all airlines.) What effect do our two competing models have on the airline's decision making?

In the model that emphasises the regulatory effect of private lawsuits through the payment of damages over and beyond compensatory levels, the airline will tend to concentrate on fixing the problem that's visible, high-profile and the cause of the payment of the "big bucks" that you advocate. In itself, fixing that problem is no bad thing, but it may lead to this squeaky wheel being given the grease in priority to the other problem. The priority that's given to this problem in this model would be driven by a capricious, arbitrary and non-expert focus led by the press and taken forward by the injured passengers through the courts - regulation by private decision-making.

On the other hand, a proper regulatory approach which derives its input from general expert policy considerations, including a consistency of approach to all safety matters generally, is more likely to require the airline to prioritise and fix the maintenance issue that may have a catastrophic effect on safety of flight, even though the press and public will be blissfully unaware of the fact that there's even an issue, let alone have any grounds for taking any legal proceedings.

Just this one imperfect example dreamt up on a Sunday morning will, I hope, demonstrate why resorting to the regulatory effect of punitive damages awarded in private legal proceedings is most definitely a bad thing. Let damages do what they're supposed to do - compensate for actual injury and no more - and let the regulators do the policing. Don't mix them up, or you may get unintended effects.

[locust]

They did a perfect landing, they deserve a position with Emirates...!!

[Bealzebub]

I agree with innuendo Frivolous court actions are not the problem some seem to think. However companies that are serial injurers are more of a problem.

If mythical Airline A, is chosing to "prioritize" on which safety related item it will neglect in favour of another, it is being willfully negligent and rightly runs the risk of litigation from those it has effectivley chosen to injure by its neglect.

Debating the "regulatory approach", or "prioritisation of resources", or "levels of compensatory damages" is a very moot consideration when you yourself are a victim of this corporate negligence. Lawsuits in many western jurisductions are expensive, time consuming and often frustrating affairs. The process may extend to many many years to achieve any sort of resolution. Even then that resolution is likely to be an unsatisfactory compromise for the litigant parties. This concept of "punitive damage awards" is not to be found in many jurisdicitions outside of the United states. In the UK for example it is almost unheard of. A claimant will have done well to successfully achieve their actual damages and if they are lucky most of their legal costs !

When you say let the damages compensate for actual injury and no more. What does that mean to a young woman whose face has been scarred and ruined ? What does that mean to a person whose muscle damage never again gives them the same quality of life ? What does it mean to somebody who is mentally scarred and frightened to partake in something that was once routine and enjoyable ? What price do you put on it ? If you ask the victims of this corporate neglect, they will often say that there is no price. Nothing can put back what they have lost. The only thing these companies, and more properly the lawyers representing their insurance companies, will ever have to offer is money ! The ability to say "heres a few pounds or dollars, now go away and let us get back to business as usual", is not acceptable. ! These companies should be pursued by the regulator on the one hand, with the very real threat of fiscal punishment by way of compensation to those they have damaged on the other. Their insurance companies ( without whom they cannot function), would then give them a wake up call. The serial injurers might suffer a dent in their balance sheets for a year or two. A much shorter time than many of their injured customers would suffer !

I am always amazed that there are so many people who seem to think that action and redress against corporate offenders is such a personal threat to their own wellbeing. A view no doubt encouraged and propogated by those same offenders !

By way of analogy. I almost never bother to take out insurance protection against goods I buy, simply because it is often cheaper to accept the risk, against the cost of buying new again. Unfortunetaly many companies look at the compensatory payouts of courts in some jurisdications, and adopt exactly the same line. In other words the customers life and quality of same, is an acceptable risk, against the possible fines and insurance premium hike of killing or injuring that person. After all your newly aquired epilepsy and facial scar from the falling laptop computer is a small price to pay for Airline A's insurers, than their client actually having to fix those bin latches they already knew about ?

[Globaliser]

Bealzebub: If mythical Airline A, is chosing to "prioritize" on which safety related item it will neglect in favour of another, it is being willfully negligent and rightly runs the risk of litigation from those it has effectivley chosen to injure by its neglect.Two issues here. Prioritisation is something that all airlines have to do, even in the field of safety - and regulators rightly recognise this. If you prioritise appropriately, but you're unlucky enough to have the lower priority issue bite you before you can get around to fixing it, you will not be at fault.

Neglecting an issue entirely is a different matter - nobody could possibly defend that.

But there is an interrelationship. One of the big problems with allowing private legal proceedings to result in punitive awards intended to deter neglect is that they may affect the decisions about prioritisation, as I've tried to explain. And one of the problems in the air safety fields is that the areas which would be prioritised according to the whims of the litigating public are often not the areas that should be prioritised. The punitive "damages" may themselves actually damage the cause of safety.When you say let the damages compensate for actual injury and no more. What does that mean to a young woman whose face has been scarred and ruined ? What does that mean to a person whose muscle damage never again gives them the same quality of life ? What does it mean to somebody who is mentally scarred and frightened to partake in something that was once routine and enjoyable ? What price do you put on it ? If you ask the victims of this corporate neglect, they will often say that there is no price. Nothing can put back what they have lost. The only thing these companies, and more properly the lawyers representing their insurance companies, will ever have to offer is money ! The ability to say "heres a few pounds or dollars, now go away and let us get back to business as usual", is not acceptable. ! These companies should be pursued by the regulator on the one hand, with the very real threat of fiscal punishment by way of compensation to those they have damaged on the other. Their insurance companies ( without whom they cannot function), would then give them a wake up call. The serial injurers might suffer a dent in their balance sheets for a year or two. A much shorter time than many of their injured customers would suffer ! None of this is any argument for making the amount of the compensation any greater than what would be proper compensation for the injury in the form of money, which is all that the court can do. None of this is any argument for using the vehicle of "compensation" as a device to punish and regulate.

If you think that the amount of compensation now paid out is too little, then the answer would be to press for higher levels of compensation. This was argued and decided relatively recently by a special 5-man Court of Appeal (England) in Heil v Rankin (http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2000/84.html), which contains some useful discussion of the other side of the argument - which amongst other things boils down to the fact that higher levels of compensation are not paid for by the companies concerned or even by their insurers - they are ultimately paid for by you and me as consumers.

And I think you misunderstand the nature of the relationship between companies and their insurers. Insurers don't get involved from time to time in a way which might prod them into giving the companies a wake up call. There are no special "serial injurers" in big business. All big companies put in a steady stream of injury claims to their insurers, both internal and external. Claims handling is already a process, not an event. Big awards of punitive "damages" would not change that relationship, just the numbers involved.

[Bealzebub]

Then I am a little surprised that you seem to advocate the position adopted by the insurance companies and their clients. Premiums are normally set to reflect the risk. That risk is normally based on the applicants claims history. Indeed the insurance market will often offer reduced premiums to companies who can settle claims at reduced figures even if in the extreme it means the company liquidates itself ( or threatens to, to avoid exposure ) and then continues in business with another name. Obviously this is something big business is unlikely to do. However larger companies will often use a subsidiary or another name in matters of litigation to avoid unwelcome publicity. The insurance companies are only concerned that the claim is avoided or minimized. That is their mandate, to remain as competitive as possible. Punitive or appropriate levels of compensatory damages most definetaly do not assist in achieving this mandate. Therefore nobody in the business of advocating these industries, would be expected to argue anything other than the position you proffer. However if you or one of your close relatives were ever to be injured by this sort of neglect, I suspect you would adopt a very different private stance ? If not at first, you might eight to ten years down the road when the matter was eventually resolved.

To suggest there are not serial injurers is a little naive. Some of the claims history of large auto manufacturers, drug companies, and aerospace conglomorates would strongly suggest otherwise ! To state that higher levels of compensatory damages or punitive damages would only be passed on to the consumer is fairly irrelevant. It is the negligent companies that would be hit first, and it is they who would have to pass on this cost to their customers. If this puts them at a commercial disadvantage to their more cautious and responsible competitors then good ! In any event if we are only talking, as you suggest, about an increased level of numbers so what ? Better compensation for the injured party is no less than they deserve. After all the £400 hr lawyers and £600 hr Barristers and the Billions of pounds of premium income generated by these industries all have to be paid for as well, and I don't hear much vociferous complaint from the industry on those costs. Claims handling is indeed a "process" and not an event, at least it is for the companies. The same does not hold true for the person they injured of course !

The US system of punitive damages tends to focus the minds of companies because the stakes are higher. In this jurisdiction (UK) the companies and / or their insurers might as well gamble, because the only the thing they have to lose is their costs ! Those costs are well funded and certainly affordable to big business. The same usually does not hold true for the injured party. Even in these days of "no win no fee" ( a sorry apology for the loss of legal aid), the recovery sums for the acting solicitor often make such business undesirable. In the US of course the percentage take for the acting lawyer, makes the assumed risk an altogether different story.

[Globaliser]

Bealzebub: To suggest there are not serial injurers is a little naive.All big companies are serial injurers, and they all feel the pressure from their insurers. The suggestion that a system of punitive damages will wake up companies that would otherwise just gamble and risk it ignores the reality of the relationship between all big companies and their EL/PL insurers and ignores the financial incentive that companies already have to be safe, as you point out.

The idea that punitive damages are somehow necessary to do this job is in fact the fallacy dreamt up by greedy claimants' lawyers who will stand to take a percentages of the over-inflated damages recovered by their clients. Fortunately, they are not found here in the UK.Indeed the insurance market will often offer reduced premiums to companies who can settle claims at reduced figures even if in the extreme it means the company liquidates itself ( or threatens to, to avoid exposure ) and then continues in business with another name. Obviously this is something big business is unlikely to do. However larger companies will often use a subsidiary or another name in matters of litigation to avoid unwelcome publicity. The insurance companies are only concerned that the claim is avoided or minimized.Have you got any idea what you are talking about? This is not legally possible in the UK - the insurer will get hit for the full whack of damages regardless of any manoeuvreing by the insured company.Better compensation for the injured party is no less than they deserve.But if it's to be so, let it please remain compensation, calculated as such. Not as windfall "lottery wins" via litigation, with all the disadvantages that they come with.After all the £400 hr lawyers and £600 hr Barristers and the Billions of pounds of premium income generated by these industries all have to be paid for as well, and I don't hear much vociferous complaint from the industry on those costs.You obviously don't have any experience of the personal injury legal market in the UK, then, do you? £400/£600 per hour lawyers? No pressure on costs? Please don't make me laugh.The US system of punitive damages tends to focus the minds of companies because the stakes are higher. In this jurisdiction (UK) the companies and / or their insurers might as well gamble, because the only the thing they have to lose is their costs !But the personal injury sector in the UK has seen big employers liability claims cut to a tiny fraction of what they were just a couple of decades ago?

Why? It's not been because of punitive damages, obviously, because we don't normally award any.

Funnily enough, this has been achieved by a regulator through the effect of regulatory powers and criminal prosecutions.

[Bealzebub]

quote

"There are no special "serial injurers" in big business."

quote

"All big companies are serial injurers, and they all feel the pressure from their insurers."

Contradictory ?

quote

"Have you got any idea what you are talking about? This is not legally possible in the UK - the insurer will get hit for the full whack of damages regardless of any manoeuvreing by the insured company."

Indeed I do! Possible or Legally possible ? Two different questions. The first is absolutely so, the second only if you can get away with it. I have seen evidence that a syndicate on one of the largest insurance markets in the world has done just this ! Even better one of the names in that syndicate is no less than a chairman of one division ! However you are right, it is not legal, it just happens. The matter is currently before the RCJ and it is therefore (tempting but) not appropriate to discuss it publicly. But to answer your question. Yes I do have " any" idea what I am talking about. As for the legal costs, you really should see the costs they have tried to submit for their defence, presumably it "would make (you) laugh".

quote

"The idea that punitive damages are somehow necessary to do this job is in fact the fallacy dreamt up by greedy claimants' lawyers who will stand to take a percentages of the over-inflated damages recovered by their clients. Fortunately, they are not found here in the UK."

Unlike the "greedy" retained lawyers who presently defend their insurance and big business clients in the UK at present then ? It is not that they are not found "here in the UK", it is that the legal framework has richer pickings for them defending wealthy corporate customers.

Regulatory oversight and the fines imposed for deficiencies are one thing. Damage done to an invidual is another. It seems quite perverse to suggest that a punitive fine imposed by the former is fine (no pun), but a punitive claim by the latter is abhorent ? I wonder if I were to maim a person, negligently driving at high speed. You would advocate the fiscal punishment should be imposed from the "regulator" but the victim should get a few shillings from my insurance company and then go away ?

It is easy to be detached and dispassionate from the subject of proper damages when you only advocate one side of the arguement, and I accept, that cuts both ways, but there are enough well paid advocates for insurance and big business. Punitive damages go some way to redress the balance. They exist in the USA and big business survives as does the insurance industry, indeed they positvely thrive. In this and other jurisdictions it is high time we as people stopped accepting that we have a paltry worth, and demanded proper and indeed punitive damages for those whose negligence causes us real harm.

[Globaliser]

Bealzebub: Contradictory ?No, unless you choose to misread what I wrote.

There are no special "serial injures" in big business who, according to the "punitive damages as regulation" theory, would get picked out and suddenly brought down to earth when they were identified as such. All big companies are "serial injurers", and all feel the pressure from their insurers. The effect contended for by the "punitive damages as regulation" theory simply does not exist.

Unlike the "greedy" retained lawyers who presently defend their insurance and big business clients in the UK at present then ? It is not that they are not found "here in the UK", it is that the legal framework has richer pickings for them defending wealthy corporate customers.Those charging £400 or £600 an hour are most unlikely to be found defending personal injury claims on behalf of unions, or bringing them on behalf of claimants. That's the nature of the personal injury legal services market in the UK and has been for many years.It seems quite perverse to suggest that a punitive fine imposed by the former is fine (no pun), but a punitive claim by the latter is abhorent ?No it isn't.

If you are to be punished in the criminal courts, it is elementary that you have many rights. Amongst others: You have the right to silence, you have the right to see all the relevant evidence whether or not the prosecution chooses to use it in court, and you have the right to make the prosecution prove beyond reasonable doubt that you have done the wrong that you're accused of.

If you are to be punished via the mechanism of damages in civil proceedings, you have virtually none of those rights.

So as a matter of principle, it's wrong that people should be punished via "punitive damages". And so that is in general the law of England, and rightly so.

[Bealzebub]

I think it is obvious that we are coming from two opposing sides of this debate, and there is little common ground. Having already taken up a full page indulging this topic as an aside to the main thread, I cannot add much more than I already have without repeating myself.

Serial injurers and their insurers have a well honed mechanism for advocating their position and you do it well. Their victims are often less well served (often but not always). As a matter of principle it is Right that negligent companies should be punished by way of punitive damages. It is an established procedure in the USA and I suspect it will be adopted in one form or another here eventually. The unscrupulous companies will no doubt adapt and their apologists will still be employed to defend them. ;)

[Globaliser]

Bealzebub: As a matter of principle it is Right that negligent companies should be punished by way of punitive damages. It is an established procedure in the USA and I suspect it will be adopted in one form or another here eventually.Think what you like. Punitive damages have twice recently got within a hair's breadth of being completely abolished from English law, even in the rare situations in which it's still allowed. Once from the Law Commission, once from the House of Lords.

But no doubt you will still think you know better.