Civil Aviation (Carriers' Liability) Regulations (Amendment) 1996 No. 240
EXPLANATORY STATEMENT
STATUTORY RULES 1996 No. 240
Issued by the authority of the Minister for Transport and Regional Development
Civil Aviation (Carriers' Liability) Act 1959
Civil Aviation (Carriers' Liability) Regulations (Amendment)
Part IVA of the Civil Aviation (Carriers' Liability) Act 1959 (the Act) imposes a requirement that carriers of passengers under the Act are to be insured against liability to passengers for death or personal injury. A carrier must insure each passenger carried for a minimum of $500,000 or its international equivalent.
Section 41D of the Act provides that the insurance coverage may not be affected by any warranty or exclusion in the contract of insurance, except as prescribed by regulations.
Subregulation 9(1) of the Civil Aviation (Carriers' Liability) Regulations (the Carriers' Liability Regulations) allows contracts of insurance to exclude liability by adopting certain standard exclusion clauses used by the Australian and international aviation insurance industries. The standard exclusion clauses are listed in subregulation 9(2) of the Carriers' Liability Regulations, and the texts of those exclusion clauses appear at Note 2 to the Carriers' Liability Regulations.
The proposed Civil Aviation (Carriers' Liability) Regulations (Amendment) (the proposed Regulations) will add a new standard exclusion clause to those permitted by regulation 9 of the Carriers' Liability Regulations. The new exclusion clause, "Nuclear Risks Exclusion Clause (AVN.38B)" is an update of the existing "Aviation Radioactive Contamination Exclusion Clause (General) (Aviation 38)". Nevertheless, Aviation 38 must be retained as a standard exclusion clause until such time as it is no longer used in insurance contracts.
AVN. 38B, like Aviation 38, excludes insurance coverage of damage to property or legal liability occasioned by ionising radiation or radioactive contamination. AVN 38B is intended to better dovetail with international practice relating to carriage of dangerous goods and to exclude risks more properly covered by nuclear pool insurance.
Details of the Regulations appear in the Attachment.
The Regulations will commence on notification in the Gazette.
Attachment
Clause 1 - Amendment
Clause 1 provides that the Civil Aviation (Carriers' Liability) Regulations are amended as set out in these regulations.
Clause 2 - Regulation 9 (Prescribed exclusions of insurer's liability)
Subclause 2.1 amends paragraph 9(2)(a) of the Civil Aviation (Carriers' Liability) Regulations by removing a comma from after the words "(also called 'Aviation 38')". This brings the paragraph into conformity with paragraphs 9(2)(b) and 9(2)(c).
Subclause 2.2 inserts a new paragraph 9(2)(aa). This new paragraph adds a fourth standard exclusion clause, "Nuclear Risks Exclusion Clause", to those currently permitted in the insurance contracts required by Part IVA of the Civil Aviation (Carriers' Liability) Act 1959.
The subclause also replaces the Note to subregulation 9(2) with a new Note, which contains the texts of each permissible exclusion clause, including the added "Nuclear Risks Exclusion Clause".
Overview
The Civil Aviation (Carriers' Liability) Regulations (Amendment) 1996, issued under the authority of the Minister for Transport and Regional Development, seeks to address a gap in the existing regulatory framework concerning insurance coverage for carriers in the event of nuclear risks. This amendment arises from the need to update the existing "Aviation Radioactive Contamination Exclusion Clause (General) (Aviation 38)" to better align with international practices and to ensure that nuclear risks are more appropriately covered by specialised nuclear pool insurance. The Civil Aviation (Carriers' Liability) Act 1959 mandates that carriers insure passengers against liability for death or personal injury, with a minimum coverage of $500,000 or its international equivalent, and the policy objective is to provide a clear and updated regulatory framework that reflects current international standards and practices in the aviation industry. The new "Nuclear Risks Exclusion Clause (AVN.38B)" will be added to the list of permissible exclusion clauses, while the existing clause, Aviation 38, will remain in effect until it is no longer used in insurance contracts.
Scope and Application
The Civil Aviation (Carriers' Liability) Regulations (Amendment) 1996 No. 240 pertains to the Civil Aviation (Carriers' Liability) Act 1959, which governs the insurance requirements for carriers of passengers. This Act applies to any carrier of passengers, including airlines, who must insure each passenger for a minimum of $500,000 or its international equivalent for death or personal injury. The Regulations, which are set to commence upon notification in the Gazette, further specify that insurance coverage cannot be affected by any warranty or exclusion in the contract of insurance except as prescribed by regulations. The proposed amendments introduce a new exclusion clause, "Nuclear Risks Exclusion Clause (AVN.38B)", which is intended to align with international practices and exclude risks better covered by nuclear pool insurance. The amendment also retains the existing "Aviation Radioactive Contamination Exclusion Clause (General) (Aviation 38)" until it is no longer used in insurance contracts. This amendment does not alter the scope or application of the Act but updates the permissible exclusion clauses under the Regulations to provide clarity and consistency in the application of insurance coverage for carriers of passengers.
Key Provisions
The main operative sections of the Civil Aviation (Carriers' Liability) Regulations (Amendment) 1996 (No. 240) introduce a new exclusion clause into the existing insurance requirements for carriers under Part IVA of the Civil Aviation (Carriers' Liability) Act 1959. Specifically, section 2.2 of the Regulations inserts a new paragraph 9(2)(aa) to include the "Nuclear Risks Exclusion Clause" (AVN.38B) as a permissible exclusion in insurance contracts for carriers. This amendment aims to align with international practices concerning the carriage of dangerous goods and more effectively exclude risks associated with nuclear incidents from the insurance coverage required by the Act. The amendment also updates the formatting of the existing exclusion clause, Aviation 38, by removing a comma to ensure consistency across the listed exclusions.
Under the amended regulations, carriers are obligated to ensure that their insurance policies include the newly prescribed "Nuclear Risks Exclusion Clause" (AVN.38B), which excludes coverage for damage to property or legal liability resulting from ionising radiation or radioactive contamination. This requirement is designed to better align with international standards and practices, ensuring that such risks are adequately managed through other insurance mechanisms, such as nuclear pool insurance. Carriers must ensure that their insurance contracts are updated to reflect these changes, maintaining compliance with the Act's provisions regarding the exclusion clauses permitted in the insurance coverage.
Failure to comply with the amended regulations may result in carriers being non-compliant with the statutory insurance requirements set out in Part IVA of the Civil Aviation (Carriers' Liability) Act 1959. This non-compliance could potentially expose carriers to liability for incidents that the new exclusion clause is intended to cover, leading to financial and legal repercussions. While the proposed regulations do not explicitly state penalties for non-compliance, carriers found to be in breach of the Act's insurance requirements could face enforcement actions, fines, or other legal consequences as determined by the relevant authorities. Ensuring adherence to these updated exclusion clauses is therefore critical for maintaining compliance and protecting against potential liabilities.